Content of the material
- Lesson 1
- Art of War Lesson 3: Be Aware of Your Weaknesses and Strengths
- In trading:
- 1. Knowledge Is Power
- Knowledge of Your Competition
- 3. Create A Solid Yet Flexible Plan
- In trading:
- Lesson #2: The supreme art of war is to subdue the enemy without fighting
- Lesson #5: It is more important to out-think your enemy than to outfight him
- Like what you just read? Read the rest of the world’s best summary of “The Art of War” at Shortform. Learn the book’s critical concepts in 20 minutes or less.
- These tips can be applied to anything – from playing strategy games on computers to judo fighting.
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“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.”Sun Tzu
This is my favorite quote from Sun Tzu. It holds wisdom that can be applied to all walks of life, not just combat and warfare.
I like to substitute the word “enemy” with “markets” when reading The Art of War. So I read this quote as saying:
If you know the markets, and you know yourself, you need not fear the result of a hundred trades.
But if you don’t know the markets, then it doesn’t matter how good your trading psychology is. You can’t have an edge if you don’t know the markets, and if you have no edge, then knowing yourself is not going to help your trading results.
Therefore it is important to have a firm grasp on both yourself and the markets if you wish to achieve greatness as a trader.
Art of War Lesson 3: Be Aware of Your Weaknesses and Strengths
The greatest leaders are those who are aware of both their strengths and weaknesses. They know how to compensate for areas where they struggle by developing them and leaning on the areas where they feel the strongest and most competent.
For example, if you want to be a great leader, follow in the footsteps of leaders you admire and regularly self-assess your leadership capabilities.
The Art of War states: “He will win who, prepared himself, waits to take the enemy unprepared.” Modern leaders can interpret to mean that by knowing ourselves we can better identify the areas that hold us, and our organizations, back from true success.
Making your trading decisions in the heat of the moment is generally a bad idea. You must know your levels in advance and reserve the trading session for execution only. Unpreparedness will almost always leave you in a weak position.
1. Knowledge Is Power
Know the enemy and know yourself, and you can fight a hundred battles with no danger of defeat. If ignorant both of your enemy and yourself, you are sure to be defeated in every battle.
This is one of the most important lessons we have learned from The Art Of War. Let’s look at how business strategy resembles military strategy, in this thought.
The above quotation by Sun Tzu highlights the importance of two things:
- Knowledge of your competition
This means that an accurate self-perception is the golden key to success. Also, knowing who you are fighting against, goes hand in hand with it. Let’s look at each point in further detail.
Sun Tzu says that it’s important to accurately understand our real strengths and weaknesses. If we can do that, we will be able to become more effective in business. In essence, the more we know about the reasons for our preferences and actions, the better we will understand others.
You see, every decision you make reveals something about yourself. This process of self-analysis will help you identify your strengths and weaknesses.
You know that for success, you have to work on improving your weaknesses. But at the same time, you have to focus on your strengths by taking them to the next level. If you are at a certain level of skill, upgrading it is something to strive for.
Hence, it is important to keep the constant pursuit of self-improvement going. In fact, this pursuit is one of the most powerful habits of self-made millionaires. If you are someone who wants to build upon your success, you should always look to grow your skills.
Have you noticed the behavior of a child? They learn about the world by being curious about every little thing around them. But, as we grow older, this natural curiosity fades. We become rigid in our thinking. Keeping your childlike curiosity, alive, at all times, will go a long way in helping you succeed.
Here are two powerful ways for self-development:
- Reading books: The focus should be on self-improvement books, biographies, and books about successful people. This will give you the opportunity to learn and expand your horizons.
- Finding a mentor: Speaking from our own experience, if you can find the right person to guide you, your life will change. You see, almost all successful business owners have had mentors. In fact, 93% of them claim their mentors were responsible for their wealth.
Knowledge of Your Competition
When you know yourself but not the enemy, your chances of winning and losing are equal.
Sun Tzu says our chances of winning are reduced by half if we do not know our enemy. Let’s look at how business strategy resembles military strategy, in this case.
