Wednesday, August 31, 2016

Motivating Yourself

Always do your best. 
What you plant now, 

you will harvest later. 

Og Mandino
When everything is going according to plan and you are "on", you are in the most positive and highly motivated state you can attain. Your mind is set on it's path and you are in a state of total concentration and focus. Your mind is totally committed to what you are doing. The bad news however: This is not a state of mind you can just choose at will.

In any endeavor, the process of growth and achievement has four key elements: Goals; Actions; Awareness; and Change. Each one of these factors is crucial, but the foundation for the process is goals. Writing a few sentences or listing some things you'd like won't establish goals. Goals have no power until you experience them as real. You must experience them not as something you merely want, but as something you need to sustain life - like food.

Your mind is a supercomputer that you can program to experience a goal as a fundamental need. Then your mind (supercomputer) will do everything it can to drive you toward your goal, and the rest of the steps will follow much more easily: what you do, the output of your mind, it all depends on the input. The input is simply: what you perceive, how you process the information, how you look at reality with your conscious mind, and how you have trained or failed to train your subconscious mind to function. Free will really means that you can change the programming in your mind.

Emotions determine motivation. We are driven by two fundamental forces at the
emotional level, the desire to attain pleasure and the need to avoid pain. When we want something, is it the "thing" we really want? What we really want is the change we think it will cause in our mental and physical state of being, that makes us want what we want. People who desire to lose weight do not care much about the actual"fat cells". They want to change the way they feel about themselves. What they really want is to feel in control of their lives, to feel healthy and live longer, to feel more attractive to others, to feel more energetic and excited about life.

A profitable trading record can and often does have more losing trades than winning ones. If this is the case, then obviously the profits from the good trades must be larger than the losses from the more frequent losers. The most common error traders make is taking profits too early and allowing the loses to run to far. The reason is simple: at the time we are not motivated by the rules, we understand them but we don't realize them. Why do we do this? The need to avoid the pain of losing, and of being wrong drives us to deny rules we know to be right. To execute the rules is painful, but not executing them will increase your state of dissatisfaction and deplete your trading capital. I think upon self-examination, you will find some form of the pleasure/pain paradox is at work when you are having trouble moving towards your goals in your trading account and in life.

Just as we feed ourselves food everyday, we often need to feed our minds motivational food, to keep our focus, direction, and attitude. You can accomplish this with books, or very popular audio listening material. A Quote of the Day site might help as well

Thursday, August 25, 2016

It's Not Necessary to Understand Everything

Look deep into nature, and then you
will understand everything better.
Albert Einstein

Time is one of those things none of us can create. Achievers invariably manage to be time misers. They extract the essence from a situation, take out what they need, and do not dwell on the rest. In the markets, it is not necessary to be able to understand every aspect of a company's financial statement, or to understand every aspect of economic prospects to trade the markets. It is also not necessary to understand every technical indicator. There is a balance between understanding everything and picking what you need to know.  

Many successful people live by a very useful belief. They do not believe they have to know everything about something in order to use it. They know how to use what's essential without feeling a need to get bogged down in every detail. A very simple
example: I am sure all of you own a TV and a remote control device. How many know exactly how they work? What you do know is how to use it. Simply press the power button and the TV is on, press the channel button and it changes channels. It is not necessary to know the inner workings in order to use it. 

In order to effectively use all that you are in this life, you should discover that there is a balance between use and knowledge.

"You can spend all your time studying the roots, or you can learn to pick the fruit". - Anthony Robbins.
There were probably plenty of scientists and engineers at major universities who knew more about computer circuitry than Steve Jobs and Steve Wozniak (founders of Apple Computer), but they were so effective at using what they had.

If you follow the markets every day, in time you will become proficient at extracting the information you need to make a decision. Whether it is looking through hundreds of charts, or the use of market scans looking for stocks fitting your personal criteria, or breaking down the marketplace into sectors and groups to determine what's hot and what's not. As you gain experience you will become very proficient at extracting the information you require. Then merely include these stocks, sectors, or groups you have found into a watch list where you will keep extensive notes on such things as: buy point, sell point, and your perceived risk and potential gain.  

Wednesday, August 10, 2016

Blaming Circumstances

You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. That is something you have charge of.  
Jim Rohn

We all from time to time face difficult problems, situations and circumstances. Whether it be in our personal lives, the business world and our jobs, or what to do in the marketplace. Our natural tendency is to blame the circumstances that surround us for the particular difficulty we are presently facing. Everything I know about the market said it was supposed to go down and it went up instead. How could I possibly have known this or that would happen?

One of the hardest lessons, to not only learn, but accept and understand; is that circumstances are not negative or positive, circumstances are neutral. It is our thinking, our perspective, that make circumstances either positive or negative. Try and think of these difficult circumstance in this vain, - "Everything in the universe has its opposite." There is a North Pole and its opposite is the South Pole. If you live 150 miles from New York City, then it must be 150 miles from New York City to where you live. If something you considered bad happens in your life, there has to be something good about it.

If you suffered a loss on a trade or series of trades, you have probably gained a good deal of knowledge as to the why, and you have probably gained even more knowledge about controlling risk. The gains in knowledge, over time, will far out balance the loss or losing streak you have just suffered, by rewarding you in the future.

I hope it's clear, that every circumstance can be viewed in two ways. And it's the way we view the circumstance that determines its impact on our thinking and our mental state. No matter how bad the circumstance appears to be, taking another look, from another perspective, will reveal the potential good. 

Napoleon Hill, author of the classic "Think and Grow Rich," wrote, "Every adversity, every failure and every heartache carries with it the seed of an equivalent or a greater benefit."