Sun Tzu's Art of War Ch. 2: Waging War in the Stock Market

阅读中文版 (with Audio)

The cost of being in a trade, time stops, and cutting losses quickly.

Sun Tzu's Art of War Chapter 2: Waging War

"There is no instance of a country having benefited from prolonged warfare." — Sun Tzu

The Military Context

In Chapter 2, Sun Tzu shifts from strategic planning to the brutal economics of war. War is a massive drain on resources. Even if you are victorious in every battle, a protracted war will drain your treasury and break the spirit of your troops. Therefore, speed is the most important element of warfare.

The Wall Street Translation

Trading is a war of attrition on your capital and mental energy. Holding onto losing trades ("bagholding") or sitting in dead money ties up your resources, racks up margin interest, and drains your psychological capital. You must cut your losses quickly.

Actionable Trading Rules

  1. Use Time Stops: Do not let a failed short-term trade turn into a long-term investment.
  2. Avoid Margin Bleed: Prolonged warfare using leverage will destroy your account through interest and decay.
  3. Play with House Money: Lock in partial profits and let the rest ride risk-free.