Long Posts

Stoicism Series 5-5: How To Be A Stoic Trader In 6 Steps

How To Be A Stoic Trader In 6 Steps

So in the previous posts, I shared some quotes from some of Stoicism’s major leaders – Marcus Aurelius, Epictetus, and Seneca.

If you don’t know what stoicism is, and if you want to know who these people were, check out part 1 of this 5 part series of articles: What Is Stoicism And How It Can Help You Become A Better Trader

Here’s part 2: 30 Quotes By Marcus Aurelius For Traders

Part 3: 30 Quotes By Epictetus For Traders

And Part 4: 30 Quotes By Seneca For Traders

That’s it! This is the last post of the 5 part series on stoicism and how to be a stoic trader…

Now, everything we’ve seen from this point is all just theory. What about the practice? After all, stoicism was never meant to be some mere intellectual entertainment.

Remember, the philosophy came about at a time of warfare, crisis, and instability. So it had to be practical, or else it wouldn’t be of much use.

As Epictetus once said,

Don’t just say you have read books. Show that through them you have learned to think better, to be a more discriminating and reflective person. Books are the training weights of the mind. They are very helpful, but it would be a bad mistake to suppose that one has made progress simply by having internalized their contents.

You get the point: Learning grandiose theories is, unfortunately, not enough. You must apply what you know — not once; not twice; you must make it a lifestyle!

But how does one put into application what one knows? How does one practice stoicism?

Stoics practice what is referred to as “spiritual exercises.” Let’s look at six of the most important ones…


1. Wake up with gratitude and set an intention

We know based on Marcus Aurelius’ series of personal writings that his daily morning routine was an important part of his day.

He would typically start his day by manufacturing some feelings of gratitude for being alive and to experience life as a human.

This is what he wrote to himself:

When you arise in the morning, think of what a precious privilege it is to be alive – to breathe, to think, to enjoy, to love.

And then, he would formulate an intention — the way in which he would want to approach the day.

It went like this,

Today I will deal with men who are meddling, ungrateful, arrogant, dishonest, envious, and uncharitable. These attributes have come to them because they are ignorant of what is good and evil.

But I understand that good is beautiful, and that evil is ugly, and that my transgressor is related to me; not by blood or seed, but of the same mind, and the same portion of the divine. I can neither be hurt by any of them, since no-one can implicate me in ugliness; nor can I be angry at my relative, nor hate him.

We are all born to work together, just like feet, hands and eyes, just like the rows of upper and lower teeth. To oppose each other is against Nature. To be irritated by another, to turn away; these are obstructions.

Remember, Marcus Aurelius was the emperor of the Roman Empire and he was someone who had to deal with all kinds of people. But no matter what happened during the day, he would make sure to live by his intention, which reminded him that things on the outside were ultimately out of his control and all that mattered was his response – is it objective, composed, for the greater good?

As traders, we can take a similar approach. The market is ultimately out of our control. That’s a fact. So we have to learn to let go of the wishing, the wanting, the hoping, and really learn to trust a proven process – one that makes sense mathematically.

What’s more, the market can’t hurt us. That is also a fact. Only we can – through our choice of thought, emotions, and behavior.

So there is certainly value in starting our day with an intention that we can strive to live by – and trade by.

That intention can be as simple as: ‘I will follow my plan today. My thoughts and my emotions can deceive me. My trading plan is always right.’

Or, ‘I can’t possibly know for sure what the market will do next.  So I won’t expect anything that is out of my control. I will only trust my proven plan.’

This act of setting up an intention for the day can be very powerful!


2. Rehearse potential bad scenarios

Spend a couple of minutes in the morning to contemplate the worst possible outcomes that can happen – a loss of discipline leading to a disastrous loss, the market reversing and stopping you out… whatever that is.

Now, I know what you’re saying – Isn’t that anxiety-provoking and more harmful than anything?

It can be but, done the right way, it can be a powerful act — one that can help you prepare yourself.

Let me explain…

Seneca said,

We should remind our spirits all the time that they love things that will leave – no, better, things that are already leaving. You possess whatever is given by Fortune without a guarantor.

By this, he meant that things will happen whether we want it or not – both good times and bad times are temporary.

While we naturally want good things to keep happening, clinging creates expectations for the future. But the future never really pans out the way we want. And when it doesn’t we become disappointed.

Seneca goes further by saying this,

It is in times of security that the spirit should be preparing itself for difficult times; while fortune is bestowing favors on it is then is the time for it to be strengthened against her rebuffs.

By this, he emphasized the importance of practicing misfortune, to prepare ourselves for when vicissitudes strike.

So, following this line of thinking, if you spend just a couple of minutes each day to walk through each agonizing step of your excruciating loss, you’d surely be more prepared when said loss inevitably occurs.

You could just close your eyes, imagine the scenario, and instead of picturing yourself defeated and despaired (because you don’t want to practice that), imagine what you would do? How would you handle it? Could you attempt to be “Stoic” about it?

