December 12

This Movie can Teach You 5 Important Lessons About Trading

By Yvan

fight club trading

Last night, I re-watched a movie I hadn’t seen in years –Fight club.

Fight Club is without a doubt a cult classic. Upon its release, it got poor ratings from some of the most notable film critics, so it ended up not being that popular. But eventually, it went on to gain a considerable following.

Fight Club is not your average movie. It pushes one to awaken from the illusion of certainty, the slumber of materialism, the grip of control 

Watching the movie for the second time made me realize just how relevant some of the lessons are to trading.

Also, some of those lessons are what you’d typically see emanating from traditions like Stoicism and Buddhism — although in Fight Club, those lessons are taken to an extreme.

If you are one of the few people in the world who haven’t seen the movie, I suggest that you do so. It’s definitely one epic mind twist that will leave you thinking.

Without further ado, here are 5 important lessons I got from watching Fight Club and that I want to share.

1. — Don’t Get Attached.

In the above scene, Tyler Durden (Brad Pitt) asks Jack (Edward Norton) if he knew what a duvet was, and he goes on to share his views on materialism which can be resumed in one line:

The things you own end up owning you.

Trading Lesson.

The Buddha had it right: pretty much all of our struggles, from anxiety to frustration, from sadness to anger, from worry to grief, all stem from the same thing …

The struggles come from being too tightly attached to things.

In the above scene of the movie, Tyler Durden refers specifically to attachment to material possessions, but in reality we can be attached to anything — people, a comfort zone, beliefs, ideas, the past, the future, trade outcomes…

Let’s consider the attachment to trade outcomes. When we’re attached, we’re attempting to fit an unknown future into the mental box we have for it. And when it doesn’t fit, this disappoints us. Inevitably.

But what if you try to experience trading while relaxing the attachment?

What if you:

  • Accept the moment for what it is.
  • Follow your plan and justify less.
  • Accept any short-term trade outcome with openness.
  • Complain less.
  • Worry less.
  • Trust your process.

You see, this life is your only life and it’s ending one minute at a time. Yet most of the time, you’re lost in mental stories, you’re thinking about the past and projecting it onto the future.

You’re letting things, people, and situations define you.

You’re doing all those things but you’re never here, with this unique moment in your life. You’re lost somewhere in projections, attachments, fantasies, and delusions.

So ask yourself this question: What would happen if you dropped those stories you tell yourself about how things are and how they should be? What if you approached your life (and trading) from a place of acceptance and harmony?

Deliberate over this, then make a firm decision.

2. — Challenges Are Good for You.

Right after the conversation about consumerism (above), Tyler Durden and Jack leave the bar. As they stand outside, Tyler chastises Jack about him needing a place to stay yet never asking.

At one point, Tyler randomly requests that Jack hits him, at which point he proclaims:

How much can you know about yourself if you’ve never been in a fight?

Which then leads the two to engage in a fistfight.

Trading Lesson.

In a trading context, I choose to interpret that phrase in this way: How much can you know about yourself if you’ve never taken risks and have never had your ass kicked by the market?

You will never know what you are capable of doing and withstanding until you are faced with real challenges that blow away your sense of security and identity.

That’s why I’ve often said: Beginner’s luck stifles growth. Failure is good for you!

Putting yourself in the path of danger is a way to discover yourself, uncover what’s limiting you deep down inside, and work on transcending that.

3. — Stay With the Pain, Don’t Block it out.

In this epic scene, Tyler Durden holds Jack’s hand, on which he induces a chemical burn.

Tyler then urges Jack to be with the agonizing pain, fully without trying to escape it.

Stay with the pain, don’t block this out…

Without pain, without sacrifice, we would have nothing!

Trading Lesson.

In trading, we feel pain when the market moves against us, when our trade ideas turn out wrong, and when we’re forced to take losses.

Pain is a very normal physical and mental phenomenon. But it’s worth inquiring about it; pushing past it.

From a biological standpoint, emotional pain is just a hormonal cascade that you can just learn to become aware of and be willing to feel.

Just sit with it without trying or wanting to push it away. You’re not clenching your jaw and simply bearing the pain, instead, you’re interested in exploring the pain, how it feels, seeing its nature, exploring its scope, depths, and limits.

That is the ‘goal’ of introspection. It is to inquire about our experiences and see what is there.

Curiously, when you do that, you realize that pain, no matter its shape or form, is bearable. With awareness you can learn to experience it not as pain but as a neutral sensation arising in your field of consciousness.

And as with anything that arises, it also has a lifespan, and part of the practice is knowing this — knowing that nothing lasts forever.

So, doing what is difficult over what is easy is definitely a skill that anyone can learn, and how one pays attention to the present moment largely determines one’s ability to cultivate and apply that skill.

Eventually, with enough practice, this allows you to trade your set of rules efficiently, thus returning consistent results out of your trading operations.

What’s more, what can be expected, if such a behavior is practiced and refined, is the learning of enjoying the struggle.

In other words, when we keep doing things that are in our best interests — as hard as it is to do those things — slowly our minds start to create new neural pathways; new associations, consequently linking the mental struggle to the ensuing pleasure of having consistent trading results.

4. — You’re Free to Do Anything.

In that same scene (above), Tyler says,

It’s only when you’ve lost everything that you’re free to do anything.

Trading Lesson.

This is also a lesson in letting go of attachment.

Blowing up a trading account is often a humbling experience that teaches you so much about yourself.

It can show you the limits of what you can endure and how resourceful you are.

Along the way, you can also learn that nothing “bad” can ever happen to you. Life is just a series of experiences.

When you realize this, you also realize that nothing holds you back; since you are nothing and have nothing, you are free to be and do whatever you want in life.

As said above, pain is nothing more than a physical signal – if you don’t read into it that’s all it is. 

5. — Know What Is in Your Control, and What Isn’t.

In this scene, Tyler urges Jack to let go of control.

Stop trying to control everything and just let go…

Trading Lesson.

This scene is not the exactly the idea I have in mind when I talk about letting go, acceptance, not fighting but embracing, and so on… it’s letting go taken to an extreme.

But still, Tyler makes an important point: This control we think we have over things… it is an illusion.

  • Do we have control over all the people close and far, known and unknown, that affect our lives so intimately?
  • Do we control the overwhelming power of nature?
  • Do we have control over the market?
  • Do we control the future?

The answer is no, we don’t have total control. We only have a certain degree of control, and only over certain things.

But our minds have an inherent bias towards total control and predictability.

We don’t like uncertainty.

So, to be a trader is to defy this deeply ingrained bias. Self knowledge is critical. 

What does relinquishing control looks like?

Let’s say you have a trade on.

You might desire a certain outcome for that trade.

That’s what you want.

But what if you let go of this desire?

What if you say, “I don’t know what will happen.” (Btw, you really don’t.)

What if you say, “Let’s see what happens.”

So, you place your trade according to your plan; you put your limit orders (if any), and you let that trade work to fruition, according to your plan.

Win or loss, it is what it is, but you fully trust your process – the only thing you have control over.

Now, this particular trade might be a loss, but as you step back and allow things to happen over and over and over again, your results should take care of themselves, and your needs will also be met – minus the anxiety, frustration, and other limiting states of the mind.

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