Step Five : Learning to think in probabilities
Let the market define itself and then apply whatever criteria you use to define an opportunity. Identify your significant reference points and place your orders on either side of the point; then wait for the market to do whatever it is going to do. Try putting your orders in the market in advance of whatever you perceive as having a high probability of occurring based on the existing market conditions.
By putting your orders in advance of some anticipated move, you will be learning how to let the market work for you Placing your orders in advance will also help to keep you from having an opinion, and you won't be subjecting yourself to the moment-to-moment conflict inherent within all price movement.
STEP SIX: LEARNING TO BE OBJECTIVE
To achieve a state of objectivity you need to operate out of beliefs that allow for anything to happen, as opposed to beliefs that allow only for the market to express itself in a limited fashion. If you operate out of a belief that anything can happen, then whatever does happen won't be threatening to you in any way, thereby causing you to avoid or distort certain categories of market information. Any limits you place on the market's behavior will be a compensating factor for your lack of trust and confidence to act appropriately in any given situation. This will be evidenced by the fear, stress, and anxiety that you will feel when the market expresses itself beyond your mental limits and you can't do anything to control the situation.
To be objective, you will need to release yourself from "demand-backed expectations" and make what I call "uncommitted assessments of the probabilities." Unlike the markets, in our everyday social lives we can and do exert control over the environment to assure ourselves of the outcomes that we desire. The rules we learn to abide by in order to interact with one another are our expectations about the future. Once we learn these rules, especially if we have learned them in a painful way, we can demand certain outcomes from the environment. Hence, our expectations of the future are actually demands that the environment conform to our expectations of it.
To be objective you have to make "uncommitted assessments of the probabilities." Which simply means that you have no commitment to any particular outcome. You just observe what is happening in each moment as an indication of what will probably happen next.
Here is what objectivity feels like, so that you can recognize when you have achieved it.
You feel no pressure to do anything
You have no feeling of fear
You feel no sense of rejection
There is no right or wrong
You recognize that this is what the market is telling me, this is what I do
You can observe the market from the perspective as if you were not in a position, even when you are You are not focused on money but on the structure of the market
To stay objective anticipate as many possibilities as you can and how probable each of these possibilities are. Then decide in advance what you are going to do in each situation. If none of your scenarios is working out as you anticipated, then get out. Release yourself from the need to be right. The more uncommitted your assessments are the less potential for distortion and experiencing a painful forced awareness.
STEP SEVEN: LEARNING TO MONITOR YOURSELF
you need to start paying attention to what you are thinking about and what market information you are focused on.
Trading Rules
When you are in a trade constantly ask yourself if anything "has to happen." Obviously, you want the market to go in your direction; however, what I want you to do is monitor how you feel, your Level of commitment to what has to happen. Remember there is a big difference in perspective between "what is happening" and something that "has to happen." If you find that your commitment levels are rising, keep on telling yourself that it is all right for anything to happen because you are confident in your ability to respond appropriately to whatever does happen.
Ask yourself what can't happen? What can't the market do? When you find yourself rationalizing the market's behavior to support your position, you are operating in the realm of illusion and setting yourself up for a painful forced awareness. Remember the market can do anything, even take your profits away if you allow it. Always take something out of the markets when you find yourself in a winning trade.
A question to ask yourself is if you are prepared to give yourself money today. If the answer doesn't come back a resounding yes, then find out why before you trade. If you can't reconcile the issue or set it aside, then you would be better off not trading, until you do. If you are determined to trade anyway, at the very least make a substantial reduction in the number of contracts you normally trade.
When you find yourself focused on the monetary value of a trade instead of the structure of the market (i.e., what the trade is worth to you in dollar terms, dreams, goals, and so forth instead of what the market is telling you about its potential to move in any given direction) then assume you are distorting or avoiding certain information and either don't put the trade on or take what you have off until you become more objective.
Let the market define itself and then apply whatever criteria you use to define an opportunity. Identify your significant reference points and place your orders on either side of the point; then wait for the market to do whatever it is going to do. Try putting your orders in the market in advance of whatever you perceive as having a high probability of occurring based on the existing market conditions.
By putting your orders in advance of some anticipated move, you will be learning how to let the market work for you Placing your orders in advance will also help to keep you from having an opinion, and you won't be subjecting yourself to the moment-to-moment conflict inherent within all price movement.
STEP SIX: LEARNING TO BE OBJECTIVE
To achieve a state of objectivity you need to operate out of beliefs that allow for anything to happen, as opposed to beliefs that allow only for the market to express itself in a limited fashion. If you operate out of a belief that anything can happen, then whatever does happen won't be threatening to you in any way, thereby causing you to avoid or distort certain categories of market information. Any limits you place on the market's behavior will be a compensating factor for your lack of trust and confidence to act appropriately in any given situation. This will be evidenced by the fear, stress, and anxiety that you will feel when the market expresses itself beyond your mental limits and you can't do anything to control the situation.
To be objective, you will need to release yourself from "demand-backed expectations" and make what I call "uncommitted assessments of the probabilities." Unlike the markets, in our everyday social lives we can and do exert control over the environment to assure ourselves of the outcomes that we desire. The rules we learn to abide by in order to interact with one another are our expectations about the future. Once we learn these rules, especially if we have learned them in a painful way, we can demand certain outcomes from the environment. Hence, our expectations of the future are actually demands that the environment conform to our expectations of it.
To be objective you have to make "uncommitted assessments of the probabilities." Which simply means that you have no commitment to any particular outcome. You just observe what is happening in each moment as an indication of what will probably happen next.
Here is what objectivity feels like, so that you can recognize when you have achieved it.
You feel no pressure to do anything
You have no feeling of fear
You feel no sense of rejection
There is no right or wrong
You recognize that this is what the market is telling me, this is what I do
You can observe the market from the perspective as if you were not in a position, even when you are You are not focused on money but on the structure of the market
To stay objective anticipate as many possibilities as you can and how probable each of these possibilities are. Then decide in advance what you are going to do in each situation. If none of your scenarios is working out as you anticipated, then get out. Release yourself from the need to be right. The more uncommitted your assessments are the less potential for distortion and experiencing a painful forced awareness.
STEP SEVEN: LEARNING TO MONITOR YOURSELF
you need to start paying attention to what you are thinking about and what market information you are focused on.
Trading Rules
When you are in a trade constantly ask yourself if anything "has to happen." Obviously, you want the market to go in your direction; however, what I want you to do is monitor how you feel, your Level of commitment to what has to happen. Remember there is a big difference in perspective between "what is happening" and something that "has to happen." If you find that your commitment levels are rising, keep on telling yourself that it is all right for anything to happen because you are confident in your ability to respond appropriately to whatever does happen.
Ask yourself what can't happen? What can't the market do? When you find yourself rationalizing the market's behavior to support your position, you are operating in the realm of illusion and setting yourself up for a painful forced awareness. Remember the market can do anything, even take your profits away if you allow it. Always take something out of the markets when you find yourself in a winning trade.
A question to ask yourself is if you are prepared to give yourself money today. If the answer doesn't come back a resounding yes, then find out why before you trade. If you can't reconcile the issue or set it aside, then you would be better off not trading, until you do. If you are determined to trade anyway, at the very least make a substantial reduction in the number of contracts you normally trade.
When you find yourself focused on the monetary value of a trade instead of the structure of the market (i.e., what the trade is worth to you in dollar terms, dreams, goals, and so forth instead of what the market is telling you about its potential to move in any given direction) then assume you are distorting or avoiding certain information and either don't put the trade on or take what you have off until you become more objective.
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