Working With Beliefs

The next logical step is to systematically integrate the five fundamental truths into your mental environment at a functional level.  

At the most fundamental level the market is simply a series of upticks and downticks that form patterns. Using technical analysis, you can define these patterns as edges. Any pattern designated as an edge is simply an indication that there is a high probability that the market shall move in one direction or another. As conveyed earlier, this can create a mental paradox. The repeating patterns imply consistency but the reality is that each pattern is one of a kind. The underlying force behind each pattern are traders, and traders that contribute to the current pattern are dissimilar from the traders that formed any previous pattern. Consequently, the outcome for each pattern is random relative to one another. Our mental association mechanism makes this paradox exhausting to deal with.  

As discussed earlier, it is not the market that causes us to experience a negatively charged state of mind, it is our personal perceptions and interpretations of market information that cultivate emotional duress. If this is the case, then what specifies our perception and how we define and interpret information?  

Our ideologies working in conjunction with the association and pain-avoidance mechanisms act as a sizable force on our five senses, causing us to define, perceive, and interpret market information in a congruous manner with our expectations. Expectations, in turn, are based on our beliefs of what we presume to be true. Expectations are beliefs anticipated into some future moment. 

Every moment in the market is unique, yet the information being generated is similar in quality to something that already exists in our minds, the two sets of information (inside and outside) automatically become interlinked. This connection triggers a state of mind (confidence, euphoria, fear, frustration, etc.) that corresponds to whatever belief, assumption or memory the external information was linked to. This makes it seem like what is outside is precisely the same as whatever is already inside us.  

Our state of mind makes whatever we perceive externally seem indisputable. Nonetheless, our state of mind is always the outright truth. If you feel confident you are confident. If you feel afraid, then you are afraid. You can’t dispute the virtue of energy that is flowing through your mind and body at  any given moment.

This association process can cause us to believe we “know” what to expect from the market, when in reality there are always unfamiliar forces operating at every moment. The moment we think we know what to expect, we stop taking into account all of the unknown forces and possibilities created by those forces into consideration. As traders, we cannot afford to indulge ourselves in any form of expectations from the market. 

We can “know” what our edge looks like, and we can “know” specifically how much we will risk to find out if that edge is going to work. We can “know” that we possess “rules of engagement” to manage the trade & take profits. That is all we can certainly know. 

Making money routinely is a by-product of acquiring and mastering certain mental skills. The extent to which you understand this is the same extent to which you will stop focusing on the moolah and start focusing on how you can use your trading to master these skills.  

Consistency verdicts from a carefree, objective state of mind, where we make ourselves available to discern and act upon whatever the market is offering us (from its perspective) in any given “now moment”.  

To be carefree means being confident but not euphoric. You must harmonize anything in your mental environment that conflicts with the five fundamental truths & integrate these truths into your mental system as core beliefs.