What this means is that in order to succeed, you have to know what your competition is doing. Also, you should be aware of your competitor’s strengths and weaknesses. Why is that important?
Well, so you can strategically apply that information to benefit your business. Now, the application of that knowledge could mean taking a step back. It could also mean moving forward.
You see, learning what your competitors are doing can give you valuable insights into your plans. If you can predict your opponent’s action, you have the possibility of generating a mismatch that works in your favor.
So, it is important to learn to spot loopholes and weaknesses in your business environment. This singular factor can be a big competitive advantage for you.
3. Create A Solid Yet Flexible Plan
The commander who gets many scores during the calculations in the temple before the war will have more likelihood of winning.
Sun Tzu says a leader with a better plan, wins the war. So, let’s look at how business strategy resembles military strategy, in this thought.
We know planning is integral to success in business. But it is important to remember that no single plan works well for everyone and everywhere. Moreover, there are several factors that can influence the success or failure of a plan.
So first, you have to create a solid plan of action. A plan that will get you started. However, in business, there will always be situations where you may have to change your plans.
So you have to be ready and willing to adapt it according to changing needs. You have to consider all the alternatives available. Hence, your plan must be flexible and adaptable to circumstances.Planning is a process of understanding what is happening in constantly changing situations and adapting with energy and determination. Click To Tweet
You see, your plan can either be like a tree or a pole. If you want it to bear fruit like a tree, it needs to have branches. But, if your plans are too rigid, you will not be able to adjust to circumstances and fail.
It doesn’t mean that your plan has to be complicated. A simple plan is easier to turn into action.
So, here’s what we suggest:
- Set a clearly defined goal and give yourself a schedule to achieve it.
- Start working towards your goal. Every plan needs to be followed by action.
- Every step is a teacher. If you succeed, take it to the next level. If not, then be willing to adapt and learn.
Don‘t be desperate to trade. You can’t be a trader if you’re desperate and impatient. You must let the market come to you. Patience is not just a virtue, it’s gold! Sometimes you can accomplish the most by doing nothing and just waiting. You’ll save an enormous amount of time and energy.
If you let your emotions rule your trading, this will put you at a big disadvantage.
Lesson #2: The supreme art of war is to subdue the enemy without fighting
One of the most relevant Art of War lessons today is the nonviolent approach. The best time to strike an enemy is when they are involved in preparations. Strike before the enemy is fully mobilized, and they will be unable to fight back. This may prevent a battle. This strategy involves using intelligence, rather than brawn, to win.
If intelligent strategies don’t work, the next strategy is to win through intimidation.
- Form alliances to increase your strength to a point where fighting would be ill-advised for your opponent.
- Form alliances with the enemy’s allies to disrupt the enemy’s power.
Ultimate victory is when battle has been thwarted through intelligence or intimidation, there has been no destruction, no cities have been seized, and no blood has been shed. Framing bloodless wars as the ultimate victory makes this one of the most significant Art of War lessons.
Lesson #5: It is more important to out-think your enemy than to outfight him
This Art of War lesson says that brains are more important than brawn. The strategy of your troops must be malleable based on circumstances. If you try to control the troops only after conflict has begun, you will be thwarted or outmaneuvered.
If you know your strengths and abilities and measure them as effective against your opponent, you can enter conflict prepared for anything. If you only know your strength and not your opponent’s, you will enter conflict blindly.
- When you understand the essence of your enemy, you will know how to approach battle against them.
- When you understand your essence, you will know where you are vulnerable and how to mitigate impact.
Strike before the enemy is fully mobilized, and they will be unable to fight back. This may prevent a battle. This strategy involves using intelligence, rather than brawn, to win. These Art of War lessons are as important off the battlefield as on.5 Art of War Lessons for Real Life (Sun Tzu)
Like what you just read? Read the rest of the world’s best summary of “The Art of War” at Shortform. Learn the book’s critical concepts in 20 minutes or less Here’s what you’ll find in our full The Art of War summary:How to mislead your enemies to win the warClassic examples from Chinese history to illustrate Sun Tzu’s strategiesHow to use spies to gather information and defeat your opponents Get the world’s best book summaries now