Develop and Open Mind and Gather Market Information - Step 2
Step 2 of system development according to Tharp in Trade Your Way... involves the mindset that one brings into trading. He stresses the importance of having an open mind and being aware that your beliefs shape the way you perceive the markets, and you are trading according to those beliefs. I don't think these are necessarily mind-blowing ideas, but its very easy to confuse our beliefs or ideas with incontrovertible truths. These beliefs become so ingrained that they become our reality, even though the true nature of things could be completely different.
The first thing I think of when I read those lines are related to what mental health practitioners refer to as "self-talk". Once we begin to have thoughts, ideas, and beliefs about ourselves, they become a "truth" of how we perceive ourselves, and they influence the way we conduct our lives. It essence, those beliefs become a self-fulfilling prophecy.
I tend to be very hard on myself at times and so I know the propensity for negative self-talk for me is high. I know Tharp's ideas are geared towards beliefs about the market, but I don't think you can examine your approach to the market until you have probed your own beliefs about yourself. For me, it is important to remind myself that I have not failed or am not a failure because some of the ambitions I've had for my life have not come to pass. I also have to remind myself that just because the past didn't work out as I had hoped, it does not mean the future is permanently inaccessible and pointless to hope for.
I'm not sure how that would impact my trading, other than to think I'll need to remind myself that the most important trade is the one I'm about to make, not the (potentially) several losses that preceded it. In the course of developing a system my goal is to find a system in which I can place confidence so I can believe that its positive long-term expectancy will overcome the sure-to-come losing streaks.
I think my beliefs about the market support a positive outlook that will enable me to be successful with trading. I don't believe the market rewards or punishes, nor will it act with any specific malice toward me. Its simply a manifestation of expectations and a record of opinion, essentially. My job isn't to be right or wrong about the markets, but rather to follow it, to just flow with it.
Tharp recommends several books, including Market Wizards, which I think I may already have. I'm going to look for some of the others to aid me in gathering market information. I actually think I've done a great deal of that already, but it doesn't hurt to do more of it.
Next time, I'll work on determining objectives.
The first thing I think of when I read those lines are related to what mental health practitioners refer to as "self-talk". Once we begin to have thoughts, ideas, and beliefs about ourselves, they become a "truth" of how we perceive ourselves, and they influence the way we conduct our lives. It essence, those beliefs become a self-fulfilling prophecy.
I tend to be very hard on myself at times and so I know the propensity for negative self-talk for me is high. I know Tharp's ideas are geared towards beliefs about the market, but I don't think you can examine your approach to the market until you have probed your own beliefs about yourself. For me, it is important to remind myself that I have not failed or am not a failure because some of the ambitions I've had for my life have not come to pass. I also have to remind myself that just because the past didn't work out as I had hoped, it does not mean the future is permanently inaccessible and pointless to hope for.
I'm not sure how that would impact my trading, other than to think I'll need to remind myself that the most important trade is the one I'm about to make, not the (potentially) several losses that preceded it. In the course of developing a system my goal is to find a system in which I can place confidence so I can believe that its positive long-term expectancy will overcome the sure-to-come losing streaks.
I think my beliefs about the market support a positive outlook that will enable me to be successful with trading. I don't believe the market rewards or punishes, nor will it act with any specific malice toward me. Its simply a manifestation of expectations and a record of opinion, essentially. My job isn't to be right or wrong about the markets, but rather to follow it, to just flow with it.
Tharp recommends several books, including Market Wizards, which I think I may already have. I'm going to look for some of the others to aid me in gathering market information. I actually think I've done a great deal of that already, but it doesn't hurt to do more of it.
Next time, I'll work on determining objectives.
posted by Young Pip at 2:09 PM
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