Wednesday, 17 December 2014

Trading and Zen


Don't worry. I am not a bleeding heart so no proselytising from me!


For newer readers, I am agnostic.

However, I do use Zen as my spiritual and philosophical anchor. It's the closest metaphysics I can find that's has the least conflict with Science.

I'm into verification that sort of thing...


This post is not about sharing how to apply Zen into your trading. For that, you can easily search under Google and many others (bloggers/traders) who have already done so.

I shall instead share how trading has helped me in my understanding of Zen, and in turn, myself.


Do we want too see the truth?

For some of us trading for some years, we can see this phenomenon quite often: 

Entering a good trade yet lost money; and winning money with a bad trade.

Yet there are traders who will never admit to it or are puzzled how can it be?

Seeing and admitting the truth takes courage.   

With trading, the feedback is a lot quicker since we practice mark-to-market every closing. 

In real life, we do have an "inkling" how the world works, where we fit into this pecking order, and how we are all different from one another. Yet we tell little lies and make up fantasies not only to ourselves, we tell them to our children and share it with other people!?

We do this as it feels comfortable when more people believe the same shit we do. 

That's why we have people eager to share with others how easy it is to make money without realising they were already a "victim" of a financial scam.... Or to recruit you into MLM, or cell group, or political party. 

By applying the trading process of constant reviews, re-evaluations, and reflections - it helps me see the world as it is; not what I wished it to be.  


How do we know we know?

In school, we do it through tests and exams. 

That was easy!


How do we know we can do it?

Professionals do it via articleships or housemanships and acceptance by professional bodies. You don't call yourself a practicing lawyer or registered accountant just by having a relevant degree do we?

There are quite a few engineers in our financial blogosphere. Many have engineering degrees, but how many are certified professional engineers? 


Outward manifestation of Zen

Mindfulness, living in the here and now, no mind - all wonderful concepts to show off and pretend I know.

But when I started trading... Shit! 

Knowing and doing are not the same!!!

That's where I go, "Jared, you are such a fraud!"

I don't make money with knowledge (unless I teach); I make money with execution.

In trading, it's all about execution - entries and exits. 


If I can't tell whether I've made a good trade or bad trade (what has profit or loss got to do with it?) what's the point with Zen again?




22 comments:

  1. "Seeing and admitting the truth takes courage."

    For others, not having certainty kills. :D

    ReplyDelete
    Replies
    1. pf,

      We know the certainty of death; yet we often exclude this knowledge in our goal settings and plans...

      Has anyone saw a financial freedom excel file extrapolation that include bear markets? Bear markets don't exist?


      We spend thousands on health and hospital insurance plans due to fear of escalating medical costs, yet we avoid going for annual medical check-ups despite knowing early detection is less costly and dramatically improves our chances of survival...

      In trading, some prefer to spend thousands on expensive courses, charting software, and multi-screen hardware, yet try asking them to invest in a tiny stop-loss risk management technique...

      Truth is indeed in the eye of the beholder ;)

      Delete
  2. Hi SMOL,

    I read words unspoken here, not sure if that's your intent.

    But very blurry... Letting readers connect the dots again? But I might connect wrongly.

    UNcode: living it now fully aware of everyday choice and consquences and not the world lens of choice and consquences??

    Wrong? No right or wrong?

    ReplyDelete
  3. Oh just saw the previous comments in your previous post. I think too much. lOl

    ReplyDelete
    Replies
    1. Sillyinvestor,

      Hee Hee.

      I think you know this Zen story from the Sixth Patriarch Huineng:

      2 monks were debating about the flapping of the flag in the wind.

      One monk says it's the flag that is moving; the other argued it's the wind that's moving.

      Huineng overhearing this debate interjected that it's the Mind of the 2 monks that were moving.

      :)

      Delete
  4. Hi SMOL,

    I like this "Seeing and admitting the truth takes courage."

    No wonder we from same school! I prefer history than Geography!

    ReplyDelete
    Replies
    1. Rolf Sury,

      I like History but I got F9 for my O' levels :(

      History is not about memorizing 10 year series and scoring A1.

      This truth got branded in my heart - when the white men first came, they had book; the natives have the land.

      Soon, the natives had the book; the white men now have the land.

      ;)

      Delete
  5. Thanks SMOL! I dropped a comment about a week back asking you to elaborate on Zen and trading and here it is!

    Trading is like a mirror as you find out aspects about yourself you probably didn’t know before you started trading. You find out your weaknesses and your thresholds/comfort levels. And more importantly, your ability to “smoke” yourself when you are in a losing trade!.

    Is it better to make a good trade and lose money, or is it better to make a bad trade but win money? That’s something I pondered over recently as well.

