A helpful thought for the weekend. Sometimes the roots of words in history can give insight into their true meaning. They tell us how we should think of them.
Markets are about mercy, trading is about consistency
The word market comes from an Italian/Latin root, merx, which came to mean goods for sale, but really means a fair exchange. It has the same root as our word “mercy,” and the French for thanks, merci.
It means returning value for value. Fans of Shakespeare’s “The Merchant of Venice” will notice that he plays with these meanings when the judge famously tells Shylock, “the quality of mercy is not strained/it droppeth as the gentle rain.” She does this just before delivering the most unmerciful verdict against him.
What lesson can we draw from merx, mercy, merci, market, and merchant? That a free market works best when real value is returned for real value. And when all parties are merciful in their dealings, instead of the moral hazard that has become business as usual on Wall Street.
Finally, for individual traders, the idea that you trade best in an attitude of gratitude, when you approach the market with a feeling of abundance, saying merci, thank you, for the capital and ability you have, instead of a feeling of scarcity.
Trading is having a sure path
One root word for trading is tradere, a Latin word for “handing over/down” that is the root of “tradition.” So trading is handing things over to each other.
But another root is more helpful to traders. It’s the same root as “tread,” and it means a path, a consistent and steady way of going. “Trade winds,” for example, had nothing to do with trading ships. They were winds that blew in the same direction with the same strength, year after year. So sailors could count on them.
Traders need a path they can count on. They need what Wallace Wattles, in The Science of Getting Rich, called “a Certain Way.” And mainly we need to trust ourselves.
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We need to know that, trade after trade, we will consistently honor our stops and levels and targets. We will find a method that works and then work that method without fail. In that critical moment when the market is against you, do you have a consistent way of getting yourself to do the right thing?
If you do, a steady wind will always be at your back.