How To Think Correctly

[Brothers Soul]

"How does one learn to think correctly? Define 'correctly' in terms of trading?"

think like a thief, or become aware of how these thieves think in the market. All the info the Masters have at their disposal, then the silent Band of Brothers who know their (masters) habbitual thieving plans play out will join in . You have to be o.k at mugging old blind men & women in a dark alley furthermore you have to say here old blind man , take my arm for safe passage , as the old man says thank you my son you then lift his wallet and nobble his one good leg and leave him.

trust this is helpful.

 

[CYOF]

PS: I do not agree with you in relation to the documents been of no use to traders - especially the Purpose,Vision,Goals. I have surveyed the document (SQ3R method as mentioned previously) and I can honestly say that the document looks like it is worth reading in relation to developing ones trading career. The name in itself should imply something to anyone who is really committed to trading fulltime as a business.

It will be interesting to get some opinions from other traders in relation to the content of the documents - I will read the second one and post my thoughts when I get a chance.

Having read both documents - whilst walking the dog - the following is my opinion:

1) Purpose, Visions, Goals > very relevant to developing a successful trading business - I will post some further details later in relation to how my experiences to date relate to the context of this document.

2) The Power Of Thought > A good read prior to reading The Master Key by Charles Haanel. This document covers alot of what Haanel wrote about - but with a little more focus on the "Almighty". Haanel, on the other hand, tends to focus on the "Individual Self". Both, however, in my opinion have explained clearly the reasoning behind why we end up with what we have in life - and what we end up with is largely dependant on the thoughts we entertain - reading the documents will explain what I am talking about here - I will never be able to explain as good.

All three documents (including The Master Key which is not listed above), IMHO, are worth reading by any person who wants to become successful at trading. They will, however, make one question oneself in relation to what one really wants to achieve in life - and it may just so happen that trading is not the best way to fulfil your purpose in life - and if you don't know what your purpose is - then you should definitely read these a few times until you fully understand the writings and what they mean.

Well, I have to go and do the shopping now - as the wife is off buying clothes - so I will post my follow up later in relation to the Purpose, Vision, Goals - as I think this one is very important and may benefit others greatly.

Regards,

 

[CYOF]

1) Purpose, Visions, Goals > very relevant to developing a successful trading business - I will post some further details later in relation to how my experiences to date relate to the context of this document.
Regards,

Purpose: Help those who are less fortunate than most - especially sick children

Vision: Financial Independence

Goals:
1) Learn how to do bread and butter trading > Daytrading Nas Tech Stocks
2) Learn how to maximise available surplus capital from bread & butter trading > Swingtrading Stocks, Futures Trading, Commodity Options & Futures Trading and FX trading

In relation to the above, I am around 80% complete on Goal No.1 and around 20% complete on Goal No.2

If you read the Purpose,Vision, Goals document - and especially the section "When You're Not Doing What You Should Be Doing", that describes my actions 100% in relation to Goal No.1 - especially the details in relation to quiting your job, knowing what your needs are and working out a practical way to free up the time that will be required in order to work on achieving your Goals.

Now - to a lot this may all seem like more BS, but as someone who has gone through the experiences of trading fulltime - and all the associated baggage - this sure as hell makes very realistic sense to me - I just wish I had discovered these documents earlier as it may have saved me a lot of headaches and helped me to achieve my first Goal sooner.

To get back to the theme of this thread - how to think correctly - one will sometimes be compelled to do something no matter what the outcome may be. This is how it was with me - I gave up my job knowing that I may not generate any income for 1 year (I was in a position to last this out for the year) and nothing was going to stop me - and I mean nothing. I could not give a reason at the time - but now I understand it more clearly.

The main driving force behind what I am doing is my belief system - and I am adding this in at this point because I think it is very crucial to enable one reach their goals. I believe 100%, following part time trading for several years, that I can master daytrading to generate 1% -2% return per day on available capital up to $100K. To get to this level, however, will require some major decisions in my life (some of which I have already taken - as mentioned) as I had to take that quantum leap and actually go fulltime - as it is was the only real way for me to gain the required experience. Part time trading is not the same - full time is a totally different ballgame and requires 100% commitment. It is also very hard to master and requires months and months of hard work - from learning how to set up all your PC's to getting to the stage where you can place winning trades (and exit losing trades very quickly) each and every day.

Using the S.M.A.R.T approach - Specific Measurable Attainable Realistic & Time Based - can help greatly in creating the required framework so that one actually operates in a similar manner as many successful businesses do.

