Developing YOUR Heart-Mind Trading Edge. - page 2
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Okay Traders,
Now here's something to get us thinking...
I spoke to a friend the other day who is a trader and has been doing well. I encouraged him not to get too confident about his consistent, monthly returns. This was his reply: "Okay, but don't worry about that. My wife always reminds me...'Paul, remember trading is risky. Be careful.' " Paul is not his real name by the way. So what happens is that whenever he sits to trade, whether or not his wife is around, that gentle reminder is there to caution him and acts as a safeguard. It actually helps him in his trading because he values what she has to say.
That Heart-Mind part of us is amazing!!! How many times have you begun to do something and it just didn't feel right? You didn't KNOW why, but...and later your mind caught up with that "other You". Let me tell you, there's a lot going on behind the scenes trading wise. It is time to discover the best kept secret weapon you have as a trader.
More to come...and please, feel free to chime in. All constructive comments welcomed.
Let's Set The Stage
Here we go...
So someone told you about Forex or you saw an ad somewhere and you became interested, maybe because of the opportunity to generate some income: a whole lot! Your initial expectations at that point are also part of the Heart-Mind puzzle. So you decided to sign up for a Demo Account with a broker. Somewhere along the line you saw a document that looked something like this:
RISK DISCLOSURE:
Please be advised that trading in the Forex Market involves high risk. Do not trade with money you cannot afford to lose. Past performance is no guarantee of future results. Trading is risky because you can lose all, if not more of your capital.
As you hurry along to get your trading platform set up and get in on the action, you mutter to yourself, "Yeah, yeah...I already know about that." You acknowledge it by checking the required option but don't really accept it...BUT, that other You saw that notice in RED FLASHING NEON LIGHTS: "Whoa!! This is DAN-GER-OUS!!! Watch out!" It didn't miss the impact of what that message really means to YOU.
We'll tie this in later...just dropping that thought in now.
So now you have your first MUST HAVE (see Post #1) in place to begin trading: a broker. Next you venture off to find a trading system: your specific "recipe" to buy and sell. You get an email from your broker inviting you to attend a webinar to learn about how to use the platform. You also get invitations to their "Broker Trading Academy" where they teach you how to trade. You're ecstatic! Things are rolling along nicely.
So you put together some indicators and you begin trading in your Demo, BUT you don't know your system's expectancy. My system's what? Many books teaching you how to trade don't mention it, but it is very important to know. Expectancy is the average dollar amount you expect to win or lose per dollar you risk. You MUST have an idea of the success rate of your system. If you buy a system, you should ask. If it is not available, then you really don't know if you've bought a loser. Many traders don't want to take the time to back-test their own systems either (so I've been told by indicator experts)...too much work, but your trading heart-mind would thank you for it! Why is this important? If you're losing more than you're winning, your account (if you trade LIVE with that system) will go to zero. Not only that, that other You will show up in your trading and emotional responses may fly high. In other words you'll be setting yourself up to fail by installing mental and emotional pathways that will hinder your development that could lead to successful trading. Repetition is still the mother of learning. Trading habits will be installed that you may not want later on.
Some time ago, I asked a trading veteran (40+ years) why is it that traders hesitate when placing a trade. Without a second thought, they said, "Only two reasons: They don't have a reliable, trusted system or they haven't fully accepted the risk."
Hmm...food for thought. Will continue later in the week.
Feel free to post a thought, comment or question.
P.S. I'd like to add to that veteran's list: emotional scarring from past losing trades.
A Word to the Wise
Was just thinking of some of the struggles traders have shared in the past and the issues they have had after years of trading in the Forex Market. It really is important WHAT you learn/are taught. It is even MORE IMPORTANT HOW you learn/are taught WHAT you learn. The wrong foundation coupled with bad trading habits can be a monster to unravel.
I remember one situation where a trader had been trading for at least four years, and really didn't have a clear understanding of how to read price action on the chart, but, every indicator you can imagine they knew about. Another trader had paid at least 3K to a reputable trader to learn their method which works well, but, the trader didn't really understand how to apply it in the live market. In fact, they had so many puzzle pieces (from different systems), but the pieces were from different boxes so-to-speak and no pictures to follow. Won't tell you how much money they lost trying to make it all work.
The list can go on...Looking forward to making a difference in the traders who visit this Forum or are already members here.
...from my personal experience I might add...that people want to develop "heart & mind" relationship...when they don't know what they are doing...lack of "skills=experience + talent"...once person spends at least 3 weeks doing something of interest...that person can evaluate their performance/rate of learning and choose whether they are willing to pursue learning "that" desired skill or abandon it all together..."heart & mind" connection goes into category of "why"...causes for failure...and not useful at all.
...from my personal experience I might add...that people want to develop "heart & mind" relationship...when they don't know what they are doing...lack of "skills=experience + talent"...once person spends at least 3 weeks doing something of interest...that person can evaluate their performance/rate of learning and choose whether they are willing to pursue learning "that" desired skill or abandon it all together..."heart & mind" connection goes into category of "why"...causes for failure...and not useful at all.
Pava,
I am glad for you because your personal experience seems to be an exception to the experience of most traders. Any hindrance to gaining the experience you mention in your equation must be dealt with, including Heart-Mind connections.