    ReplyDelete
    Replies
    1. RetailTrader,

      Trading can also help us find our "best fit" when it comes to our day job.

      If we need to see immediate "feedback" as in intra-day trading, then operations and sales may be a better fit for us.

      Swing and position traders may prefer tactical level jobs that involve some planning with execution like in event planning, sales promotion, advertising, etc.

      Long term investors are those who aspire to strategic level jobs like in CEOs, CFOs, CIOs, COOs, etc. (Plan a lot; do nothing)

      Either that, or they are actually traders who have let their trading positions become "long term" investments....

      LOL!

      Delete
    2. Me as Chief Investment Officer. No direct report. No clients. No boss.

      Just me and Mr. Market for long term profit and loss accounting model.

      Delete
    3. CW,

      Hee hee.

      So are you secretly longing to be single all over again?

      Male married financial bloggers are so cute. On the side will say I love my family or everything I do is for them.

      But when they do their Roar of the Heart, is just me and the Market ;)

      LOL!

      Delete
    4. Good question!

      The answer may be found in SMOL's famous quote:

      To achieve or To escape?


      How?

      The answer may lie in how we answer this question for staying single, married or married with kids.

      How often when we look at our own parents and then back looking at ourselves hard in the mirror every morning?

      Hmm..

      To achieve or To escape.


      Cheem?

      Probably, the answer is about there.


      Delete
    5. CW,

      Touche!

      It's such a joy bantering with you!

      I threw a brick at you; you threw a jade piece back :)


      Fisherman,

      I wish you and family an early Merry Christmas and Super New Year!

      And most of all, to your good health!

      Delete
  6. temperament,

    You plod on and on?

    Eh... That story about the bird with no legs only works on girls lah!

    The bird must always flap its wings non-stop in continuous flight... The day the bird stops flying, that's the day the bird will fall from the sky...

    You energizer battery you! You must have a happy wife; you go on and on, and on, and on... Naughty qian bei!

    LOL!

    ReplyDelete
  7. temperament,

    I prefer the Energizer bunny. The rabbit reminds me of playmates... wink.

    Duracell fails in that "cell" reminds me of prison... Now that's not cool :(

    Hee, hee.


    May the grace of the Lord Jesus Christ, and the love of God, and the fellowship of the Holy Spirit be with you and family always!

    Merry Christmas man-of-the-cross!

    ReplyDelete
  8. Hi Guys,
    How about Sony in Hokkien?

    ReplyDelete
    Replies
    1. Rolf,

      Remember Nissan's Bluebird sedan?

      Eh? Remind me how did we end up in this Biology class here?

      Delete
  9. In Indonesia Jakarta the most reliable taxi is bluebird.. Haha dun bluebird me, it's true!

    By the way sidetrack a bit, I am interested to learn trading of commodities. Where can I get more information? In Singapore which platform? Do you mind to advise? Thanks!

    ReplyDelete
    Replies
    1. Hello Rolf,

      Most bigger Singapore brokerages have their futures arm. Here's one example:

      www.phillipfutures.com.sg/en/products/index.html


      I trade the CME futures and here's the link for you to explore the various commodities that catches your fancy:

      http://www.cmegroup.com/trading/energy/crude-oil/emini-crude-oil_contract_specifications.html

      (If you start with cotton futures I face palm...)


      Of course you can also trade commodities using CFDs with the many CFD providers here - however, these are OTC products and not traded over an exchange. There's counter-party risk just so you know; I'm not sure you are old enough to know about "bucket shops"...

      Must also compare the commissions and spreads between futures and CFDs - both have their pros and cons depending on your account size and your style of trading.


      I now prefer futures due to greater transparency:

      http://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm#COTRBox

      Of course that's provided you like doing your own analysis. There's always summaries from sell-side analysts from our friendly futures or CFD brokers ;)


      I would be remiss if I didn't add in this disclosure:

      In the 70s, there's a saying that if you want someone to go bad; introduce him to gambling. If you want someone to go broke; introduce him to futures!

      Delete
  10. Hi SMOL,

    I am touched for paving the way for my bankruptcy. Hahaha LOL just kidding.

    Frankly I am really touched and appreciate for providing the info. :) Hugs and kiss!

    Too much time spent on work work work in the past! Hence I am a "baby" with regards to trading, CFD, futures etc. I visited all the links your provided and will take time to go through it.

    In fact I alrdy signed up a seminar on the PhilipsFuture you provided.

    Thank you so much.

    Wish you, family and everyone a Merry Xmas!

    Rolf

    ReplyDelete
    Replies
    1. Rolf,

      You're welcomed!

      But I'll pass on the hugs and kisses. You very Russian!

      Delete

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