In trading, as in life, obstacles are inevitable.
But what if those obstacles weren’t just hurdles to overcome but actually the path to success?
This idea, rooted in Stoic philosophy and popularized by Marcus Aurelius and the author Ryan Holiday, is summarized in the phrase, “The obstacle is the way.” When applied to trading, this philosophy transforms challenges into opportunities for growth, discipline, and mastery.
Let’s explore how embracing your trading obstacles and practicing introspection can make you a better trader.
I’m currently listening the the audiobook The Zen Trader and it has inspired this post. I have also read the book The Obstacle is the Way which has also inspired this post.
There is a classic tale often shared in philosophical and self-improvement contexts, and it’s prominently featured in The Obstacle Is the Way by Ryan Holiday which I want to share before we get started. It goes like this:
In ancient times, there was a king who placed a large boulder in the middle of a road. Then he hid nearby to see if anyone would make an effort to move it.
Many of the kingdom’s wealthiest and most important merchants and courtiers came by and simply walked around the boulder. Some even loudly blamed the king for not maintaining the roads.
But none of them made any effort to remove the obstacle.
Finally, a poor peasant came along, carrying a load of vegetables. When he reached the boulder, he put down his burden and tried to push the rock out of the way. It took a great deal of effort, but he eventually succeeded.
After moving the boulder, the peasant found a purse lying in the road where the boulder had been. The purse contained gold coins and a note from the king explaining that the gold was for the person who removed the boulder.
The lesson is simple but profound: Obstacles are not just challenges, they are opportunities. The “treasure” behind the obstacle—whether it’s literal or metaphorical—is only revealed to those willing to confront and overcome the difficulty. This ties directly to the book’s Stoic philosophy: Obstacles are not just to be avoided but embraced as the path to growth and success.
The Obstacle Is the Way in Trading
In trading, our weaknesses can often be our greatest teachers. Instead of avoiding or lamenting over the things we struggle with, the principle of “the obstacle is the way” suggests that these challenges hold the key to growth. By leaning into what’s difficult, we can build the skills, discipline, and mindset needed for success.
For example, I’ve identified my own obstacles:
- Impatience: I tend to rush into trades out of FOMO (fear of missing out), often abandoning my trading plan.
- Over-Allocation: I sometimes put too much capital into a single trade, driven by a desire for quick gains.
These tendencies have hurt my trading, but they’ve also revealed where I need to focus my efforts. By turning these weaknesses into strengths, I’ve been able to develop more patience, better risk management, and a greater sense of discipline.
Journaling and tracking my trades also helps a lot with this. This is something I plan to do more in our group on Skool, and I would recommend you join us and do the same. It’s a great way to stay accountable.
More About Marcus
Marcus Aurelius, the Stoic philosopher and Roman Emperor, wrote the idea that “the obstacle is the way” in his personal journal, which is now known as Meditations. This concept, central to Stoic philosophy, reflects the belief that challenges and adversities are not merely disruptions but essential parts of life that provide opportunities for growth, strength, and wisdom.
Here’s what Marcus Aurelius meant by this idea, and how it can be understood:
Challenges Are Opportunities for Growth
- Marcus believed that obstacles force us to develop qualities like patience, courage, resilience, and creativity. Without adversity, these traits would remain dormant.
- He wrote:“The impediment to action advances action. What stands in the way becomes the way.”
- This means that the very thing blocking your path becomes the catalyst for progress. The struggle itself is how you move forward.
Trading Application: Losing trades, market volatility, or missing out on opportunities are not just setbacks, they’re essential for learning and growth.
Example: A trader loses several trades in a row and feels disheartened. Instead of giving up, they review their trading journal to analyze mistakes. By confronting the obstacle, they refine their strategy and become more disciplined, which ultimately makes them a better trader.
Focus on What You Can Control
- Stoicism emphasizes distinguishing between what we can control (our thoughts, actions, and responses) and what we cannot (external events, other people’s actions, or fate).
- When faced with an obstacle, Marcus advised focusing on how we respond to it, rather than lamenting its existence:“You have power over your mind—not outside events. Realize this, and you will find strength.”
- This teaches that while we may not control the obstacle, we control how we interpret it and act upon it.
Trading Application: Traders can’t control the market, news events, or the outcome of individual trades, but they can control their preparation, risk management, and emotions. “It’s not what happens to you, but how you react to it, that matters” (Epictetus).
The Power of Introspection for Traders
If you don’t know what your “obstacles” are, you need to start trading to find out.
But you can also consider some introspection…
One of the most overlooked tools in a trader’s arsenal isn’t a technical indicator or a trading strategy—it’s introspection. Trading isn’t just a battle against the market; it’s a battle against yourself. To truly excel, you need to understand your own habits, emotions, and tendencies better than the market itself.
If you don’t believe this that’s fine. Sometimes the only way to actually have this sink in is to trade with real money and lose. Hopefully if you do this, you don’t lose it all and quit. For many people, they have to actually experience some loss to truly understand how important the mental side of trading is. You hear this time and time again from many books. Super successful traders at one point lost, or almost lost all their money. There are real lessons in losing money in the markets. If you need that lesson, hopefully you don’t lose it all, and hopefully you come back stronger.
What is Introspection?
Introspection is the practice of looking inward—analyzing your thoughts, emotions, and behaviors. It’s about asking, “Why do I react this way under pressure?” and uncovering patterns that may be sabotaging your performance.
Here are some questions to consider:
- Do I chase trades because of FOMO?
- Am I over-allocating capital, hoping for a big win?
- Do I panic and exit trades too early, even when they align with my plan?
By reflecting on your answers, you can start to address these tendencies and improve your trading approach.
Why Introspection Matters in Trading
- Identifying Weaknesses: Pinpoint recurring mistakes to prevent them from happening again.
- Understanding Emotional Triggers: Recognize what drives your decisions—fear, greed, frustration—and manage those emotions.
- Building Discipline: Self-awareness strengthens your ability to stick to a trading plan.
- Developing a Growth Mindset: Treat every mistake as a lesson and focus on continual improvement.
How I’m Turning Obstacles Into Strengths
The beauty of obstacles is that they reveal what we need to work on. Here’s how you can turn common trading challenges into strengths:
1. Cultivating Patience
- Strategy: Instead of chasing trades, remind yourself that opportunities are like buses—another one will come along.
- Mindset: Adopt a calm, calculated approach. The market rewards those who wait for the right setups.
2. Mastering Risk Management
- Tactic: Set strict rules for position sizing to avoid over-allocating capital.
- Philosophy: Acknowledge the gambler within and consciously work against the impulse to double your money quickly.
Practical Steps to Apply Introspection
- Journaling: Keep a detailed trading journal, noting not just the technical aspects but also your emotions and reasoning behind each trade.
- Post-Trade Reflection: After every session, spend 10 minutes reviewing what went well and where emotions interfered.
- Meditation or Quiet Time: Practice mindfulness to separate your emotions from your trading decisions.
- Feedback Loop: Regularly review your journal to refine your trading plan and address recurring issues.
Conclusion: Let Your Obstacles Illuminate Your Path
Your trading obstacles aren’t just hurdles to overcome—they’re the stepping stones to mastery. By embracing challenges with a Zen-like mindset and practicing introspection, you’ll not only improve your trading skills but also grow as a person.
In trading, the path to mastery lies in understanding and overcoming your own nature. The obstacle isn’t in your way—it is your way.
