Below is another article written by Dr. Van K Tharp, reprinted with permission.
He is a well known figure in the world of financial markets. I find his works to be very useful to my trading venture.
So, traders out there, do read this article and absorb as much as you can.
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Your Beliefs About Trading
By Van K. Tharp, Ph.D.
You do not trade the markets—no one does. Now that might sound surprising to many of you. But what you really trade are your beliefs about the market. Furthermore, your ability to do so is tempered by your beliefs about yourself.
I’d like you to write down your beliefs about yourself. These beliefs will typically start with words like
- I am
- I feel
- I experience myself as
Now if this sort of exercise is new to you, when you first do it, you’ll probably write down a bunch of your positive attributes. Furthermore, you’ll probably have trouble writing down more than twenty or thirty such beliefs. But you probably have hundreds.
However start your list. Let’s say you think for about five minutes and you come up with the following items:
- I am a fairly good trader.
- I feel positive about my potential.
- I like myself.
- I am fairly astute in thinking about the markets.
- I am intelligent.
- I am creative.
You know there are a lot more, but after 15-20 minutes of thought that’s all you can come up with. Okay, that’s a start. But now I’d like you to continue the exercise each time you make a trade, either opening the position or closing it.
Let’s say it’s Monday morning and you open positions in the market. After doing so you continue to assess yourself and you notice two things:
- I’m feeling really excited.
- I like fast moving stocks.
Okay you’ve gained some insight about yourself.
By mid afternoon the market is in a steep decline and three of your stocks are down $500 on the day. Now you start thinking to yourself:
- I feel angry about that position. I just got in and it’s going against me.
- I’m not going to let them take advantage of me this time. I’ll hang on until it comes back.
Notice that you’ve just gathered some more insights about yourself. Keep this up until you’ve written down 100 or more statements that reflect you and your feelings. When you do, you’ll have a lot more insight about how you produce your trading results. And you will be starting on your way to becoming a peak performance trader.
About the Author: Trading Coach Dr. Van K. Tharp, is widely recognized for his best-selling book Trade Your Way to Financial Freedom and his classic Peak Performance Home Study Program for traders and investors. Visit him at www.iitm.com for a FREE trading game or to sign up for his free weekly newsletter.
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Disclaimer: This article is not a specific nor general advice on managing or investing your money. This article does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.
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