Whenever my gran heard bad news she used to say, “it will be to the good”. She was the most positive person I knew, albeit in complete denial to her personal situation; but she had faith – strong faith.
I have spent the last few days really thinking about this idea and discovered that there are different levels to how we respond to bad news.
The more classic approach is the one that I was brought up with. There is a God running the world and that we are put on earth to be tested, that each test (good or bad) is designed for us to become a better version of ourselves. If this is your belief system then when something bad happens to you, your inner voice will say that everything happens for a reason and while I don’t know what the reason is for this event to happen to me I accept that in the fullness of time it will become clearer to me that there was good that came from it. This is a wonderful way to live ones life as it provides one with a sense of purpose for those difficult moments we all experience at some time in our life.
However, there is a deeper way to approach receiving bad news. If you truly believe you are put on this earth for a purpose then bad news is never bad news, all news is part of the master plan and therefore one doesn’t need to say that eventually the news will lead to some positive outcome. Rather one can convert the thought and change the reality of the bad news to news that is good for you as it is taking you further down the path of your life. I have spent days thinking about this seemingly ridiculous concept and the more I think about it the more I realise how ideal an approach to life this is.
Let me try and provide a traders slant to this style of thinking.
George was long Bitcoin on Friday and had a stop loss set 5% below the opening price of the day. George was trading with leverage of 20×1 and had put all his account equity of $10,000 into the trade. So George had a long Bitcoin position of $200,000 supported by his $10,000 of equity. As happens quite frequently with Bitcoin the price dropped sharply hitting the stop loss of 5% thus wiping out all Georges account equity.
The one approach is to say damn, damn, damn that was silly of me I am sure there is a lesson in this blow-up for me, perhaps I will learn to be more responsible around money and less arrogant about my views of Bitcoin in the future. I don’t understand right now how but I am sure I will become a better person through this experience. George may become a very successful trader with millions under management and be able to pinpoint his success based on the hard lesson he learned blowing up his account with that Bitcoin trade. In other words he believes there will be a lesson he just cannot see it at the moment it happened.
Then there is a deeper approach. George could say wow, I am so proud of myself for placing a 5% stop loss. I managed to only blow-up my account. If I hadn’t put in a stop loss where I put it I would have blown up the account and owed the broker $10,000 because Bitcoin actually dropped 10%. This approach is not looking for signs. This approach is positive from the outset it sees the good in the message immediately.
There is a danger in the deeper approach. One can become blind to messages of how to improve oneself and ones situation because one is so quick to believe that it was meant to be that way. The deeper approach runs the risk of falling into a dogma of a strong form determinism. One where free will is drowned out by the Newtonian forces of cause and effect.
In summary what I am suggesting is that it is great to strive towards an attitude that sees the message immediately, not having to rely on a derivative process that will eventually provide meaning in the full context of time. However, just because something happens doesn’t mean you cannot or could not improve the outcome, that your free will is powerless to determinism. Always be open to change and the power of your decisions.