You see what I mean? People say trading is all practice and it’s true. And the practice should also be taking place within – mentally, as such. That way, when losses eventually happen (and they will), you’ll be that much more prepared.

It’s really just a strategy to get you prepared for anything thereby minimising disappointments.


3. Cultivate perspective

One of the best ways to make even the worst situations a little better is to remind yourself that your situation (no matter how it looks like) is not even close to the worst.

Because it really could be waaaay worse. You took a huge loss? Better than contracting Ebola don’t you think?

Have a difficult day? Better than the guy who lives in a war-torn country.

You get the point – whatever happens to you, there is almost certainly someone who would gladly trade their fate with yours.

Marcus Aurelius said,

Choose not to be harmed and you won’t feel harmed. Don’t feel harmed and you haven’t been.

This act of cultivating perspective was of critical importance for him – and it is for all the practicing stoics around the world. For them, it is clear — there is no good or bad. There is only perception. And you can control your perception.

So, as an aspiring stoic, if you can come to a point where you can extrapolate past your first impression of things (trading loss= bad, let’s say), as you think deeper you’ll begin to develop wisdom, and you’ll see that everything is simply an opportunity.

As hard as it seems…

This realization is incredibly powerful – it’ll allow you to find a little bit of gratitude, a little bit of relief, even amidst terrible tragedies.


4. Reflect on life

Stoics spend a lot of time thinking about their role and position in life, how they can become better people, be happier, and deal with the problems they face.

For instance, When Marcus Aurelius said,

Live a good life. If there are gods and they are just, then they will not care how devout you have been, but will welcome you based on the virtues you have lived by. If there are gods, but unjust, then you should not want to worship them. If there are no gods, then you will be gone, but will have lived a noble life that will live on in the memories of your loved ones.

he really meant to say that we (himself included) should strive to think critically and be good human beings, helpful towards each other, nondelusional, disciplined, wise, and non-attached to petty things like money, fame, physical beauty, material possessions, etc. – those things promise durable happiness but never deliver.

Why should we strive to be like that? Because that is our nature; it’s who we are deep inside. But a lot of us forget that. So the practice of reflection helps us see and connect to what’s really important.

And journaling helps in this.

Here’s what Seneca said,

Who exactly do you want to be? What kind of person do you want to be? What are your personal ideals? Whom do you admire? What are their special traits that you would make your own It’s time to stop being vague. If you wish to be an extraordinary person, if you wish to become wise, then you should explicitly identify the kind of person you aspire to become. If you have a daybook, write down who you’re trying to be, so that you can refer to this self-determination. Precisely describe the demeanor you want to adopt so that you may preserve it when you are by yourself or with other people.

The point of this exercise is to reflect – to use your head in a constructive way. It’s a place where you can analyze your experiences. It’s also a great way to get things off your mind.

I can’t even begin to describe fully how useful this is.


5. Remind yourself that you will die

Yes, you will die (in case you haven’t noticed).

If you’re lucky, you’ll die of old age. If you’re unlucky, you’ll die sooner.

When? Nobody knows. But, the Stoics find this thought humbling, and also energizing, believe it or not.

Here’s Seneca’s take,

The final hour when we cease to exist does not itself bring death; it merely of itself completes the death-process. We reach death at that moment, but we have been a long time on the way.


One must take all one’s life to learn how to leave, and what will perhaps make you wonder more, one must take all one’s life to learn how to die.


It is not that we have so little time but that we lose so much. … The life we receive is not short but we make it so; we are not ill provided but use what we have wastefully.


Let us prepare our minds as if we’d come to the very end of life. Let us postpone nothing. Let us balance life’s books each day. … The one who puts the finishing touches on their life each day is never short of time.

It is not surprising that one of Seneca’s biographies is titled Dying Every Day. He also wrote an essay called On The Shortness Of Life. It’s because he thought it was extremely important that we constantly remind ourselves of our mortality, so that, as Marcus Aurelius urged,

You could leave life right now. Let that determine what you do and say and think.

It’s just a personal reminder to continue living a life of virtue, N.O.W, not tomorrow – no excuses.

The thought of death is only depressing if you miss the point. Used properly ‘memento mori’ (Latin: “remember that you have to die”), is a strategy that will help you create priority in your life, but also meaning.

Used properly, you’ll begin to treat your time as a gift and not waste it on trivial concerns.

Death doesn’t make life pointless but rather purposeful. And fortunately, a simple reminder that our time is limited can bring us closer to living a kind of life that is worth living.


6. Practice mindfulness meditation

If you’re a follower of this blog, you already know the importance of the practice (and I hope you have daily one).

I could go on and on about this but I’ll be brief: Sitting meditation is, in my opinion, the number one most important self-improvement habit.

20 minutes every single day… if you can install that one habit in your life, this one most important practice will help you develop into a better trader – you’ll gain better clarity, patience, focus, wise discernment, resilience, essentially all of those wholesome qualities that a good trader must possess.

And if you want to radically change your experience of living, strive to cultivate moments of mindfulness during the day. Mindfulness is really a process of letting go what you can’t control.

