I have been puzzling since I started looking into trading as to why The Art of War, and other such works keep being mentioned. I first read The Art of War and The Book of Five Rings, when I was heavily into martial arts, many years ago now. I even read the Tao te Ching! Now, whilst I could see some link to Karate, I have never been able to see how someone would apply the teachings to business, let alone trading. I await your enlightenment. Mutts
I think that the most famous of the Sun Tsu quotes about knowing the enemy and yourself is very relevant to trading - most people would think that knowing the enemy (the market) is the key and the only focus/goal they set. They learn technical analysis, they study macroeconomical conditions, they apply regressions, they backtest, they backtest, they backtest etc. The proverb's main pt: know yourself and know the enemy and then you will succeed, is the simple logic. We all can see that when it is told to us - particularly the part about knowing the enemy. Invariably the enemy will pull a surprise on you - and it is how you react to it which is key. The markets will do this - that much you better count on. Therefore, work on your ability to withstand losses and not lose your focus. Otherwise, you end up in the summation of Tzu's wisdom: know neither yourself nor your enemy - YOU WILL BE LOST. Trade Well...
I think lots of people read it them for these two reasons. In trading you need two things (besides money in a account). One is a strategy for how you will trade the market. This is what you will hear called the "search for the holy grail". But, just because you have a method or system is no guarantee for success. Because without discipline to follow through with your method you will also fail. This is why lots of traders study psychology. I have also read both books years ago and found that it gave you these in a military sense. Sun Tsu showed how your method to get the job done is so important. There is a story that he was showing his skill to a important leader who had 100's of concubines. He said if you are so good make my women line up and march for me. He said ok and demanded the women to line up. They all just giggled at him. So he went up to one of them and cut her head off immediately and repeated "line up". Needless to say they all did. Musashi taught that you must be willing to use everything at your disposal to get the job done. He was famous for using 2 swords like the Europeans did and also just wooden swords to win battles. He had discipline and some big, big, big balls. I hope this helps.
So its not really the whole book, but rather certain core principles? The Miyamoto Musashi book (5 rings) talks about the five stances - void, fire, wind etc, so am I right in thinking that these "stances" would be irrelevant? Apologies for using this book, when the thread title is Sun Tzu, but I'm at work, and can't remember much of the art of war, whereas I can remenber the structure of the other.
I think it's the core idea's. I mean you could use swords, horses etc as an analogy. But, I think there's way to much to remeber. So just understanding the core and aplying it is the key. Remember that the road to being a succesful trader is one long road. You need to read and study lots of books and watch the screen lots.
Sun Tsu is essentially a strategic planning guide. Chapter 1 Laying plans - every successful trader I know works to a plan Chapter 2 Waging War - First line "He who wishes to fight much first count the cost" In other words, are you prepared for the commitment to trading? Do you have sufficient capital? "If the campaign is protracted, the resources of the state will not be equal to the strain" In other words can you cope with a long and protracted drawdown - Financially and psychologically. Chapter 3 Attack by stratagem "Supreme excellence consists in breaking the enemy resistance without fighting". In other words, trade where the market shows least resistance. "He will win who knows when to fight and when not to fight" In other words, trading all the time is a sure path to failure. Don't overtrade. If the market is dull, walk away. Chapter 4 Tactical dispositions "The consummate leader adheres to method and discipline" In other words, stick to your method. Go with what works. Chapter 10 Terrain "Know the lay of the land" In other words, understand the type of market you're in and develop trading tactics and strategies accordingly. Anyway, you get the idea. The book is filled with wisdom related to trading. Runningbear
buddy of mine is a black belt karate....great trader....very disciplined.....oriental approach...quiet...observe...act.
i have "the art of war." i think the concepts are cool, but it's not a book i sit down and read from page 1. i keep it next to my computer and when i'm bored i'll just pick a page and read it.
Totally non-sarcastic question: Did you read "Sun Tzu's Art of War" or "Sun Tzu's Art of War for Traders and Investors" by Lundell..If you haven't read the latter..it might make more sense as to how it's tied to trading. Regards, Chris