I hope that someone may get some value from this post - and my final word is that no matter what I read or listened to - the only real way that I have achieved anything to date was by doing something about the thoughts in my head. This meant taking some big chances - which have worked out well for me - and will require some more in the future - which I will also take on.

There is no such thing as luck in our lives - we are all masters of our own destiny - and our end result will depend on how much we believe in ourselves and the type of thoughts we entertain on a daily basis - we are what we think.

Regards,

 

[in2uxs]

Honesty and straightforwardness always pay. They pay to the purveyor of the information, for the intellectual and moral satisfaction that they yield.

But it is very frustrating when the reciever of the information warps it to suit his or her idealised notions, which is the absolute wrong thing to do.

I will give you an example, a minor one, but nevertheless a significant one, ok ?

You put two people into a room in front of screens, sitting side by side for them to observe...

You set up a detailed montage to illustrate a concept discussed in advance..

You explain the sequence of observation of this specific montage.

You explain the sequence of observation required is
N, S, E + W, N, S, E + W, N, S, E, + W, N,S,E +W, N.S.E+ W......and the specific reasons in each case for this order of disciplined observation ....

or....N, S +E...... N, S + E .....

or.....W, E + N W, E +N........

or........... N+S... N+S....N+S....N+S....N+S.....N+S....

And now you tell them you have to leave the room and for them in your absence to observe the sequence as detailed for the reasons explained already in detail and NOT TO TOUCH ANYTHING...

You plan to leave them watching this for it to sink in for say 20 minutes....

But you come back 5 minutes later and the montage has been totally mucked up.

The mouse did not click itself did it ?

So the first time this happens to you you get annoyed...

The next time you get even more annoyed....

And the third time you get furious....

But if this is the "norm" of how people can misdirect themselves to behave NO MATTER WHAT, and I am only offering a glimpse, a minor example, then after a time you get so p####d off you cannot be persuaded to set up any montages to help anyone develop edges under any circumstances or for any reason, u c ?

There you have it.

Is the answer: (SE/ W)+(N/ SE)/3?

 

[CYOF]

"How does one learn to think correctly? Define 'correctly' in terms of trading?"

think like a thief, or become aware of how these thieves think in the market. All the info the Masters have at their disposal, then the silent Band of Brothers who know their (masters) habbitual thieving plans play out will join in . You have to be o.k at mugging old blind men & women in a dark alley furthermore you have to say here old blind man , take my arm for safe passage , as the old man says thank you my son you then lift his wallet and nobble his one good leg and leave him.

trust this is helpful.

Whilst there may well be dishonest traders in the market, as there are in all walks of life, with trading you have one major advantage that most victims of robbery do not have.

You can actually decide how much you will allow the thief rob from you - it is amazing how many traders fail to recognise this very important point!

 

[Splitlink]

Whilst there may well be dishonest traders in the market, as there are in all walks of life, with trading you have one major advantage that most victims of robbery do not have.

You can actually decide how much you will allow the thief rob from you - it is amazing how many traders fail to recognise this very important point!

I think that that is a very negative attitude

 

[CYOF]

Hi Splitlink,

I think you may have misunderstood the purpose of my post - it was not to reinforce the comments by brothers soul, it was to stress the point that a lot of traders fail to see that they alone can control exactly the amount they will loose - during normal trading activity of course.

In keeping with reality however, we all know that there is some level of dishonesty in the markets - look at Enron - so we can't ignore this fact completely either.

Regards,

 

[andycan]

Very true andy,

One of the reasons why I tried to get the CTM forum going - practice first then trade live.

Everything else takes a back seat - but having said that - there are some "gems" of information in the psyco babble writings that may help one to understand ones own limitations.

Been able to identify the gems quickly, IMHO, is only gained through experience - i.e, as you trade and make errors, some of the gems may assist you in confronting the errors correctly and overcome them - typical example is using visualisation techniques to overcome the problem with pulling the trigger when you think you should - but you hesitate and the trade is then gone.

Just my thoughts of course - what works for one may not work for the other.

Regards,

Yes there are some gems, but there are gems if they fit your personality.
the mental aspect of trading is even more complex than trading itself or is it?
i dont make a point of making it complicated therefore its not, do i use the power of the mind to achieve that? absolutely
why?
because i can...
but i do have a flaw which im forever at odds with but knowing myself means i can keep it under control most of the time

 

[CYOF]

Yes there are some gems, but there are gems if they fit your personality.
the mental aspect of trading is even more complex than trading itself or is it?
It will be as complex as we make it ourselves

i dont make a point of making it complicated therefore its not, do i use the power of the mind to achieve that? absolutely
Yes - but we should at least be aware that there may be a better way to utilise the power of the mind - there is always room for improvement in everything we do.

why?
because i can...
100% - and so can anyone if they are willing to learn.

but i do have a flaw which im forever at odds with but knowing myself means i can keep it under control most of the time
The nature of thought - and this is where the understanding of the sub conscious can be of great benefit - again it is worth considering the available options.

