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The Spiritual Side of Trading: Virtues for Successful Trading


In the book of the Bible called 2nd Peter, beginning in verse 5, we find the following words written by the apostle Peter:

"... Make every effort (be diligent) to add to your faith, goodness; and to goodness, knowledge." Elsewhere in the Bible, we find that "the hand of the diligent makes him rich."

How can we apply this to our trading? What do faith and diligence have to do with trading?

When you are trading, you must have faith in two things:

  1. Yourself.
  2. Your knowledge of what you are doing.

You acquire this faith, this confidence in what you are doing, through diligence, by making every effort to acquire knowledge. But keep in mind that you must be diligent to acquire the right knowledge. It is all too easy to be fooled by marketing hype into acquiring worthless knowledge, information that will not succeed in helping you to become a better trader. So goodness must also enter the picture.

Once you have faith in yourself and your methodology, add good information to what you have already learned.

But the apostle Peter, through the inspiration of God, had a lot more to say. In verse 6, we are told to add self-control to our knowledge, and to self-control add perseverance.

Would you agree that self-control is critical to successful trading, and that the only way you can develop self-control is to persevere — stick with it until you have it? Peter then finishes that verse, writing "...and add to perseverance, godliness."

What in the world can he mean by godliness? How can we apply that to trading? The word translated "godliness" is the Greek word "eusebeia." It also means "respect." Do you respect the power of the market? You should. The market goes where it goes without asking for your permission. Respect for market dynamics must be included in your trading plans. So to perseverance, we must add respect.

Next, the apostle Peter tells us to "add to respect, brotherly kindness," i.e., good will. You know that as a trader you have to deal with others. A prominent person in this regard is your broker. There comes a time when you need to call the broker, even if you are an electronic trader. Trading is not 100% devoid of human contact. So part of trading is learning to be nice to people. It's just good business.

This brings to mind the selfish trader, the one who wants to have it all. The selfish trader is not a practitioner of good will. This is the trader who will try to know in advance where market turning points will be. This is the trader who lacks the knowledge that no human can tell you with absolute certainty where the next tick will be, let alone where prices will turn in the market.

Peter has yet more to say that we can apply to our trading. In verse 8 he says, "if you possess these qualities (the virtues we've been looking at) in increasing measure, they will keep you from being ineffective and unproductive." He also says, in verse 9, that "if anyone does not have them, he is short-sighted and blind."

Can anyone disagree with a trader's need to be diligent, and knowledgeable? Can you disagree that it is important to persevere and develop self-control? Would you argue that it doesn't pay to be nice to people, to show respect to others and to the markets?

God's words are also revealed through the apostle Paul, and they apply to us as traders. Some of these virtues are supportive of what the apostle Peter had to say, and all of them are virtues that cannot hurt any trader, they can only be helpful. We find God's inspired words to us in the New Testament of the Bible in the book of Galatians, Chapter 5, beginning with verse 22:

Paul begins by telling us we must have love. This is the same word that was used by Peter which I told you means good will. But it also has other meanings, one of them is affection. You really must have an affection for trading and the markets if you are to succeed in them. This love or affection for what you do is essential for persevering in the marketplace. As we will see later, perfect love, according to scripture, drives out fear. We will discuss that when we come to the topic of fear.

Paul tells us we must have joy. The word used here also means gladness. Are you a happy, joyful trader, glad for the opportunities presented by the market? Or do you trade uptight, fearful, and with great trepidation? It is truly difficult to trade if every trade is, for you, a traumatic event.

Paul tells us next that we should be at peace when we trade. We should be relaxed, at rest, quiet, exempt from rage. When we trade we should be in step with the market. The word used here also mean to be in harmony with the market, because peace and harmony make and keep things safe, and the results of our efforts will be prosperity. Being at peace means we should be assured of the outcome of our trading. Did you ever think you would find such things in the Bible?

But Paul is not done yet. He tells us that we must be patient, constant, and steadfast. Paul called this "longsuffering" in some translations of the Bible. Is that you when you trade? Are you patient, constant, and steadfast? Do you stick with what you know? Do you follow your plan?

Next, Paul tells us to be gentle, good, and to have faith. Let's look at what those things mean in the original Greek so that we can apply them to our trading.

Gentleness is talking about morality, moral goodness, and integrity. Do you see anything wrong with applying integrity to your trading? We're going to talk about the morality of our trading in another section, so I will leave the depth of that discussion for later. The word good as used by Paul in this instance has to do with uprightness of heart and life, certainly virtues to be sought after, and which are part and parcel with morality. Paul also tells us to have faith, i.e., assurance, belief in what you are doing. This is where courage of conviction enters the picture. Do you believe in the truth of the knowledge you have of trading and of the market? If not, how can you possibly trade with any assurance that your trading will produce your desired results? Faith is conviction. Faith is trust in your ability to trade successfully.

Continuing, Paul says: You should be meek and temperate. By the word meek, Paul means to be mild, calm, and at ease. And this is the way you should be when you are trading. By temperate he means under control; self-disciplined and self-controlled. I suppose there have been plenty of books written about that in conjunction with profitable trading.

Then Paul concludes with a rather interesting statement. He says, "Against these, there is no law." Can you agree with that? Has anyone ever passed a law that says you cannot be happy, joyful, in love with your work, believing that what you are doing will bring you success? Is there a law against being a nice person, a humble person, an ethical person, or a person who practices moderation? All of these virtues can only enhance your trading as well as your whole life.

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