The Art Of War

[billyjoe]

I feel lost without a plan. Even if the plan doesn't work it's better than no plan. If you learn what doesn't work , it's still learning.

billyjoe

[Adam]

So it does come back down to the "plan". It always does. In trading, like war, without a strong disciplined plan the battle is lost before it starts. I think that is a strong part of what the book is trying to convey.

Without proper planning, any project, battle, war, buisness will fail to reach its full potential. The US wins wars with minimal casualties due to precise planning and execution. Plan and stick to it. I'd still be livin paycheck to paycheck if I didn't live by those rules.

[Runner]

A plan is only a plan if followed and allowed to prove a success or failure. Now in War we rehearse contingencies or the what if plans. 9 times out of 10 our war plans would not go as planned and we would resort to the what if scenarios.

Gosh I do see the correlations and applications of the things I learned in the military that parallels the markets!!

Remind me latter the show you the Infantry’s 5-paragraph operation order that we used to prep for battle. This was how we simply did things. It was always the simple plans that yield the best operation with minimal loss of life.

[Adam]

Remind me latter the show you the Infantry’s 5-paragraph operation order that we used to prep for battle. This was how we simply did things. It was always the simple plans that yield the best operation with minimal loss of life.

In my buisness we call that the spin. Back plans for when things go bad and all hell breaks loose. How to salvage it for the best. Immediately.



It's later, show me how its done.

[IIC]

RUNNER...Here's another reminder...Doug

[spikefader]

Cool thread!!

I just read through your quoted chapter 1, IIC, and I'll have a shot at drawing the comparisions to trading and Chapter One; Laying Plans:

1. The art of trading is vital to an individual.
2. Planning can lead to both success or failure, but neglecting to have a plan at all is certain ruin.
3 & 4. The 5 constants are logic (moral law), belief/faith (heaven), nature of the market (earth), trader (commander), and his/her discipline and method (method/discipline).
5 & 6. Logic (moral law) calls for conformity to the rule, regardless of emotion, fearless in the face of risk.
7. Belief/faith (heaven) in discipline no matter the hour or environmental variables.
8. Market (earth) comprises the trading/battle ground.
9. Trader (Commander) seeks/reflects market wisdom, independance and focus.
10. Method (discipline) is all about logistics and platform/execution control.
11. Whoever has familiarity with the 5 constants above will be victorious. Whoever does not will fail.
12. When seeking to assess your trade setup worthiness, ascertain the following:
13. 1) Where does logic (moral law) reside? 2) Do you have accountability? (i.e. what would a genuine professional (commander) think about your trade? 3) Where is the market edge? (earth), and how much faith/belief (heaven) do you have in it? 4) What is the best platform to execute your logistics (method). 5)&6) How much support/resistance is present? 7) Which side has the best risk/reward ratio?
14. Victory or defeat in battle with be forcasted by weighing the above seven considerations.
15. Traders who value that advice will succeed and are employable; traders who do not will blow up and be left to seek employment elsewhere.
16. Helpful circumstance like good FA to the TAer or TA to the FAer that supports a trade is to be availed upon.
17. Where logic favors system modification, do it.
18. Trading hinges on deception; buy during fear of buying, sell during greed.
19&20. For large volume traders: Hide in the volume of an issue. Do not make your buying obvious to the seller or else price will rise; do not make your selling obious to the buy or else price will drop. Execute in a fashion that deceives the smaller fish.
21. When your trade looks perfect, be prepared for disaster. When the market screams opposing strength, run like heck.
22 to 25. Not sure where they fit into trading .. yet.
26. Success and failure depends entirely on preparedness and time invested in both the trading system employed and the trading plan adopted. The more attention to the important details of the plan, the greater the liklihood of success.

Poetic license once again! lol

[IIC]

Heck...Spike is Sun Tzu...reincarnated

[IIC]

Today's Chapter

Chapter III. ATTACK BY STRATAGEM


1. Sun Tzu said: In the practical art of war, the best
thing of all is to take the enemy's country whole and intact;
to shatter and destroy it is not so good. So, too, it is
better to recapture an army entire than to destroy it,
to capture a regiment, a detachment or a company entire
than to destroy them.

2. Hence to fight and conquer in all your battles
is not supreme excellence; supreme excellence consists
in breaking the enemy's resistance without fighting.

3. Thus the highest form of generalship is to
balk the enemy's plans; the next best is to prevent
the junction of the enemy's forces; the next in
order is to attack the enemy's army in the field;
and the worst policy of all is to besiege walled cities.

4. The rule is, not to besiege walled cities if it
can possibly be avoided. The preparation of mantlets,
movable shelters, and various implements of war, will take
up three whole months; and the piling up of mounds over
against the walls will take three months more.

5. The general, unable to control his irritation,
will launch his men to the assault like swarming ants,
with the result that one-third of his men are slain,
while the town still remains untaken. Such are the disastrous
effects of a siege.

6. Therefore the skillful leader subdues the enemy's
troops without any fighting; he captures their cities
without laying siege to them; he overthrows their kingdom
without lengthy operations in the field.

7. With his forces intact he will dispute the mastery
of the Empire, and thus, without losing a man, his triumph
will be complete. This is the method of attacking by stratagem.