Just some of my thoughts.

Regards,

 

[andycan]

good thoughts

 

[FXSCALPER2]

Hey Soc, I have always thought you are full of s**t. However, after that post about montage observation, I have to say you may not be as bad as I thought.

 

[CYOF]

Yes there are some gems, but there are gems if they fit your personality.
the mental aspect of trading is even more complex than trading itself or is it?
i dont make a point of making it complicated therefore its not, do i use the power of the mind to achieve that? absolutely
why?
because i can...
but i do have a flaw which im forever at odds with but knowing myself means i can keep it under control most of the time

I have just started to read Trading In The Zone by Mark Douglas. I have read The Disciplined Trader in the past, but my first impressions are that Trading In The Zone is much, much better.

The Disciplined Trader has a lot of "psychological terms" which leaves the reader wondering about a lot of what they have just been reading.

To get some real value from Trading In The Zone - it will require some serious note taking and summaries. I believe that some very important "trading goals" can be set using this book as a guide - which will be much more beneficial than just concentrating on "trading systems" or "trading approaches".

If I get the time, I will try and incorporate these "trading goals" into the PVG document that I have started.

I agree fully with Douglas when he says that trading is 20% Mechanical and 80% Psychological, and getting back to the theme of this thread, the Psychological aspect is totally dependant on the way we think as Individuals!

 

[CYOF]

This is the PVG document that I hope to revise to include the "trading goals" as stated in previous e-mail.

 

[nine]

But if this is the "norm" of how people can misdirect themselves to behave NO MATTER WHAT, and I am only offering a glimpse, a minor example, then after a time you get so p####d off you cannot be persuaded to set up any montages to help anyone develop edges under any circumstances or for any reason, u c ?

Socrates' post raises what to me seems to be the real issue.

Conscious plans, goals, etc are good to have but don't address the areas that really sabotage trading. Similarly Mark Douglas's work classifies a number of key issues that we see in real life trading and some of the drivers for them (I don't believe all of them, just the ones he's seen). But his solutions don't work quickly (if at all) for many people - readers go, yeah! thats me, wow, but months later most of them are still making similar mistakes.

I saw a program the other night about a brit in NY who lost his memory ... 100%. But he didn't, what he lost was his episodic memory - he couldn't remember who he was or anything he'd done for his entire life. No people, nothing. But he still had two types of memory, his semantic memory and his procedural memory. In these two are some hints for traders.

Your semantic memory contains meaning, things like knowing that Sydney is the capital of Australia (lol, Aussies, I couldn't resist that). He still had that. You also have procedural memory where you remember how to do things, he could ride a bicycle or throw a ball.

For traders the problem is this. Trader A has a fantastic semantic memory, is very intelligent, and can figure out all the tricks of trading. So he learns or develops a day trading strategy. Then he tries it out .... and fxxx's it up big time! Socrates' training attempts.

The problem is that what you know doesn't translate into what you do. Lots of things contribute to it (fears, greed, hope, things you tried along the way and rewarded you spectacularly from time to time but are not part of your current strategy). So we have a great conscious view of what we should do and its all there at the semantic level.

But its not there at a procedural level. In that level lies the key to success or failure. Enough for now --- does anyone think this is on track or should I but out?

 

[CYOF]

But its not there at a procedural level. In that level lies the key to success or failure. Enough for now --- does anyone think this is on track or should I but out?

Definately not - you are 100% right in what you are doing.

I have mentioned many times in the past, and I will mention it again now, question eveything you read (and this includes Mark Douglas, or any other persons thoughts) and take what value you can from the writings and try to apply what you have learned in order to improve your own trading results.

A few key points, for ME, suddenly come to mind in relation to other posts made by T2W members.

1) Just Do It
2) Know Your Limitations
3) Look At The Big Picture
4) Know Your Entry, Stop & Exit
5) Know The Market you Are Trading
6) Trust Yourself
7) Think Positive - Not Negative

We can read and interpert information, as much and as long as we like, but the only way that anyone can accomplish anything is by the act of doing - we all had to crawl before we could walk, for if we did not crawl our muscles would not develop so that we would be able to walk.

What we do is (edit: may be) dependent on the following:


Reference: The Master Key System 1912 - this is a bit long but I had to paste it all in as leaving out some information does not give the whole picture - and I would also not be able to explain it as good as the original text - read on if interested, if not just ignore!

