Why are War Strategies Relevant to Traders ?

In ancient China , Sun Tzu guided his military generals to wars using timeless concepts such as :

• “think before you act” and ..
• “act only when you are sure of a favorable outcome”

Do you think the above statement is very applicable to trading ?

Much of Sun Tzu’s teachings are focused on “the enemy.” If there is an enemy for investment and trading , then it is likely to be the enemy within - your own human emotions , that is - yourself.

Sun Tzu believed that anger and greed are the fundamental causes of defeat. He taught his followers that it was the unemotional , reserved , calm , detached warrior who wins , not the hot-head seeking vengeance and not the ambitious seeker of fortune. The Stock Market is like a battlefield. There is no room for “gut-feel” when it comes to investing. It requires rational and logical thinking in the midst of chaos , and decisions based on probabilities , not emotion.

Investors and traders should benefit from developing an appreciation of the ancient theory of The Art of War which focused on strategic overview before consideration of reactive tactics , and conscious acceptance of the inability to control one’s environment. Successful traders are not talented tacticians , but innovative and adaptive strategic thinkers who first define their goals and only then outline a path to achievement. Traders and investors cannot create market sentiments , move interest rates , or produce corporate profits - but they can learn simple and effective ways to discern opportunities with a high probability of favorable outcomes.

Read and think deeply about this post and see how closely you could align and correlate Sun Tzu Art of War and Trading …