PREFACE
The goal of any trader is to turn profits on a regular basis, yet so few people ever really make consistent
money as traders. What accounts for the small percentage of traders who are consistently successful?
To me, the determining factor is psychological—the consistent winners think differently from everyone
else.I started trading in 1978. At the time, I was managing a commercial casualty insurance agency in
the suburbs of Detroit, Michigan. I had a very successful career and thought I could easily transfer that
success into trading. Unfortunately, I found that was not the case.
By 1981, I was thoroughly disgusted with my inability to trade effectively while holding another job,
so I moved to Chicago and got a job as a broker with Merrill Lynch at the Chicago Board of Trade.
How did I do? Well, within nine months of moving to Chicago, I had lost nearly everything I owned.
My losses were the result of both my trading activities and my exorbitant life style, which demanded
that I make a lot of money as a trader. From these early experiences as a trader, I learned an enormous
amount about myself, and about the role of psychology in trading. As a result, in 1982, I started
working on my first book, The Disciplined Trader: Developing Winning Attitudes.
When I began this project I had no concept of how difficult it was to write a book or explain something
that I understood for myself in a manner and form that would be useful to other people. I thought it was
going to take me between six and nine months to get the job done. It took seven and a half years and
was finally published by Prentice Hall in 1990. In 1983, I left Merrill Lynch to start a consulting firm,
Trading Behavior Dynamics, where I presently develop and conduct seminars on trading psychology
and act in the capacity of what is commonly referred to as a trading coach. I've done countless
presentations for trading companies, clearing firms, brokerage houses, banks, and investment
conferences all over the world.
I've worked at a personal level, one on one, with virtually every type of trader in the business, including
some of the biggest floor traders, hedgers, option specialists, and CTAs, as well as neophytes As of this
writing, I have spent the last seventeen years dissecting the psychological dynamics behind trading so
that I could develop effective methods for teaching the proper principles of success.
What I've discovered is that, at the most fundamental level, there is a problem with the way we think.
There is something inherent in the way our minds work that doesn't fit very well with the
characteristics shown by the markets. Those traders who have confidence in their own trades, who trust
themselves to do what needs to be done without hesitation, are the ones who become successful. They
no longer fear the erratic behavior of the market. They learn to focus on the information that helps them
PREFACE
The goal of any trader is to turn profits on a regular basis, yet so few people ever really make consistent
money as traders. What accounts for the small percentage of traders who are consistently successful?
To me, the determining factor is psychological—the consistent winners think differently from everyone
else.I started trading in 1978. At the time, I was managing a commercial casualty insurance agency in
the suburbs of Detroit, Michigan. I had a very successful career and thought I could easily transfer that
success into trading. Unfortunately, I found that was not the case.
By 1981, I was thoroughly disgusted with my inability to trade effectively while holding another job,
so I moved to Chicago and got a job as a broker with Merrill Lynch at the Chicago Board of Trade.
How did I do? Well, within nine months of moving to Chicago, I had lost nearly everything I owned.
My losses were the result of both my trading activities and my exorbitant life style, which demanded
that I make a lot of money as a trader. From these early experiences as a trader, I learned an enormous
amount about myself, and about the role of psychology in trading. As a result, in 1982, I started
working on my first book, The Disciplined Trader: Developing Winning Attitudes.
When I began this project I had no concept of how difficult it was to write a book or explain something
that I understood for myself in a manner and form that would be useful to other people. I thought it was
going to take me between six and nine months to get the job done. It took seven and a half years and
was finally published by Prentice Hall in 1990. In 1983, I left Merrill Lynch to start a consulting firm,
Trading Behavior Dynamics, where I presently develop and conduct seminars on trading psychology
and act in the capacity of what is commonly referred to as a trading coach. I've done countless
presentations for trading companies, clearing firms, brokerage houses, banks, and investment
conferences all over the world.
I've worked at a personal level, one on one, with virtually every type of trader in the business, including
some of the biggest floor traders, hedgers, option specialists, and CTAs, as well as neophytes As of this
writing, I have spent the last seventeen years dissecting the psychological dynamics behind trading so
that I could develop effective methods for teaching the proper principles of success.
What I've discovered is that, at the most fundamental level, there is a problem with the way we think.
There is something inherent in the way our minds work that doesn't fit very well with the
characteristics shown by the markets. Those traders who have confidence in their own trades, who trust
themselves to do what needs to be done without hesitation, are the ones who become successful. They
no longer fear the erratic behavior of the market. They learn to focus on the information that helps them
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