Trading on Target E-Book

Adrienne Toghraie

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Trading Series
• Sprache: Englisch

Seitenzahl: 380

Veröffentlichungsjahr: 2011

Beschreibung

A leading trainer of traders explains the process and pitfallsto trading success While advances in trading tools and technology have increasedthe potential for capturing profits, the fact is that if you'rementally unprepared to enter today's markets, you'll probably endup making many costly mistakes. Nobody understands this better thanAdrienne Toghraie, an expert Trader's Success Coach and masterpractitioner of Neuro-Linguistic Programming (NLP) for thefinancial and business communities. Now, with Trading onTarget, she shares her extensive experiences--as well asthe stories of real-world traders--to help you overcome theself-imposed limitations keeping you from reaching tradingsuccess. Engaging and informative, this accessible guide takes a detailedlook at what you need to become a psychologically, and emotionally,mature trader. Page by page, Toghraie pulls it all together andreveals the attitudes, perceptions, and insights that will allowyou to excel at this difficult endeavor. Along the way, she alsoprovides practical solutions to dealing with the oldest hang-upscommonly found among those who aspire to succeed in trading, andoffers advice on how to gain and maintain self-discipline intoday's dynamic markets. * Shows how to overcome the various obstacles to becoming a toptrader * Explores how you can let go of emotional states that can affectyour trading * Offers insights on taking the right action and making bettertrading decisions * Reveals how to expand yourself in order to reach the next levelof trading success Wherever you are in your ability as a trader, there is alwaysroom to grow. Adrienne Toghraie has seen this firsthand during hertwenty-one years in the business of working on trader discipline.With this book, she'll help you develop a winning trading mindsetand put you in a better position to break through the barriers thathave been holding you back.

Leseprobe

Contents

Cover

Series

Title Page

Copyright

Foreword

Preface

Acknowledgments

About the Author

Part I: Obstacles to Becoming a Top Trader

Chapter 1: Mirror, Mirror

CHOOSING HOW YOU LIVE: YOUR ENVIRONMENT

CHOOSING HOW YOU TAKE CARE OF YOUR OUTER SELF: YOUR DRESS AND APPEARANCE

CHOOSING HOW YOU TAKE CARE OF YOUR INNER SELF: YOUR THOUGHTS AND EMOTIONS

CHOOSING HOW YOU TAKE CARE OF YOUR INNER SELF: YOUR SPIRITUAL LIFE

CHOOSING HOW YOU INTERACT WITH THE OUTSIDE WORLD: YOUR RELATIONSHIPS AND YOUR CONTRIBUTIONS TO THE COMMUNITY

CONCLUSION

Chapter 2: The Perfection Trap

MR. PERFECTION

PERFECTION AND SUCCESS

HOW IT ALL BEGINS

FOR TRADERS: THE COST OF PURSUING PERFECTION

GETTING OUT OF THE TRAP AND BACK ONTO THE GREEN

THE ALTERNATIVE

Chapter 3: Deep Freeze

THE GREEN GIANT

DOING TRADER FREEZE

INSPECTRESS CLOUSSEAU, AT YOUR SERVICE

OVERWHELMING YOUR NEURO-NETWORKING

INTO THE MIND OF PERFORMANCE ANXIETY

CHANGING THE DOMINO EFFECT

CONCLUSION

Chapter 4: The Price of Holding on to Your Stories

THE BIG FISH THAT GOT AWAY

MORE FISHY STORIES

LETTING GO VERSUS REALLY LETTING GO

THE COST OF TURNING NEGATIVE STORIES INTO POSITIVE ONES

STAYING OUT OF THE STORY

RETELLING THE STORY

CONCLUSION

Chapter 5: On the Right Track

TRYING TO SAVE MONEY AND TIME

FOLLOWING SOMEONE ELSE IN HOPES OF TRADING FOR YOURSELF

“INTO-WISHING” AND HOPING THAT YOU WILL BE THE EXCEPTION TO THE RULE

ACQUIRING THE HOLY GRAIL BY USING SOMEONE ELSE’S WORK

HOW DO YOU KNOW WHEN YOU ARE ON THE WRONG TRACK?

CONCLUSION

Chapter 6: Motivators for a Down Day

THE LOW ENERGY TRADER

TWO FINAL CAVEATS

CONCLUSION

Chapter 7: The Internally Motivated Trader Part 1

THE EXTERNALLY MOTIVATED TRADER

THE LOW-DOWN ON MOTIVATION

THE SOURCE OF THE PROBLEM

CONCLUSION

Chapter 8: The Internally Motivated Trader Part 2

SETTING THE TRAP

A TRADER AT EFFECT

WHAT IS DONE MAY ACTUALLY BE UNDONE (SOMETIMES)