Edit: I have posted the pages to make it easier to read.

 

[SOCRATES]

Hey Soc, I have always thought you are full of s**t. However, after that post about montage observation, I have to say you may not be as bad as I thought.

If if is any consolation to you, there are many who think like you but they eventually creep back with their tails between their legs, when it already too late, expecting help, advice and guidance.

Well, it aint gonna happen, so there.

 

[nine]

Well, it aint gonna happen, so there.

LOL

 

[SOCRATES]

LOL

LOL

The first part....may or may not happen....

The second part will definitely not happen.

LOL

 

[CYOF]

Socrates' post raises what to me seems to be the real issue.

Conscious plans, goals, etc are good to have but don't address the areas that really sabotage trading. Similarly Mark Douglas's work classifies a number of key issues that we see in real life trading and some of the drivers for them (I don't believe all of them, just the ones he's seen). But his solutions don't work quickly (if at all) for many people - readers go, yeah! thats me, wow, but months later most of them are still making similar mistakes.

I think it will depend on the Individual and how that individual thinks.

Plans / Goals / Objectives are of no use on paper - they must be put into practice and worked on. My experiences in dealing with people who set Goals & Objectives based on their job function, is that they nearly always initially set way too many - and the majority end up doing a little bit for all. The end result is failing to achieve the desired outcome within the specified time period.

A better approach may be to identify the ones that can deliver the best results - and concentrate on these. This may mean that you now only have one Goal and one Objective, but if you have correctly identified that this Goal / Objective will produce the best results, then this is fine. The end result is achieving the desired outcome within the specified time period.

Finding the solutions to ones problems can only be done by oneself.

Others may guide and direct, but the end result - what one actually does - will be totally dependant on how one thinks as an individual.

Therefore, if the end result is totally dependant on how one thinks, then it may be wise for one to at least accept that there may be ways to improve the way one thinks.

The first step is acceptance of this fact - only those who accept can start to learn.

If one dismisses everything at face value, then one is shutting out the opportunity to discover something new.

Experience will greatly assist with ones ability to quickly distinguish between information that may have value, and information that is time wasting.

IMHO, there is no easy way - life just does not work that way.

Here are some KEY attributes that I think are required in order to become a profitable trader on a consistent basis:

Open Mind > Ability To Deduct Logically > Flexibility To Change As And When Required > Strong Belief System > Confidence > Quick Decision Making Ability > Clear Understanding Of Probabilities > and last but not least - Commitment To What You are Trying To Achieve

 

[nine]

*Excerpt from "Trading in the Zone" - By Mark Douglas*

Several studies have been done on the psychological effects of random rewards on monkeys.

For example, if you teach a monkey to do a task and consistently reward it every time the task is done, the monkey quickly learns to associate a specific outcome with the efforts. If you stop rewarding it for doing the task, within a very short period of time the monkey will simply stop doing the task. It won't waste its energy doing something that it has now learned it won't be rewarded for. However, the monkey's response to being cut off from the reward is very different if you start out on a purely random schedule, instead of a consistent one.

When you stop offering the reward, there's no way the monkey can know that it will never be rewarded again for doing that task. Every time it was rewarded in the past, the reward came as a surprise. As a result, from the monkey's perspective, there's no reason to quit doing the task. The monkey keeps on doing the task, even without being rewarded for doing it. Some will continue indefinitely. I'm not sure why we're susceptible to becoming addicted to random rewards.

If I had to guess, I would say that it probably has something to do with the euphoria-inducing chemicals that are released in our brains when we experience an unexpected, pleasant surprise. If a reward is random, we never know for sure if and when we might receive it, so expending energy and resources in the hope of experiencing that wonderful feeling of surprise again isn't difficult.

In fact, for many people it can be very addicting. On the other hand, when we expect a particular outcome and it doesn't come about, we're disappointed and feel bad. If we do it again and get the same disappointing outcome, it isn't likely that we will keep doing something we know will cause us emotional pain. The problem with any addiction is that it leaves us in a state of "choicelessness."

To whatever degree the addiction dominates our state of mind, to that same degree our focus and efforts will be geared toward fulfilling the object of that addiction. Other possibilities that exist in any given moment to fulfill other needs (like the need to trust ourselves and not to subject too many of our assets to risk) are either ignored or dismissed. We feel powerless to act in any other way than to satisfy the addiction. An addiction to random rewards is particularly troublesome for traders, because it is another source of resistance to creating the kind of mental structure that produces consistency.