Spiritual Trading

The article on spiritual trading appeared in the magazine “The Eternal solutions” in October’2005. The images of the article are given below and the text version is below the images for those interested. It explores the synergy between spirituality and the stock market.

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There is a direct correlation between spirituality and the stock market. In trading which involves continous buying and selling of shares, you can do well only if you are able to balance your fear and greed. That is what spirituality is all about.-equanimity. In fact, after one has mastered trading skills and money management sufficiently, the best way to see what a person’s sq (spiritual quotient) is to see how he operates in the stock market or whether he is able to balance his fear and greed. Trading literature is replete with how psychology(fear and greed) and money management are more important than trading strategies.

Osho had said that life itself is constant insecurity. Share market gives us this lesson at least in the short run where it is highly unpredictable and profits uncertain. Even in the long run, one can never be sure of the markets.

Another thing that the stockmarket teaches is that one should not have an Ego and get out of the market when one is wrong. Spirituality talks about transcending the eqo which is a notch higher. One has to surrender to the market and get out when one’s decisions are proved wrong which is a good practice for spirituality. Failures are those who have been obstinate about their decisions. One has to bow to the market immediately when decisions prove incorrect.

There is another interesting analogy. In the stock market, there can never be a supreme guru who can be right all the time. Stock market history is littered with people who were superstars and then fell from grace when their strategy could not change with changing times. When there cannot be a supreme guru for the stock market, can there be one for life? To try and become a guru is somewhat unspiritual because “knowledge is food for the ego” and in spirituality there cannot be any ego. One has to explore issues through discussions(according to J.Krishnamurthy) rather than searching for larger than life heroes.

One similarity here is that the stock market too is full of quacks. Like in other walks of life, there are spiritual professionals who distort their profession for money. Application of knowledge is important. If application had been half as good as theory, we would not have more problems that plague our country. In the stockmarket, application is tough because of information overflow. There are analysts too who try to influence decisions with wrong information and wrong analysis. In this regard, there are people in the stockmarket who try to manipulate information.

The so called operator in the stock market is actually god. The only thing close to him are filmstars who too can dictate. It must feel great to control even a few shares even for a day instead of responding to them. Just imagine the destiny of a few stocks in your hand- you can make them or break them without any past karma to worry about. In Hinduism, there is a trinity of gods with specific functions but these guys are all in one- they can create, preserve and destroy any scrip. Wonder what the real god thinks about them.

Cash apart, you need to be spirited if not spiritual to run the market. Not for the faint hearted. Reminds us of another spiritual great, Swami Vivekanand who said that it is better to play football than to read the Bhagvad Gita because a weak person cannot be spiritual. Similarly, manipulating the market is not for the faint hearted.

“We must learn to accept the present moment, wether it is a state of utmost happiness or that of greatest sorrow. It is our expectations which reduces our state of joy whereby we fail to enjoy the greatest thrill of day to day happier instances.”. This is very well said. Following the principle of “perception of reality is more important than reality”, the stock market too runs on expectations and the one who is able to monitor others and alter one’s expectations is the winner. Suffice to say that in the western world, desire is the driving force behind everything but in the eastern world, desire is the bane of everything. The truth of course lies somewhere in between.

There is nothing better than day trading since they don’t carry any positions forward and strictly believe in “live for today”. When you day trade, you need maximum concentration. You almost have to be on meditation with the screen. Most people have one share at a time for better focus. If you don’t live in the moment, you cannot trade effectively. You also have to forget losses and carry on with the trading.

In one of the best trading softwares,  Metastock, there is a process of optimization by which one can choose what moving average and other technical tools apply better on which share/scrip. Several of these spiritual/motivation gurus make sweeping statements of what they teach without knowing how the concepts apply on each individual or his field of expertise and the audience also laps it up without discrimination or viveka as our shastras propound. Only someone like Lord Krishna who is a trikaldarshi and knows how and when to apply what can be revered as a guru. But even gods have to be practical. Wonder how the gods would have dealt with something like the stock market.

