A Trading Tip from Ravana This Dussehra...

Most of us will celebrate Dussehra this Saturday. This marks the day when Lord Ram won the battle against Ravana and rescued his wife Sita. Dusshera or Vijayadashmi is celebrated to commemorate the victory of good over evil.

Apart from this, Dussehra is also about learning lessons from your own mistake and those of others. King Ravana was a brute and a great scholar. So, Lord Rama asked his brother Laxman to receive knowledge from dying Ravana.

DashMukhi Ravana

Ravana taught Laxman about politics, administration, and statesmanship. He also shared his philosophies of life, which he learned from his own bitter experiences.

But one lesson from that stands apart from the rest. He stated this, "The person who considers himself bigger than the world meets the fate of mine. Even learned people deviate from the path of truth when influenced by ego. Ego signifies darkness. It takes man to destruction."

His ego was Ravana's biggest enemy. It certainly turns out to be every trader's biggest enemy as well. Today, I want to share an article with you I wrote two years ago on defeating the ego within us.

Vijayadashmi: Defeating the Ego Within

Apurva Sheth

Two days back, we celebrated Vijayadashmi or Dussehra, one of the most popular Hindu festivals. The festival is much more than just revenge or burning effigies of Ravana.

The real essence of the festival is the victory of good over evil, truth over deception, knowledge over ignorance, and light over dark. This festival is more about fighting the evils within us than outside us.

Ravana was replete with admirable qualities we admire in others and in ourselves. He was a benevolent ruler (loved by the people of Lanka), knowledgeable (learned all four Vedas), and powerful (command over six shastras).

Despite these good qualities, he also had weaknesses. Ravana prayed to Lord Brahma for several years. Lord Brahma, pleased with Ravana's austerity, offered him a boon. Ravana asked for absolute invulnerability from and supremacy over gods, heavenly spirits, demons, serpents, and wild beasts. He omitted humans, on purpose, because he thought humans did not stand a chance against him.

Ravana's ego made him believe that a human couldn't harm him. Rather than Ram, Ravana's ego was his own worst enemy, which ultimately led to his death and the destruction of his family and Lanka.

Like Ravana, everyone has an ego. Like him, we may construct a false self image. We all know the harm our egos can wreck in our personal lives, in our relationships, etc.

However, our egos are a part of our personality. We carry it everywhere we go. And the one place we must control our egos is in trading.

When you trade, you take a position with a certain point of view of the market and a stock. When you trade, along with the money, your pride is also at stake. The problem is when you are more concerned with your pride, than the money on the table.

When trading, you want the market to respect your opinion. You want it to respect your knowledge and the analysis and efforts you have taken to reach your conclusion regarding the trade.

But let me put it as bluntly as I can: Markets do not care about your view or your efforts. It has a mind of its own. It will do what it wants to do. You have no control over it. The sooner you accept this fact, the better. Otherwise, your trading career may face the same fate Ravana did.

The market may not respect you. But you must respect the market.

Traders often don't place stoplosses because they hate to be proven wrong. They prefer to lose money on a position, rather than accept their miscalculation. This obviously comes at the expense of trading capital.

Many traders even add to a losing position when stuck in a trade. The trader's ego doesn't want to be proven wrong. They are so emotionally attached to a particular position that they hold on to it longer than necessary. Some would even go to the extent of adding on to a losing position just to get out at breakeven from the trade.

On the other end, most traders tend to book profits too early. They argue that markets are too volatile and can turn anytime-a bird in the hand is better than two in bush and the like. But really, under the guise of prudence, the trader's ego wants a pat on the back for making this trade.

Closing a trade at profit does give one's ego/pride a boost, but a trade should only be closed on its own merit.

The ego can manifest itself in many ways during a trader's life. Let the festival of Vijayadashmi be a reminder that a trader's success is largely determined by the extent to which they can eliminate pride, their personal self image from a trade.

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6 Responses to "A Trading Tip from Ravana This Dussehra..."
Arpan Sharma
03 Oct, 2017
Nice article Apurva.....Good. @Dollar AdvisoryLike 
MANI
30 Sep, 2017
Apurva, what an article? Excellent. I even read it to my family.Like 
Vipul Sanghvi
30 Sep, 2017
Apurva......Good One ....Like 
Bharadwaj
29 Sep, 2017
Very apt message for trading as for life in general. As they say EGO --- Edges God Out :)) Wishing all a very happy Vijayadashami.Like 
PRAVIR KUMAR MULIYIL
27 Sep, 2017
APURVA SETH : EXCELLENT ARTICLE ! I WOULD SAY IT IS SIMPLY " SUPERLATIVE" - BUCK -UP AND KEEP YOUR PRESENT TEMPO ON ! BEST WISHES & WARM REGARDS, == MULIYIL==Like (1)
Jog Kalra
27 Sep, 2017
Simply Superb, Apoorva ! You have beautifully explained the role of ego/personal self-image in stock trading business and how adversely the same affects the trading besides of course the personal relationships/careers etc. Keep it up ! RegardsLike (1)
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