8. It is the rule in war, if our forces are ten
to the enemy's one, to surround him; if five to one,
to attack him; if twice as numerous, to divide our army
into two.

9. If equally matched, we can offer battle;
if slightly inferior in numbers, we can avoid the enemy;
if quite unequal in every way, we can flee from him.

10. Hence, though an obstinate fight may be made
by a small force, in the end it must be captured
by the larger force.

11. Now the general is the bulwark of the State;
if the bulwark is complete at all points; the State will
be strong; if the bulwark is defective, the State will
be weak.

12. There are three ways in which a ruler can bring
misfortune upon his army:--

13. (1) By commanding the army to advance or to retreat,
being ignorant of the fact that it cannot obey.
This is called hobbling the army.

14. (2) By attempting to govern an army in the
same way as he administers a kingdom, being ignorant
of the conditions which obtain in an army. This causes
restlessness in the soldier's minds.

15. (3) By employing the officers of his army
without discrimination, through ignorance of the
military principle of adaptation to circumstances.
This shakes the confidence of the soldiers.

16. But when the army is restless and distrustful,
trouble is sure to come from the other feudal princes.
This is simply bringing anarchy into the army, and flinging
victory away.

17. Thus we may know that there are five essentials
for victory:
(1) He will win who knows when to fight and when
not to fight.
(2) He will win who knows how to handle both superior
and inferior forces.
(3) He will win whose army is animated by the same
spirit throughout all its ranks.
(4) He will win who, prepared himself, waits to take
the enemy unprepared.
(5) He will win who has military capacity and is
not interfered with by the sovereign.

18. Hence the saying: If you know the enemy
and know yourself, you need not fear the result of a
hundred battles. If you know yourself but not the enemy,
for every victory gained you will also suffer a defeat.
If you know neither the enemy nor yourself, you will
succumb in every battle.

[skiracer]

Doug,
You're gonna make me go out and buy this book to read it through. The most insightful statement is the very last sentence, "if you know neither the enemy nor yourself, you will succumb in every battle". So true in life also.

[IIC]

Doug,
You're gonna make me go out and buy this book to read it through. The most insightful statement is the very last sentence, "if you know neither the enemy nor yourself, you will succumb in every battle". So true in life also.

I agree...that whole Paragraph 18 is applicable to everything...But what happens if you know your enemy but not youself?...Doug

[skiracer]

I agree...that whole Paragraph 18 is applicable to everything...But what happens if you know your enemy but not youself?...Doug

The most significant part is knowing yourself. If not your dead and will never win any battle.

[IIC]

The most significant part is knowing yourself. If not your dead and will never win any battle.

Yes...I was sorta kidding when I said that...IIC

[billyjoe]

Here's my Translation of General Sun Tzu. If it's wrong , my knowledge of Chinese isn't very good.

1. Shorting is a no no
2. Get a dividend if possible
3. Don't get screwed over by the CEO
4. Leverage your profits
5. Don't get too greedy
6. Buy out your competitors if possible
7. Set stops so you've got money left to invest
8. Diversify
9. If you can't find enough info. on a stock , don't buy it
10.Big money will always have an advantage over you
11. A bad CEO can ruin your stock
13. Don't buy stock with money you don't have
14. Stocks can't be budgeted like your household expenses
15. Stocks won't make you money just because you want them to
16. If you continue to hold bad stocks, eventually it will drag your portfolio down
17. a. Don't buy if the market looks bad
----b. If you can make money on both good and bad stocks, you've got it made
----c. Don't get discouraged and stop researching
----d. Find a good stock that nobody else seems to notice
----e. Don't let so-called experts pick stocks for you
18. Learn enough so that your decisions are based on facts , not emotions

billyjoe

[skiracer]

Yes...I was sorta kidding when I said that...IIC

Doug,
I was dead serious. Would you please put an asterik or something next to them or something when you're kidding so I know. The truth of the matter is that there are plenty of people running around that really don't know or understand themselves or their parameters. No kidding now. Wouldn't you agree to that?

[skiracer]

Here's my Translation of General Sun Tzu. If it's wrong , my knowledge of Chinese isn't very good.

1. Shorting is a no no
2. Get a dividend if possible
3. Don't get screwed over by the CEO
4. Leverage your profits
5. Don't get too greedy
6. Buy out your competitors if possible
7. Set stops so you've got money left to invest
8. Diversify
9. If you can't find enough info. on a stock , don't buy it
10.Big money will always have an advantage over you
11. A bad CEO can ruin your stock
13. Don't buy stock with money you don't have
14. Stocks can't be budgeted like your household expenses
15. Stocks won't make you money just because you want them to
16. If you continue to hold bad stocks, eventually it will drag your portfolio down
17. a. Don't buy if the market looks bad
----b. If you can make money on both good and bad stocks, you've got it made
----c. Don't get discouraged and stop researching
----d. Find a good stock that nobody else seems to notice
----e. Don't let so-called experts pick stocks for you
18. Learn enough so that your decisions are based on facts , not emotions

billyjoe

Billyjoe,
Decent list. If you had to list them numerically in order of importance in what order would you list them.