CONCLUSION

Part II: Letting Go of Emotional States

Chapter 9: Letting Go of Fear

FEAR, DREAD, ANXIETY, NERVOUSNESS

CONCLUSION

Chapter 10: Letting Go of Resentment

HANDLING TOXIC EMOTIONS

A LESSON IN LETTING GO

MAKING THE DECISION

CHECKING OUT YOUR BELIEFS

CONCLUSION

Chapter 11: The Greed Addiction

THE PERPETUALLY UNDONE TRADER

THE BIOLOGY OF GREED

CONCLUSION

Chapter 12: The Defensive Trader

IT’S NOT LUCK

NOT LISTENING

THE NEED TO DEFEND

A WAY OUT OF DEFENSIVENESS

CONCLUSION

Chapter 13: Transformation of Feelings

FEELINGS THAT CREATE REALITY

THE TYPICAL STRATEGY FOR CREATING REALITY

WINNING ON A LOSING PATH

HOW DO YOU DEAL WITH NEGATIVE FEELINGS?

CONCLUSION

Chapter 14: Comfort in Pain

THE SOURCE

THE LURE OF PAIN

FINDING PAIN

MOVING INTO A BETTER NEIGHBORHOOD

STRATEGIES FOR MAKING A CHANGE

CONCLUSION

Chapter 15: Don’t Complain

THE DON’T COMPLAIN PART

THE WHINER TRADER

THE HIGH COST OF COMPLAINING

TURNING DOWN THE COMPLAINING VOLUME

CONCLUSION

Part III: Taking Right Action

Chapter 16: The Momentum of Choices

ADDING UP THE CHOICES

THE CHOICE TO TURN LEMONS INTO LEMONADE

INCREASING THE MOMENTUM OF YOUR CHOICES

CONCLUSION

Chapter 17: Action Is the Bottom Line

PERCEPTION AS REALITY

WHAT SCHMIDT COULDN’T SEE

REFLECTIONS—YOURS AND OTHERS

TURNING ON A DIME

YOUR PERSONAL RESOURCES

LISTING YOUR ASSETS

CONCLUSION

Chapter 18: Traders and Decisions

I REALLY DON’T WANT TO SUCCEED

INADEQUATE EARLY MODELS

LACK OF EXPERIENCE

DECISION-MAKING OVERLOAD

CONCLUSION

Chapter 19: The Big Reveal

YOU REALLY DO NOT WANT TO DO THE WORK

YOU DO NOT WANT TO SIT IN FRONT OF A COMPUTER SCREEN ALL DAY

YOU DO NOT WANT THE RESPONSIBILITY

YOU ARE AFRAID OF BEING WRONG AND/OR AFRAID TO FAIL

YOU REALLY DO NOT WANT TO OR ARE AFRAID OF LEAVING YOUR PROFESSION

BECOMING A TRADER WILL DEVASTATE YOUR FAMILY

CONCLUSION

Chapter 20: The Rules of the Game

THE PLAYERS AND THE CLUELESS

CONCLUSION

Chapter 21: Getting Back at the Markets

SELF-DESTRUCTION

THE WHYS OF A LOSING STRATEGY

FIGHTING BACK

GETTING BACK

A BETTER STRATEGY

CONCLUSION

Chapter 22: What a Difference a Day Makes

TURNAROUNDS IN A SINGLE DAY

THE MOST POWERFUL ONE-DAY TURN-AROUND STEP

WHY NOT MAKE A TURNAROUND DECISION?

TRANSFORMATIONS AND EPIPHANIES

CONCLUSION

Part IV: Stretching and Expanding Yourself as a Trader

Chapter 23: Learning Something Every Day

AN OPEN MIND VS. AN EMPTY ONE

WHAT TO LEARN?

CONCLUSION

Chapter 24: Stretching Your Trading Discipline

STRETCHING AS A TRADER

CONCLUSION

Chapter 25: Thinking Large for Traders

REALISTIC THINKING

THE ONE-GOAL-AT-A-TIME STRATEGY

OPTIMISM VS. PESSIMISM

THINKING LARGE EXERCISES

CONCLUSION

Chapter 26: Trading the Dream

DREAMS DO COME TRUE

FANTASIES

TELLING FANTASIES FROM DREAMS

CONCLUSION

Chapter 27: Stretching Life to the Next Level of Success

REACH THE NEXT LEVEL OF SUCCESS IN TRADING

Chapter 28: The Happy Monkey

THE BOREDOM CRISIS

THE TINKER TRADER

THE TRADER SHARK

THE SELF-ESTEEM FACTOR

THE HAPPY MONKEY

BECOMING THE HAPPY MONKEY

CONCLUSION

Chapter 29: Shrinking from Opportunity

THE PARADOX

CREATING A BALANCE

BORED IN TRADING

GETTING BACK THAT OLD FEELING

THE DOOR TO OPPORTUNITY

STOPPED AT THE DOOR

DISCARDING THE OLD PATTERN

CONCLUSION

Chapter 30: Drill to Focus

THE SECRET FORMULA: DRILL

THE EASIEST PART OF THE DRILL/THE HARDEST PART OF THE DRILL

THE SECRET INGREDIENT

CONCLUSION

Part V: Modeling Top Traders

Chapter 31: The Heart of a Master Trader

“BA-DA-BING”

