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The Spiritual Side of Trading: The Need for Wisdom

 

Apply these to your trading and your life.

“Only fools refuse to be taught. Wisdom calls out in a loud voice wanting to be heard.”

“Wisdom is supreme; so get wisdom. Though it costs you all you have, get understanding (of the markets and how they work.)”

The above proverb reflects much of how I feel about the subject of wisdom. For years I have pursued it diligently. I long ago realized that I was a fool – with that realization I began an unrelenting hunt for wisdom in my trading. The quest still goes on, and probably will as long as I live. It is one of the most important things in my life.

The following is a paraphrase of proverbs taken from various translations of scripture and set into language that makes them more easily understood in light of our purpose here, which is to bring wisdom into the trading of markets. It is my pleasure to share them with you.

Purpose

The purpose of these proverbs is to help you to attain wisdom and discipline; for understanding words of insight; for acquiring a disciplined and prudent life of doing what is right, just, and fair.

They are set forth for giving prudence to the simple-minded, and knowledge and discretion to the beginner. Let those already wise read them and add to their knowledge. Do you think that is you? You say to yourself, "I am wise!" But I can tell you that nine out of ten wannabe traders are truly simple-minded when it comes to the business of trading.

The Bible says that respecting God is the beginning of knowledge, but fools despise wisdom and discipline. So many aspiring traders think that they can somehow "make it" by acquiring knowledge. They think: "Why not? After all, isn't this how I have achieved my current position in society?"

However, knowledge is not enough. It is the right application of knowledge that will make you a successful trader. Wisdom is defined as the right application of knowledge. Without wisdom, there is no way you can exercise self-control. Wisdom is the only way to achieve discipline, and a trader needs self-discipline above all else.

Don't be enticed

Read these instructions and don’t forget these teachings. If salespeople, promoters, and hustlers try to entice you saying “Invest along with us, we’re making the hot trades, we’re eating up the markets, we’ve got the most fantastic system,” don’t go along with them. Don’t listen to them, because they will head you straight for danger. Trouble and disaster await all those who want easy wealth and to “get rich quick.”

The lips of these financial whores drip honey, and their speech is smoother than oil. Flattery is their stock in trade. But afterwards, you are left with only the taste of bitter gall as you realize that they have led you down the path to financial ruin and destruction.

Wisdom will save you from the words and enticements of these greedy fiends. Their words are perverse and crooked. They are designed to play on your greed and suck you in. What they have to say is devious and deceptive. They blaze a crooked trail and don’t even realize that they themselves are staggering down that same path, ultimately snaring themselves in the same trap in which they have entangled others.

You beginners especially, and you who are older, who may have become less nimble-minded and astute, run from these crooks. Don’t go near them, because they will feast on your wealth, and all your labors will go to enrich them. You will be left groaning, tired and sick to your stomach, having been cheated out of all your wealth, your savings, and the fruits of all your labors. Then you will say “Oh, if only I had been wise. If only I had listened.”

Benefits of wisdom

Be faithful and honest with yourself in your trading, be diligent and consistent, and it will bring you prosperity.

Anyone willing to be corrected is on the path to success. Those who refuse correction have lost their chance.

Wisdom in financial situations

If you have been foolish enough to co-sign someone else’s debt, if you have been trapped by what you have said, ensnared by the words of your mouth, then do this to free yourself, since you have fallen into their hands: Go and humble yourself; press your plea with them! Don’t even allow yourself to sleep until you free yourself from the mistake you have made.

Follow the rules and keep your financial life intact; ignoring them means financial ruin.

Steady plodding brings prosperity; hasty speculation brings poverty.

Any enterprise is built by wise planning, becomes strong through common sense, and profits wonderfully by keeping abreast of the facts.

Riches can disappear fast — so watch your business interests closely. Know the state of your investments.

Those who work their plan will prosper, but those who chase fantasies lack judgment.

Laziness

If you are lazy, learn a lesson from the ants. Learn from their ways and be wise. Because even though they have no one over them to make them work, yet they labor hard all summer gathering food for the winter.

Lazy people won’t use the tools at their disposal, but the diligent make good use of everything they find.

The lazy are full of excuses. “I can’t go to work” they say. “If I go outside I might meet a lion in the street and be killed.”

