13 principles of Benjamin Franklin in Trading

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This week is rather a hectic week for me as I would be traveling till the weekend. Usually I do not trade much or at all when I travel as I rather not trade via my cell phone. As I was hiking up the hill where I stay, my mind was in a constant reflection of the teachings of Benjamin Franklin. It is not everyday you see a person venerated for years throughout the world. His principles of life not only helped him but countless others is shaping their lives for the better. Here is memory of one of the greatest person ever lived, I attempt to write about his principles and applying it as a trader.

Principle 1- Enthusiasm
The very essence of getting things done, done well and done continuously is enthusiasm. Mostly we are attracted to new things. That excitement gradually diminishes after some time. I have seen countless traders started with boundless excitement. All that they could talk was trades. What trades they took, the trades they won, the trades they missed and the trades which they lost. However over a short period of time, the conversation gradually stopped especially if that particular trader lost their capital in the process.

This is where you need enthusiasm to kick in and take over excitement. Many asked me how I became a full time trader. My answer was always enthusiasm. Make a high and holy resolve that you will double the amount of enthusiasm that you have been putting into your work and into your life. If you carry that resolve and apply this ingredient to every one of the 13 principles during the next 13 weeks, be prepared to see astonishing results.

Principle 2- Self Organization
If you want to know whether you are going to be a success in your trading, the test is simple. Just ask yourself “can I organize and control my time?” If not, drop out as for sure you would fail. You may think not, however you will fail as sure as you live. I will write here what Benjamin Franklin wrote, “if you want to enjoy one of the greatest luxuries in life, the luxury of having enough time – time for family, time to play, time to rest, time to think things through, time to get things done, there is only one way. That is to take enough time to think and plan your trades in order of their importance. Your trading profitability will see significant improvement and so does your account. That profitability would buy time for you eventually.

Principle 3- Others
Applied to all markets: find out what the other person (in this case the other person refers to the market makers) wants, then find the best way to get or follow it. Till today I have never seen any successful trader going against the market. It’s a detrimental practice especially if your aim is to achieve long term consistent profitability.

Principle 4- Questions
Franklin says it’s good to imitate Socrates. Questions, rather than positive assertions are the most effective way to find out what market want or is looking at. One of the important things one should do to train one’s mind is to have a questioning attitude, a habit of demanding and weighing evidence, a total scientific approach to trading the market.

Principle 5- Listen
Listen to the price rather than to all the noise surrounding the market. A magic 3 point formula
1) Find out what the market is interested in.
2) Find out all the views of various parties involved.
3) Listen to the price.

Principle 6- Resolution
Resolution, once it becomes habitual will keep you firm in your endeavours to obtain all the subsequent principles. We either discipline our self or we get discipline by the market.

Principle 7- Frugality
If you want to be free, think of saving as well as getting. Only spend within your means and lead simple life enriched with nothing but happiness and joy. Pay yourself first!

Principle 8- Sincerity
Be sincere in your trading. Do not expect more for what you did not create the cause for. Also when you share knowledge, be sincere in your progress. If not it would be a case of blind leading the blind.

Principle 9- Praise
Speak evil if no men and speak all the good I know of everybody. This attitude would see you attracting a lot of help from people who would eventually guide you in your journey to be a full time trader. Praise but do not flatter. Honest praise and encouragement make stars out of ordinary traders.

Principle 10- Health
Exercise frequently and do lots of stretching. Only a healthy body can one think and execute quality trades. Go for a full body check up and do what’s necessary to maintain optimum health.

Principle 11- Happiness
The most common prayer: Buddha/Lord please help me!
The most uncommon prayer: Thank you Buddha/Lord
Be happy and contended with that you already have. Be happy that you are in a position or soon to be in a position to not only make yourself happy but also spread happiness with others.

Principle 12- Humility
I have to admit, most traders are egoistic in nature. Just switch on Bloomberg or CNBC and you would see how some traders brag about being the first one to call the top or the bottom. Again we have to ask how consistent that person in calling them is. In my early years I was somewhat enamoured by these traders but as reality check in with a busted account following their advice calling the tops and bottom, I began to believe it only when market tells me it is. Before it hits rock bottom I am also out. By this way of following the market maker, I found out that my accuracy sky rocketed. Thus I recommend others to do the same.

Principle 13-Faith
My trading experience mimicked a roller coaster in the early. I lost quite a hefty sum. Luckily for me I had faith as I read about traders that had made it and since they have done it means it is not something impossible for others to do so. It took me 8 years to finally make it right. This year is my 12th year in trading and I can guarantee, without faith no way I could have made it.

Spend time learning this 13 principles and soon you would see how it help me and thousands of others.

To your success.

Justin