I assure you, I am not a novice trader. What you are not accounting for, even in a person evaluating their performance/rate of learning, is their actual ability to perform. If there is a hindrance to executing trades, as is the case often in trading, a performance evaluation will not be an accurate representation of what that trader is capable of doing.
A well respected person in the industry made this statement: "It doesn't matter how great your system is if you don't have the ability to execute it." That Heart-Mind connection is behind the trigger to releasing that ability to execute.
Hope that helps to clarify my point.
So now you have your first MUST HAVE (see Post #1) in place to begin trading: a broker. Next you venture off to find a trading system: your specific "recipe" to buy and sell. You get an email from your broker inviting you to attend a webinar to learn about how to use the platform. You also get invitations to their "Broker Trading Academy" where they teach you how to trade. You're ecstatic! Things are rolling along nicely.
So you put together some indicators and you begin trading in your Demo, BUT you don't know your system's expectancy. My system's what? Many books teaching you how to trade don't mention it, but it is very important to know. Expectancy is the average dollar amount you expect to win or lose per dollar you risk. You MUST have an idea of the success rate of your system. If you buy a system, you should ask. If it is not available, then you really don't know if you've bought a loser. Many traders don't want to take the time to back-test their own systems either (so I've been told by indicator experts)...too much work, but your trading heart-mind would thank you for it! Why is this important? If you're losing more than you're winning, your account (if you trade LIVE with that system) will go to zero. Not only that, that other You will show up in your trading and emotional responses may fly high. In other words you'll be setting yourself up to fail by installing mental and emotional pathways that will hinder your development that could lead to successful trading. Repetition is still the mother of learning. Trading habits will be installed that you may not want later on.
Some time ago, I asked a trading veteran (40+ years) why is it that traders hesitate when placing a trade. Without a second thought, they said, "Only two reasons: They don't have a reliable, trusted system or they haven't fully accepted the risk."
Hmm...food for thought. Will continue later in the week.
Feel free to post a thought, comment or question.
P.S. I'd like to add to that veteran's list: emotional scarring from past losing trades.Would like to continue on this subject with an example I think most people can relate to.
Let's say someone was walking in the woods or in a park and came across a snake, which most people would consider to be a threat to their safety and well-being. Here are some reactions that may follow:
1. Drop everything in hand and run, screaming for help.
2. Absolutely freeze: be physically paralyzed and unable to move.
3. Find something or someone and try to kill it.
4. Want to pick it up and keep it as a pet.
5. Back away slowly, while checking to see if there are any more around.
Now the presence of the snake was the same in all five scenarios. What was different was the individual's perception about snakes (the level of danger it posed to them); what the individual associated with snakes (either from past experiences with snakes or another animal, or an understanding/knowledge of them), and what the individual "believed"could or would happen to them. Just seeing the snake triggered a response that was almost instantaneous.
Handling the risk that is presented in trading incorporates these elements as well. (This is dealt with in more detail during the free webinar). Next week we'll touch on how the body processes these stimuli that enter the mind through our sensory gateways. The end-result of that process of course, is the action we take (or avoid taking).
Hello Traders,
Planning to post on this part of the process this week...Beginning To Understand The Heart-Mind. This discussion will give a little behind the scenes about what is happening in and to our bodies that is the cause of what we do.
A little on the emotional side of things...
By the way, fear and greed are not the only emotions that can have a tangible effect on your trading. There's a whole list of them! Be sure to read the excerpt to get you started.
As promised, the discussion continues.
The example was used earlier about the different ways in which someone may react upon seeing a snake in a park or similar place. The following points will help to bring things into perspective:
1. Person sees the snake. A visual impression is sent via the eyes to the brain.
2. Within seconds, certain physiological and heart-mind responses take place. On the physiological side, a hormone called epinephrine (formerly known as adrenaline) is released in the body, to prepare it for some kind of act of self-preservation. Dopamine may also be released, which acts as a natural pain killer. Without conscious thought or an act of your will the following changes begin to take place:
Let me mention here that the degree of stress perceived by your "mental-emotional senses" will determine the degree of your physiological response. It is also interesting to know thatduring times of "perceived stress or danger", the logical mind tends to give way to more instinctive moves. Rational thinking may take a back seat: an act-first; think-later kind of approach can surface. This is where traders need to be aware and be very careful.
Just in case you're thinking that it may not be the case, and that the effects of stress may not be that critical or extreme, here are three examples to illustrate the point:
1. Have you ever been in a situation that was so emotionally devastating that your physical heart/chest actually hurt? There is a definite connection there, and it will show up in your trading.
2. Have you ever been in a trade where you thought you were calm and in control, when someone walked by and asked, "Is everything okay?" You replied, "Absolutely! Why do you ask?" They replied, "Well, I'm looking at how your left leg is shaking." You look down and to your amazement, your left leg was shaking and you were not even aware of it. That's a sure sign that your heart-mind is under stress even if YOU think you're okay. (Some traders may experience another kind of emotional "twitch" that will let them know that their heart-mind is engaged and part of their trading process.
3. Have you ever noticed the warnings at amusement parks (like Disneyland) on certain rides? Basically they are saying if you have a heart condition, stay away as the stress levels may be too much.
Before going more into the Heart-Mind side of this, I hope you're paying attention to some very key words/phrases:
Perception
Belief
Expectation
Emotion
Conditioning
Association
Mental/Emotional Pathways
Will let this post soak in for a bit...