How can I smile when existence itself is dukkha?

"Suffering" isn't someone sticking pins under your fingernails all day, it is simply the fact that life will never be exactly what you want it to be. You will never be as rich as you want , as as popular as you want, etc. If they are smiling then it just means they have accepted their life for what it is, which is no great hardship. Once you have accepted that, you are halfway there.

Good observed, good householder, good observed,

...the greedy...

...the nasty...

...the ignorant...

...the "leaving home" one..

Why is there laughter? Why is there joy although (the world) is always burning? Shrouded in darkness why not seek the light? Story to Dhp 146

it's actually total improper, a sign of laking any seriousness and let it be assumed that not even path is reached, faith in the good teaching got firm.

Extrem discouraging are the smilings while receiving the going forth, followed by smiles on alms-round or when receiving gifts...

It destroys ways to foster and nurish faith for many and being the case, the Buddha also declared a conduct rule of which is broken if one smiles to an extend showing teeth. Actually monks aren't really allowed to laugh or smile to an extent which is improper for "one fearing the world" (Bhikkhu).

In regard of making people laugh at "Dhamma"-talk occasions, often joining the joy, good monks usually tell them "into hell leader"-teacher.

Possible good to know that laughing, certain smiling, is a sign of strong lobha, greed.

Laughing, based on what ever lose of others, meaning that it's an expression lifting oneself over others, is very akusala and there are seldom other cases where laughing and smiling wouldn't involve harm of others (individuals, groups...), even if just there prestige. It requires for the most a lot of pride to get even on the bodily surface.

But as it is, smile/sex sells, and less would be so attentive and concerning to discriminate such appearence proper. Smiles attract and are "low" means for common socialization for the sake of sense-pleasure and becoming.

As for: "How can I smile when I know existence itself is dukkha ?"

If "laughing" about your previous foolishness and at the point when path for the ending of Dukkha has been reached.

There is of course such as renouncing-smile, effected by contentment, right release, a smile which does not take, even not take part, serene.

Why is there laughter? Why is there joy although (the world) is always burning? Shrouded in darkness why not seek the light? Story to Dhp 146

An extended answer as well as given place for discussion can be found her: Q&A How can one (even a monk) smile when existence itself is dukkha?

(Note that this isn't given for trade, exchange, stacks and what ever binds in this wheel but for liberation from it)

If it is the case, that Bhk. Thanissaro states: "The phrase "Life is suffering" is supposed to be a summary of the Buddha’s first noble truth, but the first noble truth simply lists the things in life that constitute suffering" (bold/italics mine) this is a misunderstanding of the statement (http://buddhadust.net/backmatter/indexes/sutta/dn/idx_digha_nikaya.htm#p22 §4, definition of dukkha) saɱkhittena pañc'upādāna-k-khandhā dukkhā "Essentially the Five Fueled Stockpiles are pain."

"The Fueled Stockpiles" is a name for everything in existence. It is the equivalent of The All. The equivalent of "The World". Or: "Life" (bhava). And we also have this stated indirectly in the Paṭicca Samuppada where bhava is one causally associated factor upon which dukkha depends and which is to be eliminated ... not made dukkha-free. We are not trying to change the nature of life or the world, we are trying to escape it.

To say the Buddha does not say that life is pain is misleading and appears to be some sort of attempt at softening of the teaching for the sake of those that do not understand the idea of life hereafter and the problems that poses.

That there is no precisely worded statement that 'life is dukkha' is explained by the fact that life is not entirely, exclusively dukkha. But to conclude from that that the intent is not that everything here is essentially - in its essence painful is to suggest that the Dhamma is intended as a solution to only the pain of this world where the suttas are riddled with the idea that the real concern is rebirth.

It does explain his translation of dukkha as "stress", a very worldly problem.

And, as for the difficulty of smiling when existence is indirectly said to be pain, there is this:

"But if, Sāriputta, they should ask you:

'How is it, friend Sāriputta,
that when you know,
when you see,
blissful feeling is not present with you?'

how would you make answer?"

"If they were to ask me thus, lord:

'How is it, friend Sāriputta,
that when you know,
when you see,
blissful feeling is not present with you?'

I should thus make answer:

'There are these three [modes of] feeling, friend.

Which three?

Pleasant,
painful,
neutral feeling.

Now these three modes are impermanent.

And when it is discerned
that that which is impermanent is painful,
blissful feeling is not present.

Thus asked, thus, lord, should I make answer."

"Well done, Sāriputta,
well done!

Moreover the way to answer just this in brief is:

'Whatever is felt is concerned with pain.'

—SN 2.12.32 - Mrs. Rhys Davids, trans.

One more:

I hear tell:

Once upon a time The Lucky Man, Sāvatthi-town residing.

There then, The Lucky Man addressed the bhikkhus:

"Bhikkhus!"

And the bhikkhus responding:
"Bhadante!"
the Lucky Man said this:

"Here in the discipline of the Aristocrats, beggars,
singing is considered lamentation.

Here in the discipline of the Aristocrats, beggars,
dancing is considered a prelude to madness

Here in the discipline of the Aristocrats, beggars,
flashing ones teeth while laughing is but immaturity.

Wherefore as to singing, beggars, pull down the bridge.

As to dancing, pull down the bridge.

It is enough if something delight the mind,
to smile moderately.

AN 3.103 http://buddhadust.net/backmatter/indexes/sutta/an/idx_03_tikanipata.htm#p103

As my teacher said, to be in good mood, to laugh and have fun, to be joyful while at the same time remaining acutely aware of all the dangers, drawbacks and shortcomings of this existence is the greatest act of strength and courage, and the biggest attainment anyone can master.

