Basic Trading Psychology.
- Thread starter ktmtrader
- Start date
What separates the best traders from the rest is that they have trained their minds to believe in the uniqueness of each moment. This belief acts as a counteracting force, neutralizing the automatic association mechanism. When you truly believe that each moment is unique, then by definition there isnât anything in your mind for the association mechanism to link that moment to. This belief acts as an internal force causing you to disassociate the ânowâ moment in the market from any previous moment filed away in your mental environment. The stronger your belief in the uniqueness of each moment, the lower your potential to associate. The lower your potential to associate, the more open your mind will be to perceive what the market is offering you from its perspective.
When you completely accept the psychological realities of the market, you will correspondingly accept the risks of trading. When you accept the risks of trading, you eliminate the potential to define market information in painful ways. When you stop defining and interpreting market information in painful ways, there is nothing for your mind to avoid, nothing to protect against. When thereâs nothing to protect against, you will have access to all that you know about the nature of market movement. Nothing will get blocked, which means you will perceive all the possibilities you have learned about (objectively), and since your mind is open to a true exchange of energy, you will quite naturally start discovering other possibilities (edges) that you formerly couldnât perceive.
For your mind to be open to a true exchange of energy, you canât be in a state of knowing or believing that you already know whatâs going to happen next. When you are at peace with not knowing whatâs going to happen next, you can interact with the market from a perspective where you will be making yourself available to let the market tell you, from its perspective, what is likely to happen next. At that point, you will be in the best state of mind to spontaneously enter âthe zoneâ where you are tapped in the ânow moment opportunity flow.â
Carefree means confident but not euphoric. When you are in a carefree state of mind, you won't feel any fear, hesitation or compulsion to do anything, because you've effectively eliminated the potential to define and interpret any market information as threatening. 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 any outcome. To be at peace with any outcome, you must reconcile anything in your mental environment that conflicts with the truths about the market.
When all sources of conflict have been deactivated, thereâs no longer a potential for you to be any other way. What was once a struggle will become virtually effortless. At that point, it may seem to other people that you are disciplined - because you can do something they cannot - but the reality is that you arenât being disciplined at all; you are simply functioning from a different set of beliefs that compel you to behave in a way that is consistent with your desires, goals or objectives.
When you know, and you know that you know, your confidence changes. What some people might deem as high risk, you understand trading as a simple matter of probabilities. You have learned through the pass of pain, to train your rational mind to consistently execute a predefined systematic response, when your emotional mind may be trying to compel you into doing something else. You are the discipline, you are consistent, you do not need to look outside of yourself to find them in any method, or in any person. You carry them with you, wherever you are."
From your thread, I can tell you've been reading and basically quoting Mark Douglas.
Another trading psychologist who is also an expert on intuition, Andrew Menaker, would agree with much of it, except for a few parts - e.g. "not associating one moment to the next" as always being beneficial. He says yes, being in the now moment is good, but intuition can work in other ways too.
Specifically, Menaker says intuition is a function several things, including implicit learning of pattern recognition of market movement - and that requires association. What he would tell you is being in the zone is when we have the implicit recognition or association but without the emotional reactivity or triggering of P&L concerns.
Uhh...damn man...that made my head hurt.
