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...

The Secret to Self-Control

 If you’re overweight, a smoker, or an addict, you’ve been told your entire life that it is because you lack self-control—maybe even that you’re a bad person. The idea that a little bit of discipline would solve all our problems is deeply embedded in our culture. When scientists analyze people who appear to have tremendous self-control, it turns out those individuals aren’t all that different from those who are struggling. Instead, “disciplined” people are better at structuring their lives in a way that does not require heroic willpower and selfcontrol. In other words, they spend less time in tempting situations. The people with the best self-control are typically the ones who need to use it the least. It’s easier to practice self-restraint when you don’t have to use it very often. So, yes, perseverance, grit, and willpower are essential to success, but the way to improve these qualities is not by wishing you were a more disciplined person, but by creating a more disciplined enviro...

So what is your money blueprint set for?

Are you programmed for managing your money well or mismanaging it? Are you a spender or a saver ? Wealth principle: The only way to permanently change the temperature in the room is to reset the thermostat. In the same way, the only way to change your level of financial success "permanently" is to reset your financial thermostat. You can become an expert in real estate or the stock market. All of these are tremendous "tools." But in the end, without an inner "tool-box" that is big enough and strong enough for you to create and hold on to large amounts of money, all the tools in the world will be useless to you. Your income can grow only to the extent that you do. Remember that the first element of all change is awareness.Watch yourself, become conscious, observe your thoughts, your fears, your beliefs, your habits, your actions, and even your inactions. Put yourself under a microscope. Study yourself. Wealth principle: Consciousness is observin...