All said and done, optimization is one of the best spiritual lessons of the stockmarket. In fact, both Viveka (discrimantion) and Vairagya(distanceing) are required if one goes by trading psychology. Opinions may have been formed because of our past prejudices and conditioning and the person/issue may have changed by then and there is a divergence. Spirituality constantly tells us to be non-judgmental because when you go the deeper roots, you get a completely different picture as in the case of some companies who try to window dress their balance sheet-management accounting v/s financial accounting.

One must be nimble to adjust to the market if one wants to succeed. Tehcnical analysis(which uses graphs to assess the mkt) is more of a market adjusting rather than market forecasting or decision making tool. Interpersonal conflicts are also caused because of opinions formed on prejudices because of different conditionings. For example, if you have not formed a new opinion recently or revised an old one, you have not lived.

Doesn’t it apply to our dear stockmarket more than anywhere? The so called intellectual truth may still be found but then stock market truth will always prove elusive because no trading system can work forever- applies to life actually. Mother Teresa who ran one of the largest charity organizations in the world expressed her reservations about verbal conversations. She said that they sometimes create more problems than they solve. Similarly mechanical trading system takes the emotion out of trading. A trading system similarly makes the decisions unbiased and objective. A truly spiritual person is always objective. This is an example from a share trading system

“ System 1 makes 1000 points a year and system 20 makes 2000 points a year. However if we allow five points per trade for commission and slippage than system 1 costs 20 points a year whereas system 2 costs 1000 points per year.

From an investment perspective, diversity may reduce adversity but from a trading perspective, it is better to focus on a few. What is given above for system 1 represents Pareto’s law “ Twenty percent of the causes lead to eighty percent of the results.

System 1 makes an average of 250 pointer per trade but only trades four times a year

System 2 makes an average of 10 points per trade but trades 200 times a year.

Principles of Yoga says that unless you know how to conduct yourself in the real world, doing Yoga and Meditation can only give marginal results. One of the commonest statements that one comes across in Trading psychology is “Know Thyself”. If you gave the same trading system to two people, one may become a multi millionaire with it and the other may become a begger. This would bely those people who keep repeating that one can do anything with the “can do” attitude. In the market, it can take ages to know what your niche in the market is and where you can excel.

Life’s complexity demands some sanity, some predictability and some dependability. Increased volatility, velocity, uncertainties and complexities make us drift like straw in a storm. Doesn’t the second sentence remind us of the good old market? However when one considers that the market is trending only one third of the time and one would like to believe that there is more movement and more volatility in a trending market, overall the market is spiritual(Calm for two-thirds of the time).

In real life, one progresses more when one moves sideways and thinks out of the box. Take the Bhagvad gita itself. One of the foremost lessons of the Bhavad Gita is “ Do your Karma and don’t worry about the result” Considering the fact that markets are unprecitible, trading is a good practice for applying the lessons of the Bhagad gita. This is particularly true when one considers the fact that the market can go against you anytime. As for investing, even if one considers a two year time frame, it automatically entails distancing oneself from the fruits. Nishkam Karma applies well here because in other fields the probability fruits after the effort is much more than the market.

Alexander Elder, a famous trader said “ Trading is the most dangerous human endavour, short of war” Suitability of strategies and tacticts to situation: This is what Lord Krishna stood for from his own conduct by the manner in which he got Yudhistir to lie, the way Karna died. The fact is that there is no holy grail. Yet one comes across with sweeping statements. So we learn from one another while exploring issues as Krishnamurthy would say. Just as the market is the biggest guru, life and experiences themselves are biggest gurus more than any other individual.

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3 Responses

  1. i would not have guessed this had been remarkable a couple of years ago and yet its interesting how years adjusts the means by which you see a variety of creative concepts, thank you regarding the article it really is enjoyable to read anything sensible now and then instead of the general garbage mascarading as information sites on the web, i’m off to take up a smattering of hands of facebook poker, regards

  2. This article is very enlightening to me. It somehow changed my overall outlook about the stock market. My interest to try the market is more fueled.

  3. Thanks

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