Wisdom vs. Foolishness

If you instruct the wise, they will be wiser still and will add to their learning. If you instruct fools, they will ignore you and may even insult you.

The wise in heart will accept rules and live by them, but the chattering fool will come to ruin by ignoring these rules.

The wise store up knowledge, but fools blurt out everything they know, which only leads to sorrow and trouble.

The earnings of the wise advance their purposes; fools squander their earnings on foolish things.

A fool’s pleasure is in doing stupid things; the pleasure of the wise is in being wise.

What fools dread overtakes them; what the wise desire will be granted to them.

When the storm has swept by, the foolish are gone, but the wise are still there standing firm.

The wise are guided by their honesty; fools are destroyed by their dishonesty.

The fool sometimes gets rich for the moment, but the reward of the wise is lasting.

Fools think they need no advice, but the wise listen to others.

A fool is quick-tempered; the wise man stays cool in the face of insult or adversity.

The wise ask advice from friends; the foolish plunge ahead and fall.

The wise think ahead; the fool doesn’t, and even brags about it.

The wise eat to live, while the fool never gets enough.

The wise look ahead. Fools fool themselves and won’t face facts.

The wise are cautious and avoid danger; fools plunge ahead with great confidence.

Simpletons are crowned with folly; the wise are crowned with knowledge.

The wise are praised for their wisdom; fools are despised for their folly.

Fools despise advice; the wise consider each suggestion.

The wise are hungry for the truth, while fools feed on trash.

The wise think before they speak; the foolish pour out their nonsense without even giving it a thought.

A person of few words and settled mind is wise; therefore, even a fool is thought to be wise while remaining silent. It is profitable for fools to keep their mouths shut.

The wise learn by watching ruin overtake the foolish.

The foolish will lose in the end; the wise will end up with the winnings.

The wise save up for the future, but the foolish spend whatever they get.

Wisdom is a fountain of life to those possessing it, but a fool’s folly is his burden.

Wealth vs. Poverty

The wealth of the rich is their strength, but the poverty of the poor is their curse.

Hard work brings prosperity; playing around brings poverty.

Pride vs. Humility

The proud end up losers, but the humble become wise.

Pride leads to arguments; be humble, take advice, and be wise.

Pride goes before destruction, and arrogance before a fall.

Pride ends in destruction; humility in honor.

Thought Provokers

Gossips go around spreading rumors, while the trustworthy try to quiet them.

To learn, you must want to be taught. To refuse correction is stupid.

The plans of good people are honestly thought out, but advice from the dishonest is deceitful.

Everyone admires those with good sense; but those with a warped mind are despised.

It is better to get your hands dirty and eat, than to be too proud to work and starve.

Lies will get anyone into trouble, but honesty is its own defense.

The truthful give honest testimony, but a false witness tells lies.

Some people like to make cutting remarks, but the words of the wise soothe and heal.

Truth stands the test of time; lies are soon exposed.

Wealth taken from gambling quickly disappears; wealth from diligent effort and hard work grows.

It is pleasant to see plans develop. That is why fools refuse to give them up even when they are wrong.

If you are looking for advice, stay away from fools.

Before everyone there lies a wide and pleasant road that seems right, but ends in death.

Only simpletons believe what they are told! The prudent check to see where they are going.

The quick-tempered do foolish things, and despise those who are patient.

Work brings profit; talk brings poverty.

The wise control their temper. They know that anger causes mistakes.

Mockers resent correction; they will not consult the wise.

When you are feeling gloomy, everything seems to go wrong; when you are feeling cheerful, everything seems right.

Plans go wrong with too few counselors; many counselors bring success.

Everyone enjoys giving good advice, and how wonderful it is to be able to say the right thing at the right time.

If you profit from constructive criticism, you will be elected to the "Wisdom Hall of Fame." But to reject criticism is to harm yourself and your own best interests.

Wisdom is better than gold, and understanding more valuable than silver.

Hunger is good if it makes you work to satisfy it.

A rebuke to those of common sense is more effective than a hundred lashes on the back of a rebel.

It is safer to meet a bear robbed of her cubs than fools caught in their folly.

Fools find no pleasure in understanding, but delight in airing their own opinions.