THE MINE FIELD

TRUE GRIT

STRAY BULLET OF GREATNESS

CONCLUSION

Chapter 32: Top Performance

EDUCATION

TIME

MONEY

ENERGY

SACRIFICE

CONQUERING YOURSELF

TRUSTING TO RISK

CONCLUSION

Chapter 33: The Rite of Passage for a Professional Trader

THE FIRST STEP IS THE HARDEST

THE RITES OF PASSAGE

CONCLUSION

Chapter 34: Middle C

VIRTUOSO IN MIDDLE C

MAKE IT SO, NUMBER ONE!

FUZZY PICTURES AND BAD RECEPTION

SENDING CLEAR MENTAL PICTURES

CONCLUSION

Chapter 35: Passion

CREATING PASSION

THE GREAT LACKING

THE LOVE OF THE THING

BIOLOGY IS DESTINY

IMAGINATION AND PASSION

A PASSION FOR HEALTH

CONCLUSION

Chapter 36: The Winner’s State of Mind

ENERGY

CONFIDENCE

DISCIPLINE IS A GIFT

PASSION AND PURPOSE

LEAST LIKELY TO SUCCEED

THE RIGHT MINDSET

A HARD AND GOOD LIFE

FOCUS

A PATH TO PASSION

CONCLUSION

Extra Services: Trading On Target

SERVICES

SEMINARS

PRODUCTS

Index

Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia, and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers' professional and personal knowledge and understanding.

The Wiley Trading series features books by traders who have survived the market’s ever-changing temperament and have prospered—some by reinventing systems, others by getting back to basics. Whether a novice trader, professional, or somewhere in-between, these books will provide the advice and strategies needed to prosper today and well into the future.

For a list of available titles, visit our web site at www.WileyFinance.com.

Bodhi and Gingko

Copyright © 2011 by Adrienne Toghraie. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at [phone], outside the United States at [phone], or fax [phone].

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com.

Library of Congress Cataloging-in-Publication Data:

Toghraie, Adrienne Laris. Trading on target : how to cultivate a winners state of mind / Adrienne Toghraie. p. cm. – (Wiley trading series) Includes index. ISBN 978-1-118-06491-7 (hardback); ISBN 978-1-118-08677-3 (ebk); ISBN 978-1-118-08678-0 (ebk); ISBN 978-1-118-08679-7 (ebk) 1. Investment analysis. 2. Investments. 3. Success in business. I. Title. HG4529.T594 2011 332.64–dc22 2011005438

Foreword

A drienne has done it again! In her latest published volume, Trading on Target, she presents a down-to-earth, easy-to-read common sense book for the practical trader in any market. Learn about the real-life facets of trading discipline, as Adrienne takes your hand and leads you through the sometimes tricky mechanics of self-discipline and self-control.

There are few authors in the area of help for traders who write with Adrienne’s clarity. The interesting thing is that when you read her books you wonder: “how does she know I’m having these problems?” Those thoughts and feelings that you’ve been vaguely aware of are now brought into focus as if a fog has been lifted. You can now define and hopefully anticipate the way you will react to price action.

Adrienne and I have been friends for some time. We have collaborated at seminars and webinars so I know of her dedication to traders everywhere. The answers to the “whats” and “whys” of market discipline are explained in plain, precise language which should be easily understood by old-timers and new traders alike.

This book gives you the nuts and bolts of what you need to become a psychologically and emotionally mature trader. The lessons are taken from the lives of real traders, traders who have struggled through the very things that may be holding you back.

Adrienne pulls it all together: the attitudes, perceptions, and insights you will need to reach the heights of trading success. She will also give you solutions to handle the oldest psychological and emotional hang-ups commonly found among those who aspire to succeed in trading.

In reviewing my past 53 years of trading, I found Adrienne’s Trading on Target a refreshing, informative, and rewarding work.

JOE ROSS Trader, Author, Speaker, MentorTrading Educators

Preface

It always surprises me that, after 21 years in the business of working on trader discipline, I would have more to write about. But traders never fail me with the material they offer. Even if some of the information has been said before in another way, very often this new approach will be beneficial for a new understanding.

On a larger note, wherever you are in your ability as a trader, there is always room to grow. There is an old adage “When the student is ready, the teacher arrives.” What I have found to be true is that, “When the student is ready, he will hear the words from a teacher in a way that he has never heard them before.” There have been many times when a client will write to me and say, “My trading improved dramatically after we worked together, but that article you just wrote took it to a new level.”

Trading On Target is about overcoming the self-imposed limitations that keep traders from the next level of success. With each trader who I have worked with privately, I have grown in my skills as a trader's success coach. These skills have led to new insights, which are the basis of this book.

