If I asked you to list the things that you want, my bet would be that your list would cover a lot of ground.  No doubt in addition to the many items that would be good for you, if you’re anything like me there would be a number of items that might not be so good for you.  For instance, food items on that list might include ice cream, cake, candy or burgers with lots of fries and let’s not forget the occasional big gulp.  Of course, it doesn’t stop there, you may want to have that extra cocktail or you may want to drive a little too fast, or sleep in when you have important matters scheduled, or move that stop, exit prematurely or chase that trade.   Now, what do all of these things have in common?  All of these behaviors, in addition to not being very good for you, leave you feeling better…even if for only a brief period.  Granted, some of these behaviors could be considered mild compared to others; that is, until we look a little closer.  Sugar, fats and chemicals found in processed foods have been shown to put your health at high risk.  Alcohol and it’s dangers have been well documented.  When you get behind the wheel you are driving a weapon and speed kills.  Missing important appointments need no explanation.   And, must the dire consequences of trade rule violations be spelled out.  Now, before you think that I’m trying to be some kind of killjoy let me assure you that I’m just as guilty of all of these from time to time and I’m a firm believer in moderation…even moderation.  But, this is not my point.  The point here has to do with the fact that humans wants can vary greatly; and they can have competing interests.  And, of course there are those who encourage you to go after those things that you want.  But, OK, wait for it…it’s not about what you “want” it’s more about what you want “most” as in what-matters-most.

Let’s face it, it does feel exciting to think that we can avert the perceived “disaster” of a loss by moving or taking out a stop; or that we can jump onto a shooting candle and make a big profit.  However, even though the interests involved seem on target; that is, they seem to be about making more profit and making more profit appears to be a good thing; it is in fact a sham.  The competing interests here actually boil down to short term pleasure (temporary relief) against long term results; that is, protecting capital and creating consistency in implementation, execution and keeping commitments – all high on the what-matters-most list.  So, as you identify and clarify those wants, keep in mind that the crucial factor lies in what you want “most.”  The most list includes personal growth, healthy relationships, integrity, honesty, and to be more specific with trading those behaviors that build capacity for emotional strength and endurance like setting aim to always be in a position to skill build in your trades.

I had dinner with one of my good friends last night who happens to also be a trader.  One of the topics of conversation revolved around the fact that trading in some respects involves entropy.  Loosely, entropy is a measure of the amount of energy in a physical system not available to do work. The amount of entropy is often thought of as the amount of disorder in a system.  Entropy is often used roughly to refer to the breakdown or disorganization of any system: “The committee meeting did nothing but increase the entropy.” (Dictionary.com).   So, let’s apply this to trading.  As a conscientious trader with some years under your belt, you aim to ensure that you are supporting your ability to remain focused on what-matters-most and resolving to stay aligned in body, mind and emotions to maintain system energy high towards optimal implementation and execution.  Then as time goes forward you have 2, 4, 6, maybe even 8 weeks of peak performance trading; but the more time you go like this the entropy of your system is breaking down your resolve and causing a disorganization in your focus resulting in an increasing fragmentation of your efforts.  Then, BAM, that trade happens where you have effectively imploded…and you violate every rule in your book.  You can’t help yourself, and end up losing a third of your account and you’ve wiped out all of your gains over the past eight weeks!  You feel like #@!*^%, and you don’t know what happened.  The point here is to realize that this condition is not only possible but highly probable.  To begin with, you must use your journal and document those thoughts, emotions and behaviors (internal data) and market situations (mechanical data) that lead to this happening in order to anticipate the future occurrence of the breakdown and successfully address it.  By knowing what can bring it on and remaining vigilant and diligent you are able to incorporate mental and emotional tools to combat it.  This is paying attention to and embracing what you want “most.”  It takes an understanding that our systems never remain constant.  Just as we get older we tend to breakdown, it becomes imperative to consistently and constantly do those things that support the system by optimizing our internal and external resources; for instance, meditation, visualization, using affirmations, nutrition, and exercise to name a few.  These should be activities of daily living (ADL’s) just like bathing, brushing your teeth, and paying your bills.