Epictetus said,

Happiness and freedom begin with a clear understanding of one principle: Some things are within our control, and some things are not. It is only after you have faced up to this fundamental rule and learned to distinguish between what you can and can’t control that inner tranquility and outer effectiveness become possible.

Mindfulness helps you develop an awareness of the kinds of thought you spend your time entertaining.

We all have a range of skillful and unskillful thoughts, and with time (and practice) you’ll begin to see clearly and without ambiguity the kinds of emotions and thoughts and feelings that are productive of suffering in your life, or others that are productive of happiness.

And you’ll be able to let go more easily of those that don’t serve you.

This is not to say that during an hour or a week of practice, all the unskillful habit patterns of your mind will just disappear. No, this is why it’s called mindfulness “practice”. It takes a repeated seeing and learning to effect the transformation.


*Bonus* Give yourself breaks

Here’s something that always left me scratching my head: Some people get into trading to escape the 9-5 rat race, but then they feel the need to sit in front of their computer screens all day, either hunting for trades, micromanaging their positions, obsessing about the markets….

It’s like they escape one prison only to get locked up in another one.

Go figure…

Here’s my message to you: Try not to make an obsession out of trading. Trading is not that important. Really, it’s not.

Paradoxically, when you let go of the obsession, trading becomes easier. And more profitable.

And sometimes, it’s okay not to trade for one week, two weeks, or even more. You’re not missing out on anything in the markets. I promise you. If you think you are, then you haven’t understood what trading is all about.

You see, it’s not trading opportunities that are lacking in the markets. Trades are always arising and passing at all times.

What’s lacking is the ability to execute your plan as it is; it’s the capacity to go through wins and losses with stability of mind; it’s patience, discipline, resilience, objectivity….

And those need to be cultivated and maintained. Absolutely!

Now, tell me, how do you plan on doing that if you’re not giving yourself a break once in a while?

Seneca said,

The mind must be given relaxation—it will rise improved and sharper after a good break.

He expands further on this thought by using an analogy — A field that isn’t given a break, where crops are not rotated, will quickly lose its fertility. So too will a mind and a body that’s overworked. [Paraphrased]

So by all means, take your much-deserved break once in a while. You don’t have to trade every day. That’s what’s great with this endeavor, it’s the capacity to say, “No, I’m not gonna work today. I don’t feel like it.”

Yet many feel they A B SO L U T E L Y have to trade, this moment, this day! No. Forcing yourself to trade is the best way to mediocrity.


Conclusion #1

We’ve just scratched the surface of stoicism. If you want to learn more, I recommend this book:  The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living by Ryan Holiday.

Let me reduce what we’ve seen in this series in one coherent form.

We’re all born equal (in the human sense). We are born with different skin colors, cultures, religions, etc., but we possess the same inherent tendencies and qualities and flaws.

For instance, all of us are prone to fear. If we don’t all fear the same things, we have the same fear.

We are also all prone to temptation, laziness, avidity, or whatever….

If we are not all tempted about the same things, or lazy in the same circumstances, all these things are still universal.

So in that sense, all men and women are born similar — we are of the same nature and we’re also plagued with the same afflictions.

But, then some discover the art of living.

When the art of living is discovered, investigated, and applied, it pours into everything one does – entrepreneurship, trading, sports, parenting, etc, etc..

It is in the application of that art of living that some are given a great advantage over the others. It gives them a solution to that fear; a reason with which to question and overcome all sorts of mental defilements. It gives them perspective with which to come to terms with difficulties.

That’s what philosophies like Stoicism or Buddhism do. They’re the ultimate advantage.


Conclusion #2

As said on the Start Here page of this blog, you don’t need to go see a psychologist who would charge you over 200 bucks per hour for him to tell you what you’re learning here, on this website.

I mean, you could, but you don’t have to. For instance, I gave you enough information in this series of blog posts to get you started and make radical changes in your life – and in your trading.

And all of that for free!

But I understand, sometimes it is useful to seek some help – especially if you can find someone who actually walks the talk; someone who can help you sort through the noise and go to the essential.

And usually, you can get that for a lot cheaper than the classical $200+/ hour formula. Much cheaper!

For instance, in the Trading Psychology Mastery Course, we go through all of that — plus more.

I don’t just rehash things at you.

No, no, no…. we actually practice some exercises together and we go through some teachings similar to what you’ve read here, so that you can begin to witness the first palpable changes, usually within a few weeks (if not days).

The end result is better clarity, patience, focus, wise discernment, resilience, essentially all of those wholesome qualities that a good trader must possess.

Two Ground Breaking Courses At An Irresistible price 

  • The Trading Psychology Mastery Course
  • The Trading For A Living Course

When you grab the bundle (both courses together), you get 25% off the total price. That's 100$ of savings.

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I've been trading for a living since 2006. By merging mindfulness (an in-depth study of the mind and its tendencies in the present moment), a good trading process, and an efficient business practice, I went from being a losing trader to a consistently profitable one. Through my work here at Trading Composure, I aim at helping you do the same.
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