The Art of War Sun Tzu Background
The Art of War was 82 chapters of military wisdom covering strategy and tacticis which Sun Tzu used in battle. He started his military career by invading the southern state of Yue . He fought many conflicts but although his troops were once outnumbered by over 6:1, he always managed to win all the battles he fought The Art of War was published around 600 BC and outlined Sun Tzu's tactics and while the book is thousands of years old, it's strategies are still taught in military academies around the world.
The Art of War Adapted for Traders and Investors
When trading in Forex or any other financial market for that matter, you are engaged in a battle where only a minority survive and prosper and the thoughts of Sun Tzu will help you survive and prosper. The book gives an insight into Forex price movement, how to construct a trading plan, how to execute your trades with better odds of success, know when to stay out the market and also how to protect your capital to achieve superior long term profits.
The quotes in the book are all timeless because war is all about human conflict and so to are the markets. While Dean gives his interpretation of what the quotes mean, they will have different meanings for different traders but by seeing trading currencies in the same way as winning a military battle, the trader will become more educated in human conflict which is what trading is all about.
Quotes from Sun Tzu
Here are some of my favourite quotes from the book to give you an idea of the advice contained:
“the experienced soldier, once in motion, is never bewildered; once he has broken camp, he is never at a loss....If you know the enemy and know yourself, your victory will not stand in your way....Just as water retains no constant shape, so in warfare there are no constant conditions. He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain” (Sun Tzu)
The important point about the above is to have a strategy your confident in and to think and vary your tactics, to defeat your enemy. It's a fact that most traders don't want to think for themselves and have no idea of their weaknesses and don't understand their opponent.
“The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom” (Sun Tzu)
There is a time to fight, a time to minimize losses and a time not to fight at all and its the same when trading currencies – you must take losses and not feel bad, protect your equity and also, know not to trade to much.
“He who exercises no forethought but makes light of his opponents is sure to be captured by them” ( Sun Tzu)
If you don't get a Forex education and see the Forex markets in the right way you will soon lose all your money.
“To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself” (Sun Tzu)
the same percentage of traders always lose and this will never change – the only way to win is to understand why most traders defeat themselves, understand yourself and avoid the mistakes others make. The important point to keep in mind is – the markets don't defeat the trader, the trader ends up losing because he defeats himself.
“All armies prefer high ground to low” (Sun Tzu)
Why? Because they can fight with gravity on their side and in Forex markets, you should most of the time be trading with the trend on your side – trends have momentum on their side, just as an army does which fights down hill.
“By persistently hanging on the enemy's flank, we shall succeed in the long run in killing the commander-in-chief” (Sun Tzu)
This quote is one for contrary traders which means that when a trend is losing momentum, you can hit it and once a few traders exit they all will follow and a correction or new trend will unfold. The army is similar once the commander is killed, the enemy many lose heart and run from the battle
“Do not repeat the tactics which have gained you one victory, but let your methods be regulated by the infinite variety of circumstances” and “There are not more than five primary colours (blue, yellow, red, white, and black), yet in combination they produce more hues than can ever been seen” (Sun Tzu)
Forex trading looks simple and it is but every chart or trade set up is slightly different and you need to adapt your tactics, to survive and end up a winner.
“You can be sure of succeeding in your attacks if you only attack places which are undefended. You can ensure the safety of your defence if you only hold positions that cannot be attacked” ( Sun Tzu)
The key point to keep in mind here is to only trade when the odds are at there best. Most traders trade to much and don't get the odds on their side. The sensible general, like the successful trader knows, the right time to attack, retreat or stay out of the way of the enemy. A good general, like a good trader is patient.
Forex traders think that today markets can be conquered by technology and don't see that there fighting human opponents. They don't understand how and why prices really move and their strategies and tactics, are normally to rigid to win. More importantly, most traders are unprepared for the emotional battle which they face against themselves and let their emotions rule their trading signal placement. These traders can't manage their money and never learn, the art of great defence which any army and trader needs to win. The fact is most traders defeat themselves.
The Art of War for Traders and Investors, doesn't contain any specific trading strategies or trading techniques to trade instead, it gives the reader a general philosophy of trading. If you buy this book, you will find yourself referring to it again and again, to read its timeless wisdom an motivational quotes. In conclusion, an original book which any trader pro or beginner, can read to improve their trading skills and strategy.