Skip to main content

Building a Framework for Understanding Ourselves

The first step in this process of adaptation is recognizing the need to adapt.

If you can't manipulate or force the markets to change in a way that suits your needs, then you will need to learn how to change yourself to suit the conditions.

The next two steps in this process are to learn how to (1) identify exactly what changes you need to make to function successfully in the trading environment and (2) how to effect any mental changes that are necessary.

Manipulating the physical environment is as easy as moving a chair from one place to another because that's where you want or need to sit. However, to consciously change yourself to function more effectively in a market environment that will not respond to your attempts to manipulate it will require a thorough understanding of the nature and functioning of your mental environment.

First, you will need to learn some sophisticated mental skills to adapt yourself more readily to the constant changes with which the market confronts you—which will require neutralizing some commonly held cultural beliefs about success. (These are the beliefs that have the potential to distort market information.) Second, you will likely need to undo any psychological injury you may have sustained from your previous trading activity. Any psychological injury diminishes your capacity to execute your trades properly.

The first thing you will need is a structural framework to make the things that go on in your mental environment more tangible and concrete. To give you this framework, I will describe, define, and organize the component parts of the mental environment into a manageable context to where you can (1) understand your behavior, (2) learn the various techniques for manipulating your mental environment at your conscious direction to be more consistent with the environmental conditions and your goals, and (3) learn how to monitor your relationship with the exterior environment.

It is essential that you learn how to monitor your relationship between the interior and exterior environment because our goals, intents, expectations, needs, and wants are all component parts of our mental environment that we project out into the physical environment for fulfillment in some future moment. 

By making the connection between what we believe and what we experience, it will be a lot easier to change what we experience by learning how to manipulate our beliefs.
The predominate underlying force behind most traders' actions causing prices to move is fear—the fear of missing out (competing for the supply) and the fear of loss. If you really want to understand the market's behavior to anticipate what it will do next, then you will first have to learn about and understand the underlying forces beneath your own behavior and how you process and manage information.

If you can't change or control what the market is doing, then the only option you have left is to control yourself in a way that allows you to perceive what the market may do next with increased clarity and objectivity, requiring a thorough working knowledge of the nature of your inner environment in relationship to the outer physical environment.

Comments

Popular posts from this blog

Maximizing Your Profits with Scoring

SETTING YOUR MAXIMUM INTRADAY TRADING LOSS First things first: set a max intraday trading loss. There will be days when you just do not have it. Why do you think coaches pull their players when they are not playing well? They are more harmful on the field than off. When you are underperforming, you are hurting your team and your trading business. You need a system to yank yourself over to the bench. A stop loss is your answer. TRADING BASED UPON THE TIME OF DAY A good trader makes note of what time of day it is, when he trades most profitably, and adjusts his trading to fit such times. Your numbers at the end of the month will not reflect your true trading potential. Make the most trades with the most size during the trading periods that statistically are most profitable for you. Money saved during your weaker trading periods is money earned. Consistency The fact is that most trades you make will start working for you right away. But the new traders also hold stocks that are trading ag...

TIME

Time is the law of hypnotic  rhythm. The lapse of time required to give permanency to thought habits depends upon the object and the nature of thoughts. Time divides all thought habits into two classes, negative thoughts and positive thoughts. One's individual thoughts are of course constantly changing and being recombined to suit the individual's desires, but thoughts do not change from negative to positive or vice versa except throught voluntary effort on the part of the individual. Time penalizes the individual for all negative thoughts and rewards him for all positive thoughts, according to the nature and purpose of the thoughts. If one's dominating thoughts are negative, time penalizes the individual by building in his mind the habit of negative thinking and then proceeds to solidify this habit into "permanency," of course, refers to the natural life of the individual. In the strict sense of the term, nothing is permanent. Time converts thought habits into wh...

Hypnotic Rhythm

 Any impulse of thought that the mind repeats over and over through the habits form an organized rhythm. Undesirable habits can be broken. They must be broken before they assume the proportions of rhythm. Rhythm is the last stage of habit! Any though or physical movement which is repeated over and over the principle of habit finally reaches the proportion of rhythm. Then the habit cannot be broken because nature takes it over and makes it permanent. It is something like a whirlpool in water. An object may keep floating indefinitely unless it is caught in a whirlpool. Then it is carried round and round but it cannot escape the energy with which people think may be compared with water in a river. Says the devil: "Those who control and use their own minds escape my web." Says the devil: "The time they [people] spend in fearing something would, if reversed, give them all they want in the material world and save them from me after death." If your mind fears poverty, your...