disagreement with someone about something we both experienced. Other than our physical features,
the way we think is what makes us unique, probably even more unique than our physical features do.
Let's get back to traders. What is different about die way the best traders think as opposed to how those
who are still struggling think? While the markets can be described as an arena of endless opportunities,
they simultaneously confront the individual with some of the most sustained, adverse psychological
conditions you can expose yourself to. At some point, everyone who trades learns something about the
markets that will indicate when opportunities exist. But learning how to identify an opportunity to buy
or sell does not mean that you have learned to think like a trader.
The defining characteristic that separates the consistent winners from everyone else is this: The winners
have attained a mind-set—aunique set of attitudes—that allows them to remain disciplined, focused,
and, above all, confident in spite of the adverse conditions. As a result, they are no longer susceptible to
the common fears and trading errors that plague everyone else. Everyone who trades ends up learning
something about the markets; very few people who trade ever learn the attitudes that are absolutely
essential to becoming a consistent winner. Just as people can learn to perfect the proper technique for
swinging a golf club or tennis racket, their consistency, or lack of it, will without a doubt come from
their attitude Traders who make it beyond "the threshold of consistency" usually experience a great
deal of pain (both emotional and financial) before they acquire the land of attitude that allows them to
function effectively in the market environment. The rare exceptions are usually those who were born
into successful trading families or who started their trading careers under the guidance of someone who
understood the true nature of trading, and, just as important, knew how to teach it.
Why are emotional pain and financial disaster common among traders? The simple answer is that most
of us weren't fortunate enough to start our trading careers with the proper guidance.
However, the reasons go much deeper than this. I have spent the last seventeen years dissecting the
psychological dynamics behind trading so that I could develop effective methods for teaching the
principles of success. What I've discovered is that trading is chock full of paradoxes and contradictions
in thinking that make it extremely difficult to learn how to be successful. In fact, if I had to choose one
word that encapsulates the nature of trading, it would be "paradox."
(According to the dictionary, a paradox is something that seems to have contradictory qualities or that
is contrary to common belief or what generally makes sense to people.)
Financial and emotional disaster are common among traders because many of the perspectives,
attitudes, and principles that would otherwise make perfect sense and work quite well in our daily lives
have the opposite effect in the trading environment. They just don't work. Not knowing this, most
traders start their careers with a fundamental lack of understanding of what it means to be a trader, the
skills that are involved, and the depth to which those skills need to be developed.
Here is a prime example of what I am talking about: Trading is inherently risky. To my knowledge, no
trade has a guaranteed outcome; therefore, the possibility of being wrong and losing money is always
present. So when you put on a trade, can you consider yourself a risk-taker? Even though this may
disagreement with someone about something we both experienced. Other than our physical features,
the way we think is what makes us unique, probably even more unique than our physical features do.
Let's get back to traders. What is different about die way the best traders think as opposed to how those
who are still struggling think? While the markets can be described as an arena of endless opportunities,
they simultaneously confront the individual with some of the most sustained, adverse psychological
conditions you can expose yourself to. At some point, everyone who trades learns something about the
markets that will indicate when opportunities exist. But learning how to identify an opportunity to buy
or sell does not mean that you have learned to think like a trader.
The defining characteristic that separates the consistent winners from everyone else is this: The winners
have attained a mind-set—aunique set of attitudes—that allows them to remain disciplined, focused,
and, above all, confident in spite of the adverse conditions. As a result, they are no longer susceptible to
the common fears and trading errors that plague everyone else. Everyone who trades ends up learning
something about the markets; very few people who trade ever learn the attitudes that are absolutely
essential to becoming a consistent winner. Just as people can learn to perfect the proper technique for
swinging a golf club or tennis racket, their consistency, or lack of it, will without a doubt come from
their attitude Traders who make it beyond "the threshold of consistency" usually experience a great
deal of pain (both emotional and financial) before they acquire the land of attitude that allows them to
function effectively in the market environment. The rare exceptions are usually those who were born
into successful trading families or who started their trading careers under the guidance of someone who
understood the true nature of trading, and, just as important, knew how to teach it.
Why are emotional pain and financial disaster common among traders? The simple answer is that most
of us weren't fortunate enough to start our trading careers with the proper guidance.
However, the reasons go much deeper than this. I have spent the last seventeen years dissecting the
psychological dynamics behind trading so that I could develop effective methods for teaching the
principles of success. What I've discovered is that trading is chock full of paradoxes and contradictions
in thinking that make it extremely difficult to learn how to be successful. In fact, if I had to choose one
word that encapsulates the nature of trading, it would be "paradox."
(According to the dictionary, a paradox is something that seems to have contradictory qualities or that
is contrary to common belief or what generally makes sense to people.)
Financial and emotional disaster are common among traders because many of the perspectives,
attitudes, and principles that would otherwise make perfect sense and work quite well in our daily lives
have the opposite effect in the trading environment. They just don't work. Not knowing this, most
traders start their careers with a fundamental lack of understanding of what it means to be a trader, the
skills that are involved, and the depth to which those skills need to be developed.
Here is a prime example of what I am talking about: Trading is inherently risky. To my knowledge, no
trade has a guaranteed outcome; therefore, the possibility of being wrong and losing money is always
present. So when you put on a trade, can you consider yourself a risk-taker? Even though this may
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