I want to reiterate a story trader Jeff Clark put out some time back.
“Do not look back“.
That was the advice the angels gave Lot and his family as they led them out of the city of Sodom. Just before it was destroyed by the wrath of God. In the Bible, the Book of Genesis chapter 19 describes this story and how Lot’s wife became a pillar of salt after she looked back at Sodom. Even Jesus talks about her in the New Testament book of Luke, chapter 17. Her name is not mentioned in the Bible, but Jewish writings say she was called “Ado” or “Edith “. Islamic accounts also talk about the wife of Prophet Lut (Lot). What happened to the city after he fled was no longer Lot’s concern. He couldn’t do anything about it.
So “Do not look back“ was the angel’s way of saying: “Look forward. There’s nothing to gain from watching what happens behind you. Focus on your future and what is ahead of you“. As the scriptures tell us, lot’s wife was not all that good at following directions. She couldn’t resist the temptation to look back and see what happened to the city she had just left. And she turned into a pillar of salt.
Why salt? Who knows?
Maybe it’s because a pillar of salt is fragile, yet immovable. Whatever. The bottom line is Lot’s wife shouldn’t have looked back, and neither should traders. Once you have exited a position, either for a profit or a loss, it doesn’t matter what happens to that anymore. There’s nothing to gain from looking back at it. It is like looking back in a race. Precious time is lost in your momentum and the opponents take advantage of you. How many times have we watched this on TV? There’s nothing to gain from looking back. Focus on the future and opportunities are in front of you.
If you look back, you run the same risks as Lot’s wife. Not that you will turn into a pillar of salt. But that you’ll be rendered fragile and immovable.
If you’ve taken profit on a trade
And chose to look back at it, two things can happen. The position will reverse, and you will think you are a genius. You will expect to do that consistently in the future. This will lead to overconfidence and a false sense of security. You will think you can get out of town before the market gets you. This is a dangerous thought process. Secondly, the position could have gone on to make bigger profits. You will have sold too early. Though you took a good profit on the trade, you feel bad because you left too much on the table. This leads to procrastination, and you will question every future trade. You are more inclined to hang longer, and you may not be able to get out of town in time. Therefore, traders have nothing to gain by looking back at trades that they have exited. Looking back will only paralyze you, like a pillar of salt on future trades.
You will never consistently buy at the lows and sell at the highs
So avoid the temptation to look back at the trades you’ve exited. Be happy with your decision to get out of town. Focus on the future and don’t look back. Lot and his family left Sodom and prospered in the neighboring town of Zoar. Lot’s wife looked back and turned into a pillar of salt.
I believe the pillar is located near the Dead Sea at Mount Sodom in Israel.
Author: ©Abraham George, CEO, Founder at AllSeasonsPTL Capital Management Ltd
