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Trading in the zone

Consistency Is A State Of Mind

Winning and consistency are a mental state in the same way that having fun, happiness and satisfaction are. Your state of mind is a direct by-product of your perspective, beliefs and attitudes.  


Traders who are consistently successful are consistent as a natural articulation of who they are, as within so without. They do not have to feign consistency; they are consistent.  


Ponder back to the best of your trades, they were easy and effortless. You did not seek to make them easy & effortless; they were naturally easy and effortless. At that moment, you were available and receptive to the opportunity flow of the market. When you are with the flow, you don’t have to try given that everything you know about the market is available to you.  


To be consistent you have to learn to reflect about trading in such a way that you are no longer susceptible to conscious/subconscious mental processes that obscure or block information on the basis of what will make you jubilant, or to avoid pain.  


Understanding Risk

Other than the many issues surrounding responsibility, there is nothing about trading that is more pivotal to your success and more misunderstood than the concept of accepting risk. Most traders erroneously presume that because they are engaged in the inherently risky activity of trading that they are accepting the risk. This assumption cannot be further from the truth.  


Accepting risk signifies accepting the consequences of your trades without emotional discomfort or fear. This requires that you must grasp how to think about your trading and your relationship with the markets in such a way that the possibility of being wrong, missing out, losing, or leaving money on the table does not cause your mental defense mechanisms to kick in thus taking you out of the opportunity flow.  


By wholeheartedly accepting the inherent risk, you make yourself available to take advantage of an opportunity, you do not impose any limitations/ expectations on the market’s behavior. You are perfectly content to let the market do whatever it is going to do. As the market moves, it will create certain conditions you define and perceive as opportunities. You act on these opportunities to the best of your expertise, yet your state of mind is not dependent upon or overwhelmed by the market’s behavior.  


Once you learn to create a state of mind that is not overwhelmed by the market’s behavior, the struggle shall cease to exist. When the internal struggle ends, trading becomes effortless. At that point you can take full advantage of all of your skills, analytical or otherwise to eventually realize your abundant potential as a trader.  


How do you then accept the risks of trading without emotional discomfort and fear, when at the moment you perceive risk, you simultaneously feel discomfort and fear? How do you remain confident and pain-free when you are absolutely convinced you can be proved wrong, lose money,  miss out, or leave money on the table? Thus, these feelings of fear and discomfort are completely justified and rational. Each of these possibilities become indubitable the moment you interact with the market. 


Many traders presume that the creme la de creme traders somehow neutralize their fears with an inordinate amount of courage, nerves of steel, and self-control. As with many attributes of trading this too does seem to make sense, however most of the time this is not the case. 


Any of these characteristics might be present in the best of traders. But what is not true is that these characteristics play a primary role in their superior abilities. Requiring courage, self-control, nerves of steel would imply an internal conflict where one force is being used to counteract the effects of another. Any extent of internal struggle, trying, or fear associated with trading takes you out of the moment and flow, thus waning your results.  


The ability to accept risk the way the pros do i.e. not perceiving anything the markets do as threatening, is where professionals separate themselves from the masses. 


No threat, no fear, no fear, no need for courage.


If you are not anxious why else would you need nerves of steel? A handful of people start their trading careers with the appropriate beliefs and attitudes about responsibility and risk. Most traders go through the cycle of the novice trader: We start carefree, then become nervous, and our fears continually diminish our potential.  


Traders who finally break through the unending cycle and ultimately make it are the ones who learn to stop avoiding and start embracing the responsibility & risk. However, most of the traders who successfully break this cycle make the shift in thinking after experiencing relentless pain from large losses that it has the positive effect of stripping away their illusions about the nature of trading.  

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Units 7/19