So, your consistent trading success is not about what you want but what you want most.  Trade in your best interests and aim to stay there.  Also, get my book, “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading

Your brain is the most awesome mechanism in the Universe … as we know it.  Babies, both pre- and post-natal are metaphorical sponges of data and information.  Also, brains have the ability to adapt to disease and injury by having one part of the brain take over the functions of another part of the brain that has been compromised; for example disabling injuries to the speech centers of the left brain can be “learned” by the right brain as a compensatory measure.  Additionally, as late as about 30 – 40 years ago it was thought that once brain cells were lost or destroyed through any number of ways, not the least of which being alcohol intoxication, you would not and could not recover; and that brain cells once lost were gone forever.  But, we now know that through training the brain can adapt, change and even “grow” new brain cells well into the senior years and beyond in response to being challenged through illness or injury.  In fact, the brain’s ability to reorganize itself by forming new neural connections throughout life is called “neuroplasticity.”  Each individual brain cell is made up of an axon  and dendrites, and is linked to one another by a small space called the synapses. The word plastic means to mold, sculpt, or modify. Neuroplasticity refers to the potential that the brain has to reorganize by creating new neural pathways to adapt, as it needs. In other words it is the capacity of neurons and neural networks in the brain to change their connections and behavior in response to new information, sensory stimulation, development, damage, or dysfunction.

Although neural networks also exhibit modularity (the degree to which a system’s components may be separated and recombined) and carry out specific functions, they retain the capacity to deviate from their usual functions and to reorganize themselves. In fact, for many years, these networks were thought to be etched in stone, and that certain functions were hard-wired in specific, localized regions of the brain which meant that any incidents of brain change or recovery were mere exceptions to the rule. However, since the 1970s and ’80s, neuroplasticity has gained wide recognition as a mainstream concept.  According to the theory of neuroplasticity, thinking, learning, and acting change both the brain’s functional anatomy and its physical anatomy; it is constantly changing as it interacts with the environment.

Training is an important concept to embrace with the notion of neuroplasticity.  You know that your body will respond to the stress of consistent exercise that pushes your limits causing the system to go out of homeostasis (the tendency of a system, especially the physiological, to maintain internal stability, by responding to any stimulus that would disturb it) and adapt thereby developing the capacity for greater strength and endurance.  The same principle holds true for your mind/brain; the neuroplasticity of your brain is what responds when you challenge your thinking, feeling and doing in ways that take you out of your comfort zone. This type of response is intentionally feeling and remaining uncomfortable; that is, for example, when you honor your stop and refuse to move it in the face of the price action inching towards it or watching a blast-off candle go higher and higher without giving into the urge to chase the trade or refusing to exit a trade prematurely just to grab a tiny profit because you’re afraid to stay in and risk losing again.  In that moment your discomfort is in the service of your highest and best goals.   There are many other ways to train your mind/brain to begin to restructure and reorganize itself in the interests of your A-Game trading.  Here are a few:

1. Remain in the moment and in the Now of the trade allowing you to put yourself into a position of alignment of body, mind and emotions going in the same direction and for the same goals. When you are aligned it is more likely that you will be able to effectively deal with internal conflict that comes from thoughts, beliefs, biases and emotions that are contrary to your objectives.
2. Monitor what you are telling yourself. Many of your thoughts are out of awareness or unconscious to you.  So, it is important to track your thoughts and when you become aware that you are thinking or saying negative, destructive and devaluing things about the market or more importantly yourself, it is critical that you change them from being unsupportive to positive and proactive.
3. When you become aware that you have done something that is not in the best interests of the results that you want, document the specifics and from time-to-time revisit the journal points in order to uncover the bad patterns of thinking feeling and doing that make up negative habits. In this way you position yourself to reprogram faulty behavior.
4. Embrace your negative emotions for they have very valuable information associated with them. When you do this through appreciative inquiry (gently questioning your motives and thinking that were behind that negative emotion) the information that you uncover will take you step-by-step towards making the changes necessary to get the results that you want.

