A System Everyone Can Use

Your brain is much better
than you think, just use it!
Leonardo Da Vinci

Whether you think you can, or think you can't, you're absolutely right. The novel and the movie "The Da Vinci code" has brought this fascinating individual to the forefront in recent years. I believe that we can learn a great deal from Leonardo Da Vinci as well as others who have gone before us. 

Just like the young learn to survive by following and imitating their parents, a key component to being successful is to imitate successful people. Humans, unlike any other species, can choose whom they would like to imitate. Leonardo Da Vinci felt that throughout our lives, and all of its stages, we should learn to consciously choose role models and to replace the ones we outgrow.

By doing this you will begin a positive adventure toward your worthy goal. For example, if you want to become a better trader, study the great traders, Jesse Livermore, Paul Tudor Jones, and Victor Sperandeo, to name a few. Read what they have written and what is written about them. Study their habits and imitate them. If you want to become a leader, study Abraham Lincoln (he never quit) or Winston Churchill. 

Michael Gelb who wrote the book "How To Think Like Leonardo Da Vinci" writes, "It would take an encyclopedia to begin to do justice to the full scope of Leonardo's accomplishments." Da Vinci had visions. What set him apart is that he acted on his ideas. What's most fascinating is the fact that Da Vinci had a "system" he invented and followed religiously every time he began a new idea. It's a very simple system you can use to help you achieve your goals. 

Da Vinci called it the "Smart System", S M A R T, being an acronym for: 

S -   Specific: Define exactly what you want. 

M - Measurable: figure out how you're going to measure your goals. 

A - Accountability: Commit to being personally responsible for achieving your goals. If part of a team, be sure that accountability is clear. 

R - Realistic/Relevant: Set goals that are ambitious but achievable. Make certain your goals are relevant to your purpose. 

T - Timeline: Set a clear time line for the achievement of your goals.

Great plan, wonderful system, easy word, "SMART". 

By the way, I'm sure you know that Da Vinci created the timeless paintings, "Mona Lisa" and "The Last Supper". But did you know that he also created the parachute, bicycle, helicopter, folding chair, alarm clock, and the first comprehensive drawings of the human anatomy! Not a bad role model himself! 

Your Trading/Investing Inner Enemy

It is better to conquer yourself than to win a thousand battles. Then the victory is yours. It cannot be taken from you, not by angels or by demons, heaven or hell.
Buddha

I've seen traders sit quietly, motionless, appearing in control, while their minds are in such a twisted rage that they are incapable of closing a bad position. I have seen people curled up in their seats holding their stomach in physical pain from stress. I've been before the screen, myself, palms sweating, blood pounding, face flushed, and adrenaline pouring through my veins, as if I were in physical danger. All I was doing was watching numbers on a computer screen. Ever wonder what the inner enemy is, that makes this business such a battle? What are the forces that can bring out irrationality, even violence, while watching something as logical as numbers?

Learning to conquer the inner enemy may be the single most important element in succeeding as a trader or speculator. While some fail and some succeed, the difference is not intelligence, it is not knowledge. It is the will to execute knowledge! Acquiring the requisite

knowledge to trade is relatively easy, execution not necessarily so. Take for example the subject of weight loss. You can walk into any bookstore and find a countless number of books, by experts, on the subject of weight loss. Yet only 12% of those who start a weight loss program actually lose weight and only 2% maintain the weight loss for more than one year. That is a 2% success rate, which is even worse than the 5% success rate for people trading futures.

Whether it is losing weight or trading, the most difficult part isn't knowing what to do or how, the most difficult part is making the decision to do it, and sticking to it. When following through is difficult, it is because our minds are still in a state of conflict regarding which course to take. What is the source of this conflict? Why is it that even when we know what we should do, it often seems impossible to do it?

"My head tells me to stop, but my heart tells me to go for it," this common statement

implies a dualism in the nature of human beings; the rational side on one hand and the emotional side on the other. Most people believe these two aspects of human nature are separate, unrelated, and often in opposition to each other. The acceptance of this dichotomy between emotion and reason, the belief that they are necessarily unrelated and often conflicting, is at the root of most human conflict.

How can it be possible to lead an integrated, fulfilled life without suffering constant inner turmoil and frustration? If you accept the premise that emotions and reason are mutually incompatible, it is not possible. As long as you believe the soul is destined to permanently duel with itself, it will. This is the enemy that can make trading such a war. The way to end it, is to challenge the premise that emotions and reason are separate and unrelated aspects of human nature, which means focusing on the nature and purpose of emotions in human life, with particular emphasis on the role of anger and fear.