Inspiration Forex (1) - Sun Tzu

The art of war Sun Tzu is a widely read classics and applied to various fields, because of the nature of the fundamental natural easily adapted in various areas of life. In this post, I extract some sections to be applied in trading and in doing so, hoping to introduce the concept of trading that are important to you.

 


I also classifies and categorizes them for easy understanding. To put it in context, I have the term outcome as follows:
-General = you/
trader-Trading
= Battle troops = capital/money You

in TERMS OF UNDERSTANDING the MARKET

"we are not fit to lead an army on the March unless we are familiar with the face of his country-the mountains and forests, traps and cliffs as well as swamps." (Sun Tzu).

Like what Warren Buffett puts it, "the risk of not knowing what you are doing. If you do not understand the market, you are not fit to invest in it. You will get your capital (soldiers) were swept out of stock "

" he who knows all this, and in fighting puts his knowledge into practice, will win the battle. " (Sun Tzu).

Not good enough if we only know the theories and concepts behind the investment. A trader should be able to apply that knowledge correctly to gain profit from the market.

In TERMS of PSYCHOLOGY TRADER

"a general, who was unable to control his annoyance, will launch his men to attack like ants swarming, resulted in one third of his men fall, while the city was still uncontrollably. Such is the ill effects of the siege. " (Sun Tzu)

Don't be emotionally affected by market or loss. If a trader is too eager to profit or revenge losses, traders can lose sanity and become irrational. Decisions that diabil likely to defect and ended up with a loss. Such is the ill effects of impulsive
trading
"there are five dangerous faults which may affect a General:
(1) faux pas, that leads to destruction,
(2) coward, which leads to being caught,
(3) hasty temperament, which can be triggered by humiliation,
(4) the enjoyment of honor which is sensitive to shame,
(5) over-attention on the troops, who took him on concerns and issues"

Psychology is the key to the trader. If he can't control his emotions and his character, he will lose money in the market. If he's sloppy, he will make a desperate trading without taking into account the opportunities to win. If he is a coward, he never could win big enough to cover the losses. If he has a temperament that is hasty, he will try to take revenge on the market that ended with losses. If she prides itself on when he wins, he will be calm when he lost and he'll never learn from mistakes. If he is over attention on the loss, he would always worry and can never make deals more with better.

In TERMS of MANAGEMENT of MONEY

"control/settings over a large army is the same principle as control over some people, it is just sebuahpertanyaan about the Division of their numbers." (Sun Tzu)

Trading big capital is the same is the case with small capital trading. You should not be affected by the absolute figures of losses and gains when trading. Follow the normal rules and system and divide the capital accord of the lot and the right position.

In TERMS of MOVING AWAY FROM MARKET

"he will win who knows when to fight and when not to fight." (Sun Tzu)

Opportunities are not always available in the market. There are times that your trading system would not work and it is important to be absent from the trading market. If you insist in the trading market in conditions like that, you'll end up in a series of losses and deplete your capital unnecessarily.

When you experience a series of losses, it is a sign of clear for you to stop trading. Contemplate whether it is a problem with myself, or a system that does not work under certain market conditions.

During live your reflection, stop all your trading activities until you find out the real problem. You will learn more about yourself, trading systems and market. This experience will help in assessing when to trade and when not to trade in the future. Do not fight not meaningless coward, it is the mantra of "survive to fight another day."

"If the battle is sure to produce a victory, then you must fight, even though rulers had forbidden it. If fighting will not result in victory, then you don't have to fight even when there is a supply of rulers. "

Important learning to trading when there is a favorable opportunity to do so. But more importantly learning not to trading when the situation is not favorable.