The preceding points are only a few of the ways that you can challenge the status quo of your brain/mind and begin to train it so that it begins to work for you rather than against you.  Neuroplasticity is a powerful component of the most awesome machinery in the known Universe.  Learn to use it, train yourself in methods that will item-by-item, trade-by-trade take you from where you are in your trading to where you want to be.  For more insights on how to bring and keep your A-Game at the platform get my book; “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading

Mike started out in a heck of a mess.  He had become frustrated, frazzled and fragmented due to his inability to remain focused on the charts and in his emotions.  Mike noted his confusion and lack of focus.  He had been trading for a few hours since the open without a break.  When he looked over the trades he had taken already, they were slightly scattered with regard to style; but, they did reflect his emotional temperature, which was cold and lacked his usual intensity.  Just then Mike decided to take a time-out and regroup his strength, focus and tenacity for doing what was in his best interests.  Mike left his platform, sat in the corner and in a few breaths he was in a much better zone.  When he returned about 25 minutes later, he was a different person.  The frustration and fragmentation that Mike had endured only a short while ago, was no longer evident.  He reanalyzed his levels and redrew his zones.  Mike had become much more positively intense about the details of the trade without sacrificing the big picture.  What caused him to keep his cool and remain focused on what-matters-most?  Well, those 25 minutes were spent meditating; and in that short time he had recalibrated his mental attitude, shifted his emotional state and had centered and grounded his being in the Now.  He had been practicing a daily meditation routine for about a year and it had greatly increased his ability to manage his emotional state by remaining patient.

Bringing your A-Game to your trading platform and ensuring that you are in the Now of the trade is crucial to getting the results that you want.  You’ve got to be able to focus with intention and attention in order to decrease the pain associated with being out of control.  There is great value in being aligned, centered and grounded in order to optimize all of your system’s resources toward seeing reality for what it is, being on the right side of the order flow, and dancing with the price action by following its lead.  Among the many ways that help you with alignment, centeredness and being grounded, few are as powerful as meditation.  The usefulness of meditation has been scientifically documented in hundreds of studies with regard to physiological, mental, emotional and behavioral benefits.  Some of include sharpening attention, lowering heart rate, lowering stress levels, easing anxiety, increasing patience and reducing susceptibility to fear and greed.  Meditation has covered the entire planet throughout history with differing configurations; however there is a common theme of calming, centering, aligning and grounding the mind/body.  Meditation is a journey with no destination, a journey that enters into the depths of heart and mind to open the self to a deeper awareness and just “being.”

To be fully present is one of the major aims of meditation.  Being fully present means the mind/body system is vibrating in this moment, without internal or external distractions.  Being fully present means the focus is on the task at hand while remaining on purpose, and on target.  So often while trading you are everywhere but where you should be, that is, focused on what is taking place right now.  Distractions can come in the form of negative emotions like fear, greed, and anxiety, all of which can distort perception and make illusions seem real.  Consistent meditation hones an appreciation for just “being,” without timetables, goals or effort.

Mindful meditation is promoted by John Kabot Zinn in his book, Full Catastrophe Living.  Mindful meditation involves sitting, standing or walking.  If you are sitting, do so with the intention of “sitting with dignity” upright.  Now, take your attention focusing it on your breathing.  The point is to focus the attention and let your breathing proceed naturally.  Allow any thoughts to come and go with an intention of un-attachment to any thought.  The breath is especially helpful to come back to whenever you find that you are attending to thoughts.  The breath is very important, as it is a cleansing action while helping to dilate blood vessels and send more oxygen to the brain, which has a calming effect on the entire body.

