On Duty And Circumstance
"Never shirk the proper dispatch of your duty, no matter if you are freezing or hot, groggy or well-rested, vilified or praised, not even if dying or pressed by other demands. Even dying is one of the important assignments of life and, in this as in all else, make the most of your resources to do well the duty at hand."
— Marcus Aurelius, Meditations
When I read today's meditation, I was thinking about how this could compare to trading.
It is quite similar but not on the same scale as the responsibilities that a Roman Emperor like Marcus Aurelius may have!
But we do need to be "On Duty" or "In The Zone" as I would call it, ensuring that we make the right decisions and only trade what fully meets the rules/criteria for our strategies 100% of the time.
We also need to be swift in making the right decisions in "Circumstance." So if a trade is going against us for example, we need to cut it at our agreed exit point, so that we are controlling the trade and managing the loss. This means that our bank doesn't take a much bigger hit than planned, therefore ensuring long term profitability.
Voluntarily taking losses to protect my bank long term, was and probably still is the hardest part of trading for me.
It goes against the grain because our brains are wired to be winners and willingly taking losses, does not sit well with what we have been used to doing since childhood! Be the best you can be, do well in your exams, find the best job, strive for that promotion etc. etc. Then you discover trading and all of a sudden you are telling yourself to willingly take a loss, when things are going against you!
The sooner you can actually start to accept that there will be trades that are going to go against you and you can swiftly cut them at a manageable level, the easier it will become. However, being able to cut that losing trade short, without emotion and in a heartbeat, is extremely difficult and I had to force myself to actually exit trades after messing up on numerous occasions along the way!
By doing this, you are avoiding the "boom and bust" cycle of building up your bank and then taking a big loss which sets you back, leaving you with less than you started with or even worse, blowing your full bank! We need to be making the correct decisions "on duty and circumstance."