On a regular trading day, all traders are glued to the stock market screen. Eyebrows are raised and pulse rates are staggered when the day’s candles dance sideways, spike, or dip as they please.

Some decide to stay on and ride the entire rally until the closing time to find a merciful candle that peaks. But on some humid afternoons, drooping shoulders walk out of the stock exchange, collecting shattered pieces of hope for the next day.

Therefore, enters the saving grace of a stop loss. A concept that sets traders on a journey of cutting their losses while they are still ahead.

A stop loss is a tool used during trading that allows a trader to limit potential losses in the market. It is an instruction given to a broker to buy or sell a stock once it reaches a certain price point. You can trigger an order if the price of the stock falls and reaches your stop price. At this point, your broker will execute the sell order to make sure to limit your losses should the market go against you.

While this stop-loss concept exists in the world of trading, can it also have more meaning in a leader’s life?

The Stop-Loss Gavel in a Leader’s Journey

Allow the stop-loss concept to permeate into a more transactional sentiment of your leadership journey.

As a leader with a high SiQ, one can easily determine the amount of time, energy, and effort to invest in something of value. For instance, a high SiQ leader would identify a situation like a failing business venture that has the potential to recover losses but not in the near future. So, he or she decides to take a step back and focus on other tasks and businesses until external factors favor that business again. Only then will the leader decide to invest their time, energy, and effort into that venture but much later in the future.

At any point, when you find that the returns are not favoring you, you can recognize the need for applying a stop loss and getting out.

But how do you figure out when to stay on and when to quit?

Professor Micky: “Excuse me? You let me down? I don’t care! Let me make one thing clear to you, I am not your father! You are not my friend. This is a business. You are only as good to me as the money you make, and right now, it’s not worth a hell of a lot! You’re going to give me back everything you lost.”

Ben: “No, I can’t do that. That money was for Harvard. I have made you so much more than what I lost!”

Professor Micky is a fictional character played in the movie 21. Ben was a mathematics major student who trained under Professor Micky. Professor Micky, however, led a double life which was why he trained Ben and a few other students from a university to gamble a certain way and make more money at casinos. Every day, Professor Micky’s team played and won huge sums of money.

Then a day had come when Ben suffered a loss because instead of playing by the rules made by Professor Micky, he started to get greedy. That’s when things started to go south, and Ben lost a huge sum of money. He lost thousands of dollars, which was when Professor Micky cut Ben out of the team.

Professor Micky: “It doesn’t matter, Ben. You had very clear instructions, and you didn’t follow them. You didn’t do your job. You weren’t counting, you were gambling!”

Ben: “Well, why aren’t you out there, Micky? I mean, we take all the risks. Seems to me like you don’t do anything.”

Professor Micky: “This isn’t about me. You arrogant little infant.”

As the movie progresses, Ben finds himself in a lot of trouble at the casino but in the process learns the significance of cutting one’s losses. It was a hard lesson but he had to learn it anyway.

Ben: “I had a 1590 on my SAT. I got a 44 on my MCATs. And I have a 4.0 GPA from MIT. I thought I had my life mapped out. But then I remembered what my nonlinear Equations professor once told me, ‘Always Account For Variable Change’.”

The Probability of Variable Change

Always consider that the transactions you make may go sideways. They are not likely to go as you want them to and won’t give you the returns you expected.

But a question always enters the mind of a seasoned trader, should I go on or stop trading for the day?

That is most definitely a question that synchronizes with what a leader must decide in every transaction.

Am I Willing to Invest Now or Not to Engage and Respond? This is what the question of WINNER means.

To ensure that you make the right decision to put a stop-loss, you have to ask yourself whether or not the investment is worth it. How do you determine that?

Think about the limited resources you have:

1.      Time

2.      Energy

3.      Effort

These three sources are limited and they are what define the route you need to take. Ask the WINNER question while considering your three limited resources.

· TIME is limited, which means we have less time that once spent cannot be recovered. Until then, time is limited, and therefore, we must respect its availability.

· ENERGY is a valuable force that is difficult to produce once lost. It represents the depth of thought, the decisions made and actions taken, and the energy invested in all actions. In this case, a step taken further cannot be undone.

·       Finally, EFFORT is that limited resource that cannot recharge once the output is done. Effort represents the hard work put into something to gain returns in the form of rewards, money, scores, etc. But effort too is lost sometimes on events that do not produce returns.

It’s understandable that these three finite resources are bound to get spent in ventures that may or may not be successful. This is why one cannot control the use of these sources but can navigate their output.

So, if the answer to your WINNER question suggests that you shouldn’t engage and respond in a certain situation or business, you stop. This is because you are spending massive amounts of Time, Energy, and Effort in something that isn’t giving you anything good or fruitful, rather gives you losses. Hence, you put a stop-loss to that specific transaction.

If the answer to your WINNER question suggests that you continue investing then you do so as the finite resources you spend are giving you great returns.

So, as a leader with a high Spiritual Quotient (SiQ), comprehending the WINNER question and identifying where to invest your time, energy, and effort, you can save as well as benefit from the Stop Loss.

It’s like a short quote made by Yvan Byeajee, a seasoned trader:

When the market hits your stop loss,

Set aside your ego,

And take a deep breath.

Acknowledge the loss, learn from it,

And move on to the next opportunity.