It is important to be attuned to the process not as “trying” but “being” in order to allow the mind/body to resonate with the stillness and quiet.  It is said that for every hour of meditation, the body gets the equivalent of 4 hours of rest. As you breathe let go of any thought, care or issue and, when it returns, acknowledge it and allow it to be there without judgment. This may be difficult at first, but just keep the intention strong and in time, you will be able to sit in quiet stillness with only the sound of your breathing as thoughts come and go.  Eventually your ability to just “be” will become stronger and you may find you are held captive less and less by unruly thoughts.

Practice meditation at the same time everyday to help instill the habit and routine, especially when beginning.  It’s a perfect way to start your day.  It can rejuvenate, align, invigorate and charge your system, infusing you with a sharpened sense of attention.  It’s also a wonderful way to end the day to wind down, de-stress, realign, shed tension, calm the system, and generally defuse negative energy.  A mediation break at lunch is an excellent way to maintain balance and weed out distractions by remaining on purpose and on task.  Actually, any time might be the best time for you.  There is no set time interval to meditate but, generally speaking, 20 to 30 minutes is what many use.

Your trading requires your best.  Trading is tough and as you meditate, with consistency, you will develop greater capacity for patience, calm, sharpened focus and being less distracted by negative emotions.  Diligent and consistent meditation will help you to reduce distorted judgment by building emotional strength and detachment.  Trading is almost exclusively a mental art.  During your trading process you are preparing, analyzing, processing or executing a trade; all of which require mental and emotional tools.  You’ve got to have mental and emotional tools in your tool belt, otherwise it’s like driving without a steering wheel; you will lose your way and crash and burn without them.   Put the steering into your trading.  Ask your Online Trading Academy Representative for more information.  Also, get my book, “From Pain to Profit: Secrets of the Peak Performance Trader.”

Joyful Trading

When you are in a trade what are you paying attention to?  In other words what is motivating you?  You may be like so many other traders around the planet in that you trade, and trade, and trade.   In fact, you may have daily or trade session targets, but rather than discontinue trading when you hit those daily targets you continue to trade and more times than not end up giving back those gains and as well taking a loss for the day.  Now, the logical inference is that if you had a target amount of profit and hit that profit target you should stop trading.  So, what compels you to continue?  Actually, it could be a number of things like the belief that the trend is going strong and why not stay on the train or feeling “lucky” like this is your day and why not take advantage of it.  The underlying reason is quite simple … it has to do with greed.  When we look at greed, most of you will recognize the fact that it is so ubiquitous for traders,  and that you have experienced it so way too often.  However, did you also realize that greed is just the flip side of fear?  Greed is simply the fear of not having enough or as much as you want along with the impatience of wanting it all right now.

Trading is ultimately about money.  The trader wants to expand his capital.  But, here is the paradox…trading is difficult and arguably the most challenging business venture on the planet because of the psychological turmoil that is activated in the trader when he enters the trade – the fear of loss, the fear of being wrong, and the fear of failure all distort judgment and distract thinking.  The point is that consistently “successful” trading is “not” about making money in any one trade.  Consistently successful trading is a process; a process that requires a devotion to preparation, analysis, planning, implementation and execution.  Because trading is so difficult, like any similarly arduous endeavor, it requires an activation of all of your resources (internal and external) to bear on the process.  You only have a total of 100% of attention to focus on what-matters-most.  If you are overly invested in P&L then you are diminishing that valuable percentage of attention in direct proportion to the amount of distortion and distraction caused by the intensity of fear and greed.  By “overly invested” I mean that when you are in the trenches of a trade it is not the time to be investing your attention and focus on money because money is not a part of the process, it is a desired outcome.  In this perspective, the process is all important and anything else is a distraction.  One of the more important points is to be dispassionate about the outcome while you are in the throes of the effort.  If you are so intently focused on the result of your process during the process, you are necessarily diminishing your attention and your ability to keep firing on all cylinders as you move toward the desired result.

