Our spiritual belief gives us a positive way of life and mythological epics teaches us several aspects of life either social and surprisingly related to our financial plannings. On the same way Lord Shri Krishna’s teaching and stories have inspired us in every walk of life. So on this month of August when most of us celebrated auspicious festival of Janmashtami, let’s go through one of the stories and learn important lesson which is very important in trading.
In the Mahabharata, Shishupala’s mother persuaded her nephew, Krishna that he would pardon his cousin Shishupala for a hundred offences. The prince of Vidarbha, Rukmini was very close to Shishupala. He wanted his sister Rukmini to marry Shishupala. However, Rukmini was gartered away by Krishna based on her own will before the commencement of the ceremony.. This ignited a fire of hate in Shishupala against Krishna.
When Yudhishthira undertook the Rajasuya Yajna, he told Bhima to obtain the fealty of Shishupala, now king after his father’s death. Shishupala accepted Yudhishthira’s supremacy with no protest also was invited to the final ceremony at Indraprastha. At that event, the Pandavas decided that Krishna would be the special honoured guest of the sacrificial ceremony. This made Shishupala angry and he started insulting Krishna, calling him a mere cowherd and worthless to be honoured as a king. Through this act, he committed his 100th sin and was forgived by Krishna. When he insulted Krishna again, he had committed his 101st sin. Krishna then released his Sudarshana Chakra on Shishupala, killing him. Shishupala’s soul was liberated, attained salvation by merging into Krishna’s body.
Moral: It was a virtue for Shishupala that he was forgiven for 100 sins. If he had used his virtue wisely, he would have extended his life. But immaturely, he had wasted his virtue and shortened his life. Another way round, we can say that he was having capital of 100 sins. Inappropriate use of capital ended his inning.
Isn’t this case with all of us as Trader? Are we coming in market with infinite capital? No. We have entered the market with some finite amount of capital. As Shishupala was having capital of 100 sins so as trader we have our capital which is finite in nature. Now, it all depends on us, how wisely we are using our capital. Based on that our survival in the market will be decided.
In the market, there is one guaranteed element which is volatility. Due to the volatile nature of market, every trade has a probable outcome. Trade can move in our favour or against us. With help of tools, techniques and experience we can enhance probability in our favour but cannot iron out risk completely. So for every trade, we have to assume some risk and accordingly, we have to use our capital. To safe guard against the risk, we have to abide by Stop Loss.
STOP-LOSS, a term generally considered as negative, surprisingly has a positive impression in course of the trading career. Stop Loss is not a loss that we are booking but it’s a trading business cost. Another way around, we can say “Stop Loss = Save Capital”. Because it saves further erosion of capital.
So let’s learn from the mistake of Shishupala and use our capital wisely.
(Article by- Kapil Shah, Trainer at FinLearn Academy)