The Emperor’s Three Questions & Answers for Traders !!!

Tolstoy’s story “The Emperor’s Three Questions” poses three questions:

1. What is the best time to do each thing?

2. Who are the most important people to be with?

3. What is the most significant thing to do at all times?

In the story, the Emperor traveled far and wide in his Kingdom to find the answers. One day, he came upon a hermit who lived in a small hut atop a high hill. When asked these questions, the humble hermit replied:

1. The most important time is now, because that is the only time over which you have power and control.

2. The most important person is the one you are with right now because you never know if you will be with that person again.

3. The most significant thing to do at all times is be happy and share that happiness with the person you are with.

The trading lessons are simple—but not so easy:

1. Be with the trade you are in at the moment. Stop trying to control anything but your own trade. The markets are going to do exactly what they want to and when they want to. YOU have the power to control what YOU feel, think, believe and do.

2. All that matters for you is the trade you are in. You may never see that trade again. Savor it, cherish it and be with it for as long as it lasts.

3. Celebrate your victories with yourself. Celebrate the trade and with the trade. The instruction is to refrain from boasting or grandiose behavior when you make a winning trade. The markets will humble you, and pride always comes before a fall. Napoleon said that the most dangerous moments come with victory. Decry and avoid hubris.

Also celebrate your defeats with yourself and the trade because they are mistakes. Mistakes are our greatest teachers because it is through them that we learn. What do we learn? Not to make them again!

Constantly strive to look inward, to know yourself, to raise yourself to the highest level of authenticity. Be rigorously honest about who you are.

Taking personal responsibility for your thoughts, feelings and actions is the first step to true inner peace—both in trading and in life. Never forget the ten most important words you can ever and always ask yourself:

Am I doing the best I can do right now?

The ultimate victory in competition is derived from the inner satisfaction of knowing that you have done your best and that you have gotten the most out of what you had to give…Howard Cosell

Jim Rogers: Here’s The Most Important Thing On What Investors Should Do !!!

I would say one lesson we all need to learn is that after you’ve had a great success, you really should be very worried. Let’s say you sell and say you’ve made 10 times on your money. You should be extremely worried. You should close the curtains, not read, look at the TV, or anything because that’s when you’re full of hubris, arrogance, confidence. You think, “God, this is something easy,” and you’re desperate to jump around to something new. You should do your very best to avoid making another play until you’ve calmed down a lot. Just wait. It’s a very dangerous time for any investor.

Likewise, if you take a huge loss and there’s a big panic and things are dumped on your head because you’re overextended or wrong for whatever reason, calm down, don’t say, “I’m never gonna invest in stocks again or commodities or whatever.” That’s the time you really should be willing to invest again if you can gather together some capital money. The investments can be terribly emotional. You have to figure out a way to control your emotions and deal with your emotions if you’re going to survive in these markets.

My advice is that, most of the time, most investors should do nothing. They should look out the window or go to the beach. You should wait until you see money lying in the corner and all you have to do is go over and pick it up. That’s how most investors should invest. The problem is we all think we need to jump around all the time and be jumping in and out and that’s not good.

We think we have to have investments. No, we don’t. If I said you could only have 25 investments in your whole lifetime or if there was some way to limit you to 25, you would be extremely careful. You wouldn’t be jumping around doing all sorts of strange things. Patience is what most investors need to learn. You don’t have to be doing things all the time. Most of the time the best thing is to do nothing. You just sit with what you have as an investment and let it ride or sit and wait until you see someone sitting in the corner.

Most of the time – unless you’re a short-term trader and great at it. I’ve known some spectacular short-term traders. But for most investors, unless you’re one of those guys, then you should just do nothing. Do nothing. If you’re an investor, do nothing except re-examine what you have, and if you’re not investing, just continue to look until you find something.

Jim Rogers, via Stockhouse