At times the rich think of their wealth as an impregnable defense, a high wall of safety. What dreamers they are!

Rumors are dainty morsels, too often consumed with great relish.

What a shame — yes how stupid! — to decide before knowing the facts.

The intelligent are always open to new ideas; in fact they look for them.

It is dangerous and stupid to rush into the unknown.

People who love wisdom love their own best interest, and will be successful.

Get all the advice that you can, and be wise all the rest of your life.

Stop listening to teaching which contradicts what you know is right.

If you won’t plow in the cold, you won’t eat at the harvest.

The intelligent person sitting as judge will weigh all the evidence carefully, distinguishing the true from the false.

If you love sleep, you will end up in poverty. Stay awake, work hard, and there will be plenty to eat.

“Utterly worthless”, say the buyers as they haggle over the price. But afterwards they brag about their bargain.

Good sense is far more valuable than gold or precious jewels.

Don’t tell your secrets to a gossip unless you want them broadcast to the entire world.

A fortune can be made from cheating, but there is a curse that goes with it.

The glory of the young is their strength; of the old, their experience.

The man who strays away from common sense will end up dead.

The wise are mightier than the strong. Wisdom is mightier than strength.

Don’t go into the battle without wise guidance; there is safety in many counselors.

A person without self-control is as defenseless as a city with broken-down walls.

In the mouth of a fool a proverb becomes as useless as a paralyzed leg.

As dogs return to their vomit, so do fools return to their folly.
There is one thing worse than a fool, and that is a person who is conceited.

Don’t brag about your plans for tomorrow — wait and see what happens.

Sensible people watch for problems ahead and prepare to meet them. Simpletons never look, and suffer the consequences.

Ambition and death are alike in this: neither is ever satisfied.

Persons who refuse to admit their mistakes can never be successful. But if they admit them and forsake them, then they get another chance.

Those who want to do right will get a rich reward. But those who want to “get rich quick” will quickly fail.

Trying to “get rich quick” is wrong and leads to poverty.

It is foolish to entirely trust yourself, but those who use God’s wisdom are safe.

One of the most beautiful pieces of scripture that any trader can take to heart is found in the eighth chapter of the book of Proverbs. I end this section with quotes from that chapter:

“Can’t you hear the voice of wisdom? She is standing at the city gates and at every fork in the road, and at the door of every house. Listen to what she says: ‘Listen men!’ She calls. ‘How foolish and naive you are! Let me give you understanding. Let me show you common sense! Listen to me! For I have important information for you. Everything I say is right and true, for I hate lies and every kind of deception. My advice is wholesome and good. There is nothing of evil in it. My words are plain and clear to anyone with half a mind — if it is only open! My instruction is far more valuable than silver or gold.’

“‘I, Wisdom, give good advice and common sense. Because of my strength, governments reign in power. I show the judges who is right and who is wrong. Rulers rule with my help. I love all who love me. Those who search for me shall surely find me. Unending riches, honor, justice and rightness are mine to distribute. My gifts are better than the purest gold or sterling silver! My paths are those of justice and right. Those who love and follow me are indeed wealthy. I fill their treasuries. The Lord formed me in the beginning, before he created anything else. From ages past, I am. I existed before the earth began. I lived before the oceans were created, before the springs bubbled forth their waters onto the earth; before the mountains and the hills were made. Yes, I was born before God made the earth and fields, and high plateaus. I was there when He established the heavens and formed the great springs in the depths of the oceans. I was there when He set the limits of the seas and gave them his instructions not to spread beyond their boundaries. I was there when He made the blueprint for the Earth and oceans. I was always at his side like a little child. I was his constant delight, laughing and playing in his presence. And how happy I was with what He created — His wide world and all His family of mankind! And so, listen to me, for how happy are all who follow my instructions.’

“‘Listen to my counsel — don’t refuse it — and be wise. Happy is the man who is so anxious to be with me that he watches for me daily at my gates, or waits for me outside my home! For whoever finds me finds life.’”

One last word: in the Biblical sense, to be wise is to seek God and learn to live in ways that please Him. The fool, in that sense, is the one who determines to get through life on his own terms, thereby never discovering the purpose for which God created him.

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.