The way traders approach the markets has changed over the years because of new technology. Also, traders are now more inclined to accept the psychology of trading without feeling threatened. For this reason, in this book I can be more straightforward in how I present this material.

One of the main differences in the way traders think about the psychology of trading, from when I first started my business, is that traders are more inclined to want to seek out whatever it takes to improve themselves psychologically. They feel comfortable talking about their issues to their peers as well as to me.

Traders have told me that reading about the real life experiences of other traders who have overcome their issues, makes them feel like they can face their own. Having specific exercises—that are included in this book—gives traders a vehicle for starting to improve their performances. It also makes traders aware of those areas where they need help.

I have enjoyed the journey of assisting many traders to reach high levels of success and will continue to do so. Welcome aboard.

Acknowledgments

A special thanks to all of the traders who contributed their stories so that everyone could learn from their lessons.

Another special thanks to the following magazines, newsletters, and web sites that have published articles and interviews: SFO Magazine, Tech Talk with Don Vialoux, Technical Analysis of Stocks and Commodities Magazine, Traders World Magazine, Trading on Target Newsletter, and Your Trading Edge Magazine.

About the Author

A drienne Toghraie, Trader’s Success Coach, is an internationally recognized authority in the field of human development and a master practitioner of Neuro-Linguistic Programming (NLP) for the financial and business communities. She is the founder and president of Trading on Target and Enriching Life Seminars, two companies dedicated to helping traders, sales people, and other high achievers to dramatically increase profits and success in all areas of life. Using her 21 years of study in the science of Modeling Excellence/NLP and numerous other forms of psychological development, Toghraie has helped her clients to push through their self-imposed limitations to extraordinary and documented new levels of success.

Adrienne’s articles and interviews have been featured in most of the major financial trade magazines and newspapers throughout the world. She has authored Get A life: Treasure Diary for Creating Wealth and Happiness, The Winning Edge 2: Traders’ and Investors’ Psychological Coach in a Book, The Winning Edge 3: Traders’ and Investors’ Coaching to Excellence, The Winning Edge 4: Traders’ and Investors’ Greater Success, Traders’ Secrets co-authored with Murray Ruggiero and The Winning Edge, How to Use Your Personal Psychological Power in Trading and Investing with Jake Bernstein.

Adrienne’s public seminars and private counseling, as well as her television appearances and keynote addresses at major industry conferences, have achieved a wide level of recognition and popularity.

PART I

Obstacles to Becoming a Top Trader

Your success will reflect the history of your life, unless you transform how you interpret the stories of your past.

Chapter 1

Mirror, Mirror

Take a good look into the mirror of your life. What do you see? If you are willing to look deeply, you will find the obstacle to achieving greater success. This obstacle is You. While you spend your time crunching out indicators and plotting out money management, you also need to look into the other choices you make in your daily life, because those choices affect how you make trading decisions.

Here are some of the choices you make that most clearly reflect the problems in your trading.

CHOOSING HOW YOU LIVE: YOUR ENVIRONMENT

Trading problems are often reflected in the environment in which you choose to live. If your physical environment is a mess, chances are that your trading is a mess, too. And so it was with John, one of my clients.

John’s parents learned to be clever out of necessity. They were poor immigrants from Yugoslavia who escaped Communism with nothing more than the clothes on their backs and the determination to create a safe life for themselves in America. They educated themselves, grew their own business, and established a foundation of wealth. John remembers growing up in a home that was full of things that other people would have discarded. And so it became John’s habit as well never to throw away anything, because it could be useful some day. He was living with his parents’ mindset even though his inheritance left him with more than a million dollars in the bank, a mortgage-free home, and a monthly trust fund stipend that provided enough for an average lifestyle for the rest of his life.

John became a trader after becoming bored with his chosen field of engineering. He set out to do whatever it took to be profitable without taking risk. Anyone who knew trading would be impressed with his mathematical equations and indicators, but he was stuck at the gate. Every time he would try paper trading to prove his system, he would find it necessary to tweak it. What John was doing was trying to create a situation where he would not have to take any risk. When I asked John to start throwing away anything that he thought he would never use again, he found it impossible. In frustration he asked me an all-too-familiar question, “What does this have to do with trading and making money?” I told John that until he was willing to let go of the beliefs of his parents, he would never have the mindset of taking the risk necessary to be a successful trader.

Solution: Reflect Order

If you look into the mirror of your life and you see physical disorder, you need to address the problem. Unfortunately, when disorder and chaos take over your living space, you cannot simply wave a magic wand and make it all disappear. However, the good news is that over time, the problem can be completely corrected. I have helped traders bring order back into their lives through the following process:

The first step is to decide on one very small area that could be cleaned and organized in a matter of a few minutes at most. Then, do it! Make it something so painless that it cannot create any fear or discomfort.As soon as you have accomplished this first step, praise yourself.Repeat these steps.As you begin to see progress, you can take on projects that are a little larger, but never set yourself major goals as this will cause you to feel overwhelmed.

