Finding your trading zen might seem overwhelming, but it’s right there for you to embrace. Just use self-control and fortitude to overcome destructive emotions—this is the ancient Greek philosophy of Stoicism and every trader should swallow a significant dose of it.
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The philosophy was the brainchild of Zeno of Citium, around 300 B.C. and it was a response to cynicism. Basically, it took cynicism and refined it and smoothed it over and made it into something we can live with and use productively.
For a trader, there is perhaps nothing more important. After all …
“Luck is what happens when preparation meets opportunity.”
― Seneca the Younger (4 B.C. – A.D. 65), Roman Stoic philosopher, statesman, dramatist)
While cynicism paralyzes you, stoicism pumps you up and creates defenses around emotions that get out of control so you can think rationally and logically and attain an inner calm while trading.
It’s best to think of stoicism not as a belief system, or an ethical system, but as a brilliant way of life that is achieved through continual focus, practice, discussions with yourself, inner reflection and meditation. It keeps your mind in the present, but rationally focused for future enlightenment and gain—both tangible and intangible.
While the word “stoic” may seem off-putting to some because it suggests emotional indifference and even inability to feel pain, the philosophy of stoicism is not at all the same—it’s not indifference, it’s control.
And while it’s not an ethical system by definition, it is by default. When you live by stoicism, you are practicing wisdom, courage, justice and temperance and when you do this you are one with nature and truly a citizen of the world.
Someone who follows this as a way of life will think clearly and without bias. Bias is something that trips up traders all the time.
There’s a lot to learn from Seneca, who set out to teach us how to control anger. His theory? Anger is simply caused by overly optimistic ideas about the world that give us unrealistic expectations. When it all crashes down around us, we don’t have the mental capacity to deal with it. Instead, we resort to anger.
“Anger, if not restrained, is frequently more hurtful to us than the injury that provokes it,” the ancient philosopher wrote.
More Words of Wisdom from Seneca
If you thought a philosopher born in the 4th Century B.C. can’t offer you any trading wisdom—think again. Place Seneca on Wall Street today and he’d be a billionaire.
“If a man knows not to which port he sails, no wind is favorable.”
― Seneca
“We suffer more often in imagination than in reality”
― Seneca
“Associate with people who are likely to improve you.”
― Seneca
“Wealth is the slave of a wise man. The master of a fool ”
― Seneca, Moral Essays: Volume I
“Putting things off is the biggest waste of life: it snatches away each day as it comes, and denies us the present by promising the future. The greatest obstacle to living is expectancy, which hangs upon tomorrow, and loses today. You are arranging what lies in Fortune’s control, and abandoning what lies in yours. What are you looking at? To what goal are you straining? The whole future lies in uncertainty: live immediately.”
― Seneca
“Most powerful is he who has himself in his own power.”
― Seneca
It is this last saying that the trader should take to heart first and foremost and embrace it fully. Because if you can control yourself—which requires a great deal of reflection and meditation—you have the ultimate power.
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Stoicism in Business: A Must-Do Reading List
Increasingly, as emotions overtake us and we suffer losses as a result—and as businesses evolve, sometimes by returning to ancient roots, Stoicism is entering the workplace, and becoming a more important part of the entrepreneurial spirit.
High-stress environments have pushed us over the top, and the moment of acknowledgement is here: We absolutely must get things under control, and to do this we must start with ourselves.
There are now stoicism courses available for business people, and major companies are latching onto this as a boon both for their employees and the end-result (greater efficiency and productivity).
And literature has much to offer on your path to stoicism, but we recommend at least starting with the original thinker—Seneca …
#1 Letters from a Stoic (Penguin Classics), by Lucius Annaeus Seneca
and then moving on to the modern-day offerings:
#2 The Obstacle is the Way: The Ancient Art of Turning Adversity to Advantage, by Ryan Holiday
#3 Ego is the Enemy, by Ryan Holiday
#4 Antifragile: Things That Gain from Disorder (Incerto), by Nassim Nicholas Taleb
#5 A Guide to the Good Life: The Ancient Art of Stoic Joy, by William Irvine
All these books are fantastic—and life-changing. And while there are many books out there to help you with the specifics of trading, first you have to take care of your soul, as Socrates would say. If you are a beginning trader, it might be best to build yourself into a stoic first, and then fill in the details with some trading homework because if you start with a solid philosophical foundation you’ll already be far ahead in the game. It’s a strategy of mind over matter that REALLY matters.
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