Have you read "Joy at Last to Know There is No Happiness in the World" by Ajahn Brahm?

See this answer and question in regards to a different contexts of dukkha:

https://buddhism.stackexchange.com/a/17252/13383

Since dukkha is a Pali term, Pali words may have many different contextual meanings in different sentences. Generally speaking, translating dukkha as suffering was questioned by many many scholars, and it's mainly used as a placeholder for a lack of a real word reflecting it in English language.

If one claimed that existence is suffering, one might come to conclusions that annihilation is liberating, but that is not Middle way. As in, breathing, seeing, smelling and simply being would be suffering, but that is not true.

What dukkha means in this context is that everything is unsatisfactory, but it does not mean not to enjoy life or feel joy, it means that these bring temporary, non-lasting satisfaction.

Note that however, pragmatically, people that are very wealthy are much more satisfied than people that are very poor and starve in grave conditions. Those simply are exposed to more conditions that make them suffer. Therefore, there is varying extent of suffering depending on different circumstances and conditions and always relates to some karmic burden.

This is a good question and also one that vexes many.

Part of the answer here is found in unraveling the confusion between compassion and empathy. I've tried to dispel that confusion with this answer. I won't repeat it here except to note that once you've understood the difference between compassion and empathy I think you'll find at least part of this question will melt away.

If we go around constantly feeling empathy for all the suffering in the world, then it will be very hard for us to smile. Why? Because we'd be experiencing the suffering of others in a very tangible way. Luckily, the Buddhist path does not advise that we do this!

What it does advise is that we perfect our compassion and hold a compassionate attitude at all times in every thing we do. Compassion is nothing more than the wish for others to be free from suffering. Compassion provides no hindrance whatsoever to our own happiness or in any way precludes our ability to smile. Just the opposite! The compassionate mind is the very basis for our own happiness and our ability to smile.

In summary:

Walk around with nothing but loving kindness in your heart and a constant compassionate thought for all sentient beings and try not to smile, I dare you :)

They used to frown because of suffering.

But now they smile because they know that suffering is optional (from the third and fourth noble truths) and because they know that Nibbana is the highest bliss or "nibbanam paramam sukham" from Dhammapada 203-204:

203. Hunger is the worst disease, conditioned things the worst suffering. Knowing this as it really is, the wise realize Nibbana, the highest bliss.

204. Health is the most precious gain and contentment the greatest wealth. A trustworthy person is the best kinsman, Nibbana the highest bliss.

Monks also have other reasons to smile, from Dhammapada 197-200:

How very happily we live,
free from hostility
among those who are hostile.
Among hostile people,
free from hostility we dwell.

How very happily we live,
free from misery
among those who are miserable.
Among miserable people,
free from misery we dwell.

How very happily we live,
free from busyness (materialism, avarice)
among those who are busy.
Among busy (materialistic, avaricious) people,
free from busyness (materialism, avarice) we dwell.

How very happily we live,
we who have nothing.
We will feed on rapture
like the Radiant gods.

How can I smile when I know existence itself is dukkha ?

Doctrine doesn't say that "existence is dukkha". See also:

• Did the Buddha really say that "life is suffering"?
• Zen & Dukkha -- Is Everything Suffering?

In 7 Things the Buddha Never Said, Thanissaro Bhikkhu wrote (this is not a complete quote, I'm quoting selectively),

The phrase “Life is suffering” is supposed to be a summary of the Buddha’s first noble truth, but the first noble truth simply lists the things in life that constitute suffering: “Birth is stressful, aging is stressful, death is stressful; sorrow, lamentation, pain, distress, & despair are stressful; association with the unbeloved is stressful, separation from the loved is stressful, not getting what is wanted is stressful. In short, the five clinging-aggregates are stressful.” (Quotation from Samyutta Nikaya, The Grouped Discourses of the Buddha, 56.11)

Life, you’ll notice, isn’t on the list.

The other noble truths go on to show that there’s more to life than just suffering: There’s the origination of suffering, the cessation of suffering, and the path of practice leading to the cessation of suffering as well.

... the Buddha said simply that all fabricated things are impermanent. Anything perceived through the six senses is fabricated, in the sense that it is shaped by conditions, both external and internal.

However, there is something unfabricated that you can experience, and that’s nirvana. (See the Majjhima Nikaya the “Middle-Length Discourses” of the Buddha, 49, and the Samyutta Nikaya, the “Grouped Discourses of the Buddha,”43, for more.)

As the Buddha said, nirvana is the ultimate happiness (Dhammapada 203)—free from change, free from death, free from all limitations. That’s why he taught the path: so that people can find an unconditioned happiness.

... the Buddha actually said that people suffer because they identify with things that change. When the mind is strong enough that it doesn’t need to identify with anything, that’s when there’s no more suffering. On this point, see Samyutta Nikaya 22:1.

Can you smile when you are watching somebody getting tortured ?

I don't know. Is their smile intended as a form of communication in public, does it say something like, "Don't worry about me, I'm alright, you're alright with me", and so on?

If it isn't people "getting tortured", but rather, "torturing themselves", does a smile say something like, "you don't have to do that"?

That's the message which Thich Nhat Hanh took from the Buddha's smile in this story: "He was sitting on the grass, very peaceful, smiling. I was impressed. Around me, people were not like that, so I had the desire to be like him."

If you look at the Brahmaviharas as being:

... the right or ideal way of conduct towards living beings (sattesu samma patipatti) ... in fact, the answer to all situations arising from social contact

then perhaps the "right attitude" for you (or from you) towards these smiling monks is mudita -- i.e. sympathetic joy, joy at their accomplishments.