I have often talked about having a sensory rich vision of what you want to achieve.  This is a very powerful tool to connect with the passionate white-hot energy of why you want to be successful as a trader. It is your trading purpose, which ties the what-matters-most in your life to the what-matters-most in the trade.  The sensory rich vision is a tool to “refuel your perseverance” at the beginning of your trading session and during those times when your energy and your ability to sustain emotional strength and endurance in the trade are waning.  This is when you want to deliver that shot of adrenalin   to the system.  However, when you are in the game and on the court, this is not the time to stop and drink Gatorade or get a breather or fixate on whether or not you are winning or losing.  When you are in the heat of battle, this is the time to engender a fierce focus on what you are thinking, feeling and doing as it relates to the process of trading; which is to continuously be in a position of “skill optimization.”

Skill optimization is when you have consistently nurtured and built your skills; i.e., your abilities your “chops.”  Skill building is one of the only things that you should “always” be focused upon in your trading process.  The skill building formula is P + ER + FL + H where P = protocols (strategies, procedures, set-ups and rules); ER = effective routines (making your behavior consistent – erratic behavior diminishes to the point of dissolution); FL = feedback loop (where you measure, verify and document whether or not your protocols and routines are providing the expected hit rate); and H = habituation (taking the entire process and repeating it religiously until it has become unconscious competence).  The skill building formula if followed religiously is where you have developed capacity for emotional strength and endurance to do what is in the interest of your highest and best trader each and every time you open a trade.  Employing the skill building formula is where you take the process of trading and master it.  This is what consistently successful trading is about; that is, process mastery.  Trading moment to moment is not about P&L even though it is true that you trade to increase your capital.  Process mastery cannot be achieved without the accompanying supportive mindset.  Your mindset is the sum total of your thinking (beliefs, values, and internal conversations), your emotions, and your behavior.  All three of these variables (T+E+B) are intimately involved in your mindset and your results are direct reflections of your mindset.

So, if you are committed to doing your best in order to make money in your trading process, you must de-focus your attention from the money as you trade and intentionally re-focus on mastering your trading process.  This necessarily means that you must develop your mindset.  You must become and remain self-aware so that you are able to increase the mindfulness of your thoughts, emotions and behaviors.  You must create consistency in your mechanical data (everything that relates to the mechanics of the trade – your preparation, planning and execution); and in your internal data (learning mental and emotional tools to manage your thoughts, emotions and behavior) in order to develop capacity for emotional strength and endurance during the trade.  This process is no small task and it takes a willingness to be uncomfortable in order to grow and develop the necessary capacity for emotional and strength and endurance.   For more information about this and other topics that can help your trading, get my book, “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading,

Think about your trading for a moment; what is motivating you?  You may be like so many other traders around the planet in that you trade, and trade, and trade.   In fact, you may have daily or trade session targets, but rather than discontinue trading when you hit those daily targets you continue to trade and more times than not end up giving back those gains and as well taking a loss for the day.  Now, the logical inference is that if you had a target amount of profit and hit that profit target you should stop trading.  So, what compels you to continue?  Actually, it could be a number of things like the belief that the trend is going strong and why not stay on the train or feeling “lucky” like this is your day and why not take advantage of it.  The underlying reason is quite simple … it has to do with greed.  When we look at greed, most of you will recognize the fact that it is ubiquitous for traders and that you have experienced it way too often.  However, did you also realize that greed is just the flip side of fear?  Greed is simply the fear of not having enough or as much as you want along with the impatience of wanting it all right now.

