dbphoenix
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Trading is a sequence of small financial decisions. If you have not done the prep, you get to take a pass-fail emotional test every time you sit down to trade. This repeats over and over until you work through these issues. Once you have done so, trading is emotionally void, and the risk of trading emotionally is effectively zero. This heightens your awareness and perception of the market (and your "self") during trading.
To trade rationally and objectively, you must possess strongly supporting beliefs.
Supporting beliefs can totally ELIMINATE emotional trading as of the moment you completely internalize ("possess") them.
The Five Fundamental Truths
1. Anything can happen.
2. You don’t need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.
The Seven Principles of Consistency
1. I objectively identify my edges.
2. I predefine the risk of every trade.
3. I completely accept the risk or I am willing to let go of the trade.
4. I act on my edges without reservation or hesitation.
5. I pay myself as the market makes money available to me.
6. I continually monitor my susceptibility for making errors.
7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.
It is impossible to trade emotionally once these beliefs are internalized, primarily due to Principle 3: "I completely accept the risk . . .". You take 100% responsibility for all results: all the profits, all the losses, EVERYTHING.
If you hold the 5 beliefs, you can follow the 7 Principles because the beliefs support the Principles.
If you follow the Principles, especially Item 7, then you do not need to "learn emotional control" because you are already living out the beliefs that manifest calm and effortless control of emotions.
This makes perfect sense if you buy the idea that behavior comes from values and values come from beliefs. Beliefs underlie all your values, and values underlie all your behaviors. Therefore, work on beliefs, not "emotional control" (behaviors) per se.
If you hold the 5 beliefs, you are going to be very disciplined about risk. For example if you truly believe "anything can happen at any time", you are going to put strict limits on the total risk you are willing to take. If you don't impose limits on risk, you CLEARLY don't hold the belief that "anything can happen".
The 5 beliefs and 7 rules force a complete understanding of all risks and complete management of those risks, especially Risk of Ruin. The 5 beliefs and 7 rules manifest great RESPECT for risk.
To hold the 5 beliefs and follow the 7 rules you must be ready, willing and able to take 100% responsibility for all your results.
This 100% acceptance of all responsibility means you are never a victim of anyone else – ever – and that all the credit (if any) belongs to you – and you alone.
What level of competence you actually achieve is in direct proportion to how fully and faithfully you adhere to these beliefs about trading.
Liberty means responsibility. That is why most men dread it.
--George Bernard Shaw
To trade rationally and objectively, you must possess strongly supporting beliefs.
Supporting beliefs can totally ELIMINATE emotional trading as of the moment you completely internalize ("possess") them.
The Five Fundamental Truths
1. Anything can happen.
2. You don’t need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.
The Seven Principles of Consistency
1. I objectively identify my edges.
2. I predefine the risk of every trade.
3. I completely accept the risk or I am willing to let go of the trade.
4. I act on my edges without reservation or hesitation.
5. I pay myself as the market makes money available to me.
6. I continually monitor my susceptibility for making errors.
7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.
It is impossible to trade emotionally once these beliefs are internalized, primarily due to Principle 3: "I completely accept the risk . . .". You take 100% responsibility for all results: all the profits, all the losses, EVERYTHING.
If you hold the 5 beliefs, you can follow the 7 Principles because the beliefs support the Principles.
If you follow the Principles, especially Item 7, then you do not need to "learn emotional control" because you are already living out the beliefs that manifest calm and effortless control of emotions.
This makes perfect sense if you buy the idea that behavior comes from values and values come from beliefs. Beliefs underlie all your values, and values underlie all your behaviors. Therefore, work on beliefs, not "emotional control" (behaviors) per se.
If you hold the 5 beliefs, you are going to be very disciplined about risk. For example if you truly believe "anything can happen at any time", you are going to put strict limits on the total risk you are willing to take. If you don't impose limits on risk, you CLEARLY don't hold the belief that "anything can happen".
The 5 beliefs and 7 rules force a complete understanding of all risks and complete management of those risks, especially Risk of Ruin. The 5 beliefs and 7 rules manifest great RESPECT for risk.
To hold the 5 beliefs and follow the 7 rules you must be ready, willing and able to take 100% responsibility for all your results.
This 100% acceptance of all responsibility means you are never a victim of anyone else – ever – and that all the credit (if any) belongs to you – and you alone.
What level of competence you actually achieve is in direct proportion to how fully and faithfully you adhere to these beliefs about trading.
Liberty means responsibility. That is why most men dread it.
--George Bernard Shaw
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