|Sent on:||Tuesday, July 10, 2007 11:18 AM|
Here are some of my notes from the book Trading in the zone... This is really a very good book so I am taking the time to type this out for you...
It boils down to learning to believe that; 1 you don't need to know what's going to happen next to make money; 2 anything can happen and 3 every moment is unique, meaning every edge and outcome is truly a unique experience.
A top trader would say that your fear is irrational because this 'now moment' opportunity has absolutely nothing to do with your last trade. Each trade is simply an edge with a probable outcome, and statistically independent of every trade. If you believe otherwise, then I can see why you're afraid; but I can assure you that your fears are completely unfounded.
When you have trained your mind to think in probabilities, it means you have fully accepted all the possibilities (with no internal resistance or conflict) and you always do something to take the unknown forces into account. thinking this way is virtually impossible unless you've done the mental work necessary to "let go" of the need to know what is going to happen next or the need to be right on each trade. In fact, the degree by which you think you know, assume you know, or in any way need to know what is going to happen next, IS EQUAL TO THE DEGREE TO WHICH YOU WILL FAIL AS A TRADER!
Making money consistently is a by-product of acquiring and mastering cretin mental skills. Stop focusing on the money and focus instead on how you can use your trading as a tool to master these skills. Consistency is the result of a carefree, objective state of mind, where we are making ourselves available to perceive and act upon whatever the market is offering us (from its perspective) in any given "now moment."
When you are in a carefree state of mind, you won't feel fear, hesitation, or compulsion to do anything, because you've effectively eliminated the potential to define and interpret market information as treating. To remove the sense of threat, you have to accept the risk completely. When you have accepted the risk, you will be at peace with the outcome.
If your edge puts the odds in your favor, then every loss puts you that much closer to a win. When you really believe this, your response to a losing trade will no longer take on a negative emotional quality.
This email message originally included an attachment.