Trading is ultimately about money.  The trader wants to expand his capital.  But, here is the paradox…trading is difficult and arguably the most challenging business venture on the planet because of the psychological turmoil that is activated in the trader when he enters the trade – the fear of loss, the fear of being wrong, and the fear of failure.  The point is that consistently “successful” trading is “not” about making money in any one trade.  Consistently successful trading is a process; a process that requires a devotion to preparation, analysis, planning, implementation and execution.  Because trading is so difficult, like any similarly arduous endeavor, it requires an activation of all of your resources (internal and external) to bear on the process.  You only have a total of 100% of attention to focus on what-matters-most.  If you are overly invested in P&L then you are diminishing that valuable percentage of attention in direct proportion to the amount of distortion and distraction caused by the intensity of fear and greed.  By “overly invested” I mean that when you are in the trenches of a trade it is not the time to be focused on money.  One of the more important points is to be dispassionate about the outcome while you are in the throes of the effort; that is to do and be the best that you can during the trade and to resonate with the reality of what your focused efforts will attract.  In other words, when that final outcome of the trade has transpired this reflects reality…it is what it is.  If you are so intently focused on the result of your process during the process, you are necessarily diminishing your attention and your ability to keep firing on all cylinders as you move toward the desired result.

I have often talked about having a sensory rich vision of what you want to achieve.  This is a very powerful tool to connect with the passionate white-hot energy of why you want to be successful as a trader. It is your trading purpose, which ties the what-matters-most in your life to the what-matters-most in the trade.  During the civil rights era, there was a saying “keep your eyes on the prize.”  This may seem contradictory; to say on the one hand you must be dispassionate about the ultimate outcome and have a sensory rich vision of the outcome.  Actually, the sensory rich vision is a tool to “refuel your perseverance” at the beginning of your trading session and during those times when your energy and your ability to sustain emotional strength and endurance in the trade are waning.  This is when you want to deliver that shot of epinephrine to the system.  However, when you are in the game and on the court, this is not the time to stop and drink Gatorade or get a breather or fixate on whether or not you are winning or losing.  When you are in the heat of battle, this is the time to engender a fierce focus on what you are thinking, feeling and doing as it relates to the process of trading; which is to continuously be in a position of “skill optimization.”

Skill optimization is when you have consistently nurtured and built your skills; i.e., your abilities your “chops.”  Skill building is one of the only things that you should “always” be focused upon in your trading process.  The skill building formula is P + ER + FL + H where P = protocols (strategies, procedures, set-ups and rules); ER = effective routines (making your behavior consistent – erratic behavior diminishes to the point of dissolution); FL = feedback loop (where you measure, verify and document whether or not your protocols and routines are providing the expected hit rate); and H = habituation (taking the entire process and repeating it religiously until it has become unconscious competence).  The skill building formula if followed religiously is where you have developed capacity for emotional strength and endurance to do what is in the interest of your highest and best trader each and every time you open a trade.  Employing the skill building formula is where you take the process of trading and master it.  This is what consistently successful trading is about; that is, process mastery.  Trading moment to moment is not about P&L even though it is true that you trade to increase your capital.  Process mastery cannot be achieved without the accompanying supportive mindset.  Your mindset is the sum total of your thinking (beliefs, values, and internal conversations), your emotions, and your behavior.  All three of these variables (T+E+B) are intimately involved in your mindset and your results are direct reflections of your mindset.

So, if you are committed to doing your best in order to make money in your trading process, you must de-focus your attention from the money as you trade and intentionally re-focus on mastering your trading process.  This necessarily means that you must develop your mindset.  You must become and remain self-aware so that you are able to increase the mindfulness of your thoughts, emotions and behaviors.  You must create consistency in your mechanical data (everything that relates to the mechanics of the trade – your preparation, planning and execution); and in your internal data (learning mental and emotional tools to manage your thoughts, emotions and behavior) in order to develop capacity for emotional strength and endurance during the trade.  This process is no small task and it takes a willingness to be uncomfortable in order to grow and develop the necessary capacity for emotional and strength and endurance.  But, if you believe in yourself and take it one step at a time, you’ll get that prize…the ability to trust in your plan, trade your plan, follow all of your rules, keep all of your commitments and move on when the trade is over.  This is what we teach in the Online Trading Academy “Mastering the Mental Game” Online and On-location courses.  Ask your OTA representative for more information.  Also, get my book, “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading,