Trading in the zone
Aligning Your Mental Environment
The key to trading in a calm and composed manner with the flow of the market is to have a firm belief in probabilities and edges. Once you have acquired this belief, you can forge a new relationship with the market, one that dissociates your trading from what it ordinarily means to be wrong or lose, and that prohibits you from perceiving anything in the market as threatening.
In countless ways, a state of mind, or perspective is like a software code. You may have umpteen lines of perfectly written code with only one flawed line or character. This minuscule flaw in relation to the rest of the code could ruin or alter the performance of an otherwise perfectly written system. The solution appears rather simple: fix the misplaced character and everything runs smoothly. However, finding the error or even acknowledging its existence can take considerable time and expertise.
When it comes to the ideal trading mentality, the world at large is a certain psychological distance away. Practically everybody starts out with a flawed software. As your perspective shifts and/or you integrate new beliefs with respect to responsibility and risk, this shift would be the equivalent of finding the flawed line or character in your mental software and swap it with something that works.
This internal shift is often described as the “ah ha” experience, a.k.a the moment the bulb switches on; a sudden epiphany.
Often, once the new information is integrated into our code, we feel this new part of our identity has eternally been a part of who we are. It then becomes challenging to believe that we were ever the way we were before we had the experience.
You may already be aware of what you need to know to be a consistently successful trader. However, awareness is not necessarily the same as belief. You must not presume that learning something new, agreeing with it, is the same as believing it at the level where you can act on the same. For instance, many phobias are fears where we may rationally know that there is nothing to be frightened about. However, our awareness that fear is not rational does not necessarily eradicate fear or phobia. These types of contradictory beliefs are ubiquitous in trading and represent flawed mental software. Discovering & debugging these contradictions is the key to move towards your eventual success.