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profit. So our belief about the outcome is based upon other beliefs. What happens if our well-tested methodology generates losses when we trade with actual money? |
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Whenever they are in a trade, great traders realize that their perceptions are being influenced by their position. They have come to realize that they must constantly monitor how they feel, because what is actually happening in the marketplace is different from their perceptions. Great traders know that whenever they start focusing on the monetary value of the trade, instead of the structure of the price movement, they are distorting the market action, and they should be thinking of going flat. They also know that whenever they start saying "I hope," it is their unconscious mind telling them to exit the trade. They have come to realize that the best way to regain their perspective without undue influence from the market is to go totally flat. |
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The vast majority of traders react to a loss with negative emotions, typically anger. This is because the market made them wrong, and their beliefs weren't validated. When their methodology indicates another trade, they experience a lot of fear. After talking to literally hundreds of traders about their losses, I discovered that the almost universal comment was "Yeah, the market took my money." The second most likely comment was "The floor ran my stops and stole my money!" In other words, it wasn't their actions that lost their money, but the action of the market. Is it any wonder that the vast majority of traders are fearful of the market? Are you more afraid of the market or of your own actions? |
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Almost all great traders whom I have studied or talked with have started from a mental framework similar to that of novice traders. Like novice traders, they experienced the emotions Of fear and anger at their losses. However, they were able to realize that their perceptions, values, references, and mies had to change. Do you know what made them realize that the way they represented the market had to change? Like great athletes and other outstanding performers, they literally realized at a very distinct moment in time that they had to change their internal beliefs. Often it was when they were experiencing maximum pain, almost more than they could bear. |
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For many (but not all) great traders, it was a point in time after they had lost everything. They had lost their house, car, furniture, and in some cases their marriage. They had lost all their money to the market. At a singular moment they realized that they had to find a new career or change their beliefs about the market. At this point in time they realized they could continue to blame the market for their problems, or they could accept responsibility for their present predicament. In many cases when they lost everything they realized that they were more than their possessions, and |
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