Humanity has a rich history of storytelling. We like stories so much because we can identify with them, and use them to learn and transmit lessons. Whether real or not, they pull and tug at our emotions because we connect with them personally.
Zen stories are some of my favorite things in the world. They represent the ancient words and deeds of Zen masters, passed through the ages, crossing dynasties and cultures of forgotten people, some originating in the time of the Buddha himself.
They often seem strange and confusing, but if you look closely, they contain profound wisdom.
For instance, here’s one of my favorite Zen stories:
[Tweet “Resist Nothing – How To Trade With Absolute Equanimity (Explained via a Short Zen Story)”]
We shall see
One day in late summer, an old farmer was working in his field with his old sick horse. The farmer felt compassion for the horse and desired to lift its burden. So he left his horse loose to go the mountains and live out the rest of its life.
Soon after, neighbors from the nearby village visited, offering their condolences and said,
“What a shame. Now your only horse is gone. How unfortunate you are!. You must be very sad. How will you live, work the land, and prosper?”
The farmer replied:
“Who knows? We shall see”.
Two days later the old horse came back now rejuvenated after meandering in the mountainsides while eating the wild grasses. He came back with twelve new younger and healthy horses which followed the old horse into the corral.
Word got out in the village of the old farmer’s good fortune and it wasn’t long before people stopped by to congratulate the farmer on his good luck.
“How fortunate you are!” they exclaimed. You must be very happy!”
Again, the farmer softly said,
“Who knows? We shall see.”
At daybreak on the next morning, the farmer’s only son set off to attempt to train the new wild horses, but the farmer’s son was thrown to the ground and broke his leg. One by one, villagers arrived during the day to bemoan the farmer’s latest misfortune.
“Oh, what a tragedy! Your son won’t be able to help you farm with a broken leg. You’ll have to do all the work yourself, How will you survive? You must be very sad” they said.
Calmly going about his usual business the farmer answered,
“Who knows? We shall see.”
Several days later a war broke out. The Emperor’s men arrived in the village demanding that young men come with them to be conscripted into the Emperor’s army. As it happened the farmer’s son was deemed unfit because of his broken leg.
“What very good fortune you have!” the villagers exclaimed as their own young sons were marched away. “You must be very happy.”
“Who knows? We shall see.”, replied the old farmer as he headed off to work his field alone.
Explanation
The wise farmer is practicing non-judgment. In some sense, he understands the true nature of life and that you can’t judge any event as an “end” in a way. Our lives just don’t play out like that. Death is the only definite break, but until then, there isn’t a perfectly formulated end which everything builds to. There is no moment when you can truly say “I have arrived.” Because there’s always tomorrow. And who knows what tomorrow will bring.
Whether a particular day is good or bad, there are a million effects which can arise from one event. Good and bad are interconnected –they are two sides of one same coin! If everything seems perfect, it won’t stay that way. If everything seems bad, it won’t stay that way. Things can change in an instant, at all times. Change is the only constant.
Now, I want to be clear: this doesn’t mean that we can’t be happy. Quite the opposite: because things are constantly changing, it makes you more appreciative of the present moment. It makes you appreciate moments of peace, tranquility, and prosperity when they’re there; it makes you cultivate wisdom and perspective during turmoils and vicissitudes.
What does this mean in trading?
As you see, the farmer’s response to the various circumstances he encounters is to maintain total equanimity.
In my view, here are three principles from that short story that you can apply right now in your trading:
1. When you trade, understands that no matter what is happening right now, winning trade or losing trade, this too shall pass, and so, we shall see what comes up next.
2. Realize that what appears to be “positive” now might turn out to be “negative” later, and vice versa. Be mindful of the kind of expectations you are holding on your mind about how this trade, or this week, or this year is supposed to go. Expectations= premeditated disappointments.
3. Try not to place any judgments on the present moment; instead, simply accept it as it is, drawing no final conclusions.
Reflect on these principles for a moment, and free yourself from the illusion of good and bad. Labeling time like that makes us nostalgic of the past and demanding of the future. There is only here and now. Let that be.