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At 11:00 AM 3/2/98 +0200, andy.abraham. wrote:
>
>Firstly one must know why he is trading and be responsible for all his
>actions.Your
>psychology is the MOST IMPORTANT factor determining your trading
>results..It is
>stated 95% of success is determined by psycology and ONLY 5% by your
analysis
>or trading system.. Ironically most spend most time in trying to perfect
>that ultimate
>system when the TRUTH is within all of us.
>
>This TRUTH we are talking about is simply DISCIPLINE..The ability to
>properly execute
>trades ..most traders find it much easier to identify something in the
>market as an opportunity
>rather than act on it..
>
Here's another truth that is both profound and simple:
"Fear is the result of an undisciplined mind." - Charles Drummond
-- How's about THAT for self-responsibility!
(I would add that all emotional disturbances are the result of an
undisciplined mind. It's just that fear is among the foremost of emotions
that we create in ourselves.)
Here's a suggestion for practicing a simple form of discipline: Find a
simple system that makes money over time (doesn't have to be great or
immensely profitable, mainly simple), and JUST PRACTICE EXECUTING THE
TRADES! Nothing else. No thinking, no analyzing, no nothing except
execution. Commit to doing this for at least 20 trades, no matter what.
Through this process make your primary focus to monitor your psychological
states and reactions. Maybe you'll find out something about yourself - the
most important element in trading.
David Cicia
>It really doesn't matter the general premise for trading..Either being
>discretionary or utilizing
>a mechanical system.( However we believe much more in non discretionary
>mechanical)
>The key is developing experience and confidence. But the next question is
>how does one
>develop this level of confidence. Some say paper trading is a learning tool
>for utilizing a
>methodology but it is hard for us to agree. Real money is not on the line
>nor are those
>emoitions we all must deal with.. An analogy is a place kicker of a
>football ..he can practice
>all the time but when the stadium lights are on he misses the goal posts ..
>The pressure
>overwhelmed him..Unfortunatly the same happens in trading..Fear ..Greed
>take over our
>perfect thought out trading plan.
>
>We must overcome ourselves and really TRUST ourselves and our methodologies
>..systems
>We must not be too hard on ourselves.. we are learning and really learning
>about ourselves.
>Would you be angry at a child learning to ride a bicycle?? Hopefully not..
>
>Trading takes time ..energy and emotional fortitude..In short
>Discipline..There are no easy
>shortcuts. If one is fortunate he will find a mentor.. He will learn from
>that mentor many things.
>One will probably learn from a successful trader that he isn't afraid to
>take losses(almost cherishes
>them)..that he knows what he has to do and actually pulls the trigger and
>does it.
>
>A successful trader knows why he is in the trade and also where the trade
>doesn't work.
>He doesn't attach any sense of personal worth on a trade ..He is no lesss a
>person if the
>trade doesn't work..Interesting we are saying the trade doesn't work ..not
>that we made a
>mistake.. the only mistake is not following your trading plan. Please note
>it doesn't take
>very many trades that you don't follow a plan to end your career as a trader.
>
>There are many trading systems that consistently take money out of the
>market. Ironically
>many are very simple in nature. HOWEVER THERE IS A TREMENDOUS DISCREPANCY
>BETWEEN SUCCESSFUL SYSTEMS AND SUCCESSFUL TRADERS. Unfortunately many
>people who trade systems try to outguess their systems. But guess what this
>doesn't lead to
>success but frustration and confusion. As Mark Douglas has so profoundly
>stated " MOST
>PEOPLE WANT A GUARANTEED OUTCOME WITH SOME MOMENTARY SUSPENSE".
>
>What we are trying to say is that there are many methodologies and ways to
>make money
>in the market .. THERE IS ONLY 1 WAY TO LOOSE IN THE MARKETS AND THAT IS
>NOT TO FOLLOW YOUR SYSTEM. One must think in probabilities and that anyone 1
>trade doesn't mean anything. One also must bear in mind that as in any
>business(this is a business)
>ample capitalization is in order..Without this success is doubtful. Once
>one is believing in
>his methodology discipline will be formed. Overtime commitment to trade
>your system becomes
> second nature. You will take all signals ..not second guess them and then
>you have a
>VERY GOOD CHANCE OF SUCCESS.
>
>In the past paragraphs we discussed 95% worth of psycology .. The last 5%
>is the systems themselves
>As said there are numerous ..One can be a daytader .. less capital
>intensive but more time
>consuming and emotionally draining.. trendfollower .or even be
>countertrend. The trader
>can be discretionary or a mechanical system follower. We feel to be
>ultimately successful
>one must be well capitalized and trade various non correlated markets. The
>trader must be
>on guard at all times.. ANYTHING CAN HAPPEN AND THE TRADER MUST BE PREPARED.
>
>Our stated goal in the beginning of this report was to explain what it
>takes to be a successful
>trader.. Now it is up to one and be introspective and really decide what
>they want from the markets..
>
>Andy Abraham
>Angus Jackson Trade Center
>www.angusjackson.com
>
>
>
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