Remember, that no one can eat a 10-tier chocolate cake in one large mouthful. But, anyone can do it a spoonful at a time.

CHOOSING HOW YOU TAKE CARE OF YOUR OUTER SELF: YOUR DRESS AND APPEARANCE

Dress appropriately to feel good about yourself, because you will respond emotionally to your own appearance the same way you respond emotionally to other people’s choices about their appearances.

So, what do you see in the mirror today? If you see yourself sitting at the computer unshaven, in pajamas, and barefoot, your appearance may be reflecting the source of your trading problems. One of the lessons I have learned from attending countless trade shows is that I can spot a highly successful trader from a hundred feet away. He is rarely the sloppy fellow with the five o’clock shadow who looks like he needs a shower. He will have a clean-cut appearance with an air of confidence about him.

Solution: Reflect a Well-Dressed Image

Just as the state of your physical environment may reflect disorder in your trading, your physical appearance may do so, too. Taking care of your appearance tells your unconscious mind that you are in control of your world and that you care about yourself, as well as promoting discipline in your life. When you look in the mirror and see a person proud of his appearance, your unconscious reflects that success. All of these messages provide positive instructions for your unconscious mind.

Part of looking good is looking healthy and fit. So, wearing even the most expensive clothes will not obscure the fact that you make unhealthy choices in your diet and exercise regimen. If you bulge in the middle, and if your skin and hair look unhealthy, you will not be able to hide it from your mirror.

CHOOSING HOW YOU TAKE CARE OF YOUR INNER SELF: YOUR THOUGHTS AND EMOTIONS

When you look carefully at your face in the mirror, you will see your own thoughts and feelings reflected in your eyes and in the corners of your mouth. Is it a happy, determined, positive, content, or successful aura that you see? Is it a depressed, bitter, frightened, or resigned face that looks back at you? If we can read those powerful emotions in the faces of those around us, we can learn to see them in ourselves, as well. So take a good long look.

Our thoughts determine our emotions, which in turn determine our behaviors. If our thoughts are negative, pessimistic, self-deprecating, and finger pointing, our emotions will be dark, full of depression and anger, and energy depleting. Our trading will reflect those thoughts and emotions. With such powerful inner forces at work, it is easy to see how a trader would have difficulty dealing with the inevitable losses that are a natural part of trading.

A trader named Phil had been struggling with his trading for many years, unable to rise above mediocre results. It was obvious, however, after our first session together that the problem was clearly reflected in the choices he made in his thoughts. Phil was quick to talk about the negative, and eager to look for ways to prove that he was wronged by the markets and by everyone around him. When Phil looked in the mirror, all he saw was a victim. His poor performance was a perfect reflection of his self-defeating self-talk. What Phil needed to do was to actually listen to his own self-talk to see how he sabotaged his own success.

Solution: Choose Positive, Life-Affirming, Motivating Self-Talk

You may not be able to see your words in a mirror, but you can certainly see their effects on your face. How can you stop choosing negative, sabotaging self-talk?

The first step is to start noticing how you talk to yourself when you are not following your rules in trading. Do not try to censor your thoughts. Just observe them. What are you really telling yourself? It helps to write down what you are saying to yourself to discover what is really going on in your mind. Remember, your words will affect your emotions, and your emotions will affect your performance. So, listen carefully.Once you have spent some time observing and listening to your own self talk, it is time to correct it. When you hear yourself saying something negative, correct it with a positive statement. For example, if you hear yourself saying, “There I go again, doing something stupid,” correct yourself with a statement such as, “I learn useful lessons from my mistakes.”Each time you say something positive, praise yourself by saying, “good catch” to anchor in the new behavior.Continue listening to your self-talk and to the self-talk of others, and it will make you even more aware of negative talk. This will eventually cause you to translate your negative self-talk into positive statement anchors.

CHOOSING HOW YOU TAKE CARE OF YOUR INNER SELF: YOUR SPIRITUAL LIFE

Once again, looking deeply into the mirror, you can see reflected there the peace or lack of it that comes from having cultivated a spiritual life or not having done so. Traders who become obsessed with the bottom line and forget about the top line can lose the inner peace that is essential to a long and happy trading career. For example, Keith was a trader who was so obsessed with his trading that he failed to develop the other parts of his life. When his wife died from breast cancer, his entire world collapsed, along with his trading. He had no inner resources from which to draw, and he had no spiritual life to help him deal with this enormous loss in his life.

Solution: Find a Spiritual Practice That Brings You Inner Peace

Because there is no one spiritual practice that is right for everyone, you may need to look around for the one that fits your needs and values. You may decide that the religious tradition of your childhood is the one that feels best, or you may find that you have outgrown it. In any case, prayer and/or meditative practices are powerful means to bring you peace. Once you have begun to achieve that inner peace, it will show in your face and be reflected in your trading.

CHOOSING HOW YOU INTERACT WITH THE OUTSIDE WORLD: YOUR RELATIONSHIPS AND YOUR CONTRIBUTIONS TO THE COMMUNITY

When you look into the mirror, you can also see the faces of the people standing next to you. Who are they and what do their faces tell you? Do you see a happy and loving family and a large circle of friends surrounding you? Do you see a community of people around you who are grateful for the contributions that you make to them? Or do you stand alone, without a loving support system? In either case, your trading reflects what you see. A trader with a strong support system can face losses and problems in his trading. He knows that there are strong relationships from which he can draw support, understanding, and sympathy. He knows why he gets up in the morning and what his trading means to his life in a way that gives him motivation to succeed. A trader who contributes to the community feels good about himself and in turn, receives respect and appreciation. All of these positive forces contribute to the look of confidence, self-esteem, and security in his face. But, what happens if a trader has chosen unwisely in his personal life and has surrounded himself with toxic relationships or none at all?

Solution 1: First Develop a Good Relationship with Yourself, and Then Reach out to Others from Strength and Caring

A trader who has troubled relationships with others often has a troubled relationship with himself, which, in turn, usually results from a troubled relationship with his past. Healing wounds from the past is a major undertaking. Relationship issues, then, are just the symptom of deeper problems. There may also be addiction issues, and/or destructive attitudes and patterns of behavior to correct before a trader can move forward with good relationships. When deep, unresolved issues are the barriers to good relationships, much of the work needed to correct these problems should be done with the assistance or guidance of trained professionals. Otherwise, the bandages used to patch up the wounds will easily come unglued.

Solution 2: Get Involved and Get Out of the House

If the problem is not a deep one but simply a result of too much time spent trading and not enough living, then the time has come to find a way to get involved. Each community has a wealth of civic and social organizations, churches, clubs, adult education programs, charities, and activities of every kind. Something in all that mix will provide an isolated trader with an opening into the world of social interaction and friendships. The only requirement is that he must get out of his own small world and temporarily close the door behind him.

CONCLUSION

As difficult as it is to take a hard look in the mirror, the answers to many of your trading problems are right there for you to see. Each day we make choices about how we will take care of ourselves, our environment, and our relationships. If we consistently choose wisely, the results will shine forth in the mirror, and will be reflected in our trading. We will see the same confidence, energy, and success in our trading that we see in our faces. If we fail to make good and healthy choices, eventually we will see the same anemic and negative forces in our faces that we see in our trading. The choice is ours and the mirror does not lie.

Perfectionism creates stress, but working toward the best possible outcome allows you to have the best outcome possible.

Chapter 2

The Perfection Trap

Are you the perfect trader? Do you want to be? Do you seek the perfect trade, the one that unlocks all the doors to your dreams? Are you trying to create the perfect trading system? If so, you may also be unwilling to settle for anything less than the perfect house, perfect car, perfect spouse, perfect schools for your children, perfect vacation, and the perfect night’s sleep to refresh you perfectly for the perfect day to come?

If you could achieve all of that perfection in your life, would it make you happy? Content? A better trader? A better spouse and parent? A better human being?

MR. PERFECTION

Roy is a brilliant man with an enormous capacity to achieve success as a professional trader and in his personal life. The problem is that he actually achieves and produces very little because he is obsessed with doing everything perfectly and in having everything perfect. For that reason, Roy has spent much of the past 25 years working on creating the perfect trading system. Periodically, he allows himself to feel that his system is ready to trade and once again he trades in real time. At first, his system will perform … you guessed it … perfectly and he will make a killing in the market for at least a month and possibly more. At this point, he will call me and wax poetic about the perfection of his system. But shortly thereafter, his system will begin to generate some losses as well, and as soon as that happens, Roy’s trading goes into a steep decline. Within a brief time, he will have given back everything he made in the markets and sometimes a bit more.

Once this cycle ends, Roy will begin all over again to fiddle with his system until it is perfect and will create only profits and no losses.

And what about Roy’s perfect life? Well, Roy is not married because he has never found the perfect woman. He has had many girlfriends, but he falls out of love with each one as soon as he discovers her imperfections. He does not own a house because he could never settle on one—there was always a problem with each home in which he has lived. In fact, he has moved literally dozens of times throughout the course of his adulthood. When Roy begins a project, he works on it compulsively, attempting to make it perfect, which is impossible. So, he fiddles with it endlessly, unable to let it go. The list of his life’s incompletions continues to grow longer and longer.

PERFECTION AND SUCCESS

Achieving success in any endeavor is difficult enough without adding the complication of trying to achieve perfection at the same time. Anyone who has ever used a Microsoft product knows that perfection was never achieved, never even close. But Microsoft cornered the market. It got its customers close enough. And yes, it did so in a sloppy and non-intuitive way. But, it entered the market in a timely fashion. Had it waited to achieve perfection, it would have entered the race too late to win.

In trading, there is no perfection to be achieved. There is no perfect trading system, there are no perfect trades, and there is no perfect trader. Losses are a natural part of the process—in fact, you could almost say that losses are a perfect part of a trading system. The object is to limit the losses so that your gains outpace your losses. The object should never be to completely eliminate any chance of losses. This would mean that you had fallen into the Perfection Trap.

HOW IT ALL BEGINS

Roy’s own confinement in the perfection trap happened so young that he never had a chance to escape. His parents were critical and demanding from the day that Roy gained consciousness. Roy could never please them. Regardless of how hard he tried to be perfect, his parents would always find something with which to find fault. To make matters worse, they also withheld praise and approval. The result was that Roy learned at the most critical point in the development of his worldview that the most important thing in life was to achieve perfection.

Here are six of the major paths by which traders arrive in the perfection trap:

1. Perfection-demanding parents This, of course, is Roy’s background. But it is a common one. The faces may be different, but the result is the same. Parents are fearful of their own inadequacy at not being perfect. Since they were probably raised in an equally critical and approval-withholding environment, they do not see the harm they are doing in repeating the pattern on their innocent children.

2. Fear of failure and loss Some traders arrive at the point of demanding perfection in their trading after experiencing the pain of loss. Rather than dealing with those feelings and working their way through them, they foreswear ever experiencing that kind of pain again. But, the only way to never again experience a trading loss is to become the perfect trader. Each time the trader experiences another loss he is even more determined to be less vulnerable by being more perfect.

3. Praise for being perfect The reverse of the highly critical family life is the one in which the child is praised over and over again for achieving perfection—in school with perfect grades, in sports and performance situations, in solving problems, or achieving goals. This praise and recognition can come from parents, but it can also come from teachers, coaches, other family members and friends, and even from total strangers. The physiological rush that comes from that kind of praise can imprint on a vulnerable young mind the desire to experience the rush again and again. It is exactly like the reaction the brain has to an addictive drug.

4. Perfection-obsessed cultural forces If you watch television commercials, you will hear the word “perfect” used more and more frequently: perfect weddings, perfect vacation, perfect home, perfect lawn, perfect sunset. In fact, the word perfect is nearly ubiquitous in the advertising barrage of our senses. Spend a day home sick lying on your sofa watching commercial television and start counting the times that the word perfect comes up in the ads, not to mention the programming itself. Of course, it is not just television but all the media that are infected with this notion of perfection. The notion of perfection being the endgame for all human endeavors has taken on a value beyond its usefulness. But the result is a subconscious infection in the minds of far too many.

5. Feelings of insecurity and loss of value When a trader has deep-seated feelings of inadequacy, insecurity, and/or worthlessness, he will often attempt to overcompensate by attempting to achieve perfection in his work and in his environment. Achieving perfection will prove his worth and settle any doubts he or others may have about him. Of course, the harder he strives for perfection, the more insecure he actually appears to the outside world.

6. The fear of loss of control In a profession in which a trader can easily feel that he has little or no control, the achievement of perfection can quell any sense of not being in control. For the insecure, achieving perfection means that you have total control.

What all of these factors have in common, at their very base, is fear. The achievement of perfection makes an individual feel all-powerful. In fact, the achievement of perfection is as close to godliness as we can come. But the piper must be paid, as we will see …

FOR TRADERS: THE COST OF PURSUING PERFECTION

Just as the Pied Piper demanded his payment, it is easy to see what four of the not-so-hidden costs of the pursuit of perfection might be by looking at Roy’s experience, as well as those of other traders who are stuck in the Perfection Trap:

1. Difficulty in taking action To demand perfect trades that do not generate losses means that a trader will hesitate each and every time he should be taking action based on the signals he gets from his system/methodology. Instead of perfect trades, this hesitation can lead to no trades or bad trades. The demands of perfection can progress from hesitation, to difficulty in taking action, to inability to take action, which means that trading stops altogether.

2. Loss of self-discipline Instead of increasing self-discipline, the pursuit of perfection will ultimately undermine self-discipline by putting unreasonable pressure on the individual trader to be perfect. At first, the pursuit of perfection may guide a trader to a more and more disciplined practice. But as time passes, he will feel obliged to raise the bar higher and higher. In Roy’s experience, this usually resulted in a total collapse of his discipline, like a dieter who succumbs to bingeing after a diet that is too rigid. For a trader, this means the sudden abandonment of the controls on his trading, which can lead to significant losses.

3. Instability Like Roy who moved from place to place looking for the perfect environment for his trading and his living space, a trader seeking perfection will find that he is constantly uprooting his life. Whether he is perpetually on the move, remodeling, or changing spouses or partners, this trader’s life will be riddled with instability. Unfortunately for him, one of the most important cornerstones of a successful trader’s life is stability.

4. Unhappy, unfulfilled personal life The pursuit of perfection in trading will almost surely spill over into a trader’s personal life. The search for the perfect spouse will result in divorce, one after another. It will also result in the alienation of one’s children and friendships. A trader who feels that he has found the “perfect mate” will make his new love feel as though she is a queen. He will shower her with praise and presents, setting her up on a pedestal. But, she will be in for a rude awakening after he discovers that she is not a goddess, but only a human being. If stability is essential to a trader’s success, a happy and supportive home life is the basis of that stability.

GETTING OUT OF THE TRAP AND BACK ONTO THE GREEN

Although the allure of perfection is a very powerful one, as we have seen, it is possible to loosen its grip on a trader’s life. There are four steps to getting out of the perfection trap:

1. The first step in escaping the perfection trap, of course, is the recognition that you are in its possession. As you read this article, did you see yourself in it? Do you recognize your own need to be perfect, to have the “perfect things” in your life?

2. If you feel that you have a problem with perfection, take an honest assessment of your own perfection trap:

How long have you been in it?What makes you feel that you need to have perfection in your life (where did it come from)?How do you apply it to yourself? To your trading? To the significant others in your life?How does it affect your trading? What would change in your trading if you stopped trying to be perfect and just focused on following your trading methodology?What are you getting from trying to be perfect—what is the payoff for you? Is it a sense of being in control? Of being more worthy of love and admiration? Of reducing fear of loss and pain?

3. Once you have looked at the underlying causes and the nature of your own perfection trap, write a list of the things in your life that it has cost you. What have you given up? For example:

Peace of mindTolerance and/or unconditional love of the people closest to youFriends, family, and childrenEnjoyment of the process of tradingProfessional success

4. Now imagine what it would be like to give up the notion that you must achieve perfection. What would you gain? To answer that question, you can simply look at the list you wrote for step three. At this point, you must decide if the benefits of endlessly seeking perfection outweigh the cost and the potential gain of not trying to be perfect.

THE ALTERNATIVE

So, you are asking, if I give up my quest for perfection, what will I have in its place? Will the result be chaos, mediocrity, poverty, sloth, and crudeness all around me? Of course not! You can still exercise good taste and high standards. But you can allow yourself to be satisfied with a job well done or done to the best you can do. You will discover that very good and excellent can also bring you outstanding results. And now you can sit back and take pleasure in the foibles and shortcomings in others as they display their desire for “perfection.” You can relax and enjoy the process of trading. And best of all, you can learn to appreciate all that you have. The result will be that you can now trade with a sense of joy, with the knowledge that loss is coming and it is okay because it is built into your system, that you are supported by family and friends, and that each day is a gift. Oh, and by the way, your trading will almost certainly advance to the next step.

If you do not allow for silent moments in your life, looping stories of self-talk will interfere with you accomplishing you goals.

Chapter 3

Deep Freeze

At a recent professional basketball game, an eighth grade girl was preparing to experience the thrill of a lifetime. She had been selected to sing “The Star Spangled Banner” before a large and enthusiastic audience. Instead of experiencing the thrill of success, she forgot the words to the song and froze. The humiliation and embarrassment that swept over her added to the whirlwind of fear that consumed her. At that moment, the coach for the Portland Trail Blazers, Maurice Cheeks, appeared at her side and started to sing while encouraging her to follow. This kind and courageous man melted her freeze and she finished the song triumphantly.

Just as this young lady froze at the very moment she needed to be performing at her best, traders frequently find themselves freezing at the moment when they should be trading at their best. Instead of pulling the trigger to take that trade or exiting at the pre-determined stop, they freeze. The result is that they stand by and watch helplessly as a tremendous opportunity passes them by or their losses continue to pile up into a financial catastrophe. Afterward, filled with remorse, guilt, and self-recrimination, they search for reasons and justifications for their failure.

THE GREEN GIANT

Even the best traders can experience the Deep Freeze. In fact, the better a trader is and the longer he has been successful, the more likely it is that he will face a Deep Freeze experience on occasion. Top professionals in all fields of endeavor experience this phenomenon. An example would be Tiger Woods in a PGA Masters’ Tournament at Augusta, Georgia. He had his eye on his third Green Jacket. If he had won, it would have made him the only golfer to ever win the PGA Masters’ three times in a row, claiming the symbol of being the best. But even one of the most focused athletes in the world can experience deep freeze moments when thrown psychologically off course.

How could this happen to such a consummate professional who is so accustomed to winning and handling stress? This set of expectations is exactly what can undermine the concentration of a winner. When a professional is accustomed to winning, he can be completely thrown off his game when something unexpected happens that puts him at a disadvantage. This is what happened to Tiger. A slight misstep, a tiny loss of concentration that created an unexpected deviation in the layout of a shot resulted in him being less than Tiger. Since the failure to perform at his peak was no longer in Tiger’s mental player’s book, suddenly, he was off his game and off the mark for the third Green Jacket.

Once a professional trader finds himself off his game after a deep freeze experience, he may lose confidence. Unaccustomed to losing confidence, he will lose more confidence and become uncertain of his ability, fearful that he has lost the magic. He will become embarrassed that he is not winning, and ultimately, become less and less capable of recreating his personal miracles.

DOING TRADER FREEZE