are vast differences in the characteristics of the mental environment (inner) and physical environment (outer) in which our bodies occupy space. Understanding these differences is a key ingredient in the process of changing yourself.

As a simple example, the book you are reading exists on the outside of you, whereas the label of book (i.e., your minds perception of the book) or any other thoughts or sensations you would experience as a result of that label and the meaning you attach is all occurring on the inside of you. Anything that goes on or that happens on the inside of you would constitute your mental environment; all your experiences and memories of those experiences, all your beliefs, all the emotional energy attached to those beliefs, all your feelings, needs, wants, expectations, and goals, and all your thoughts, regardless of whether or not you have expressed these thoughts into the environment, make up your mental landscape.

However, before we explore the differences between the inner and outer environments, I want to point out one characteristic common to the two. They are both constructed of many independently functioning parts ("regions" would be a better word to describe the inner environment) that cooperate to make up the whole. Most people are very familiar with their body parts, even the ones enclosed within the body cavity. These parts are made up of cells that have distinct functions They operate independently and cooperate with the other body parts. The sum total of these cooperating parts is our body. A simple illustration would be that eyes are not ears or lungs, they are distinct parts having unique functions within the whole.

By the same token, the mental environment is composed of a number of cooperative but independently functioning regions that make-up the whole of who we are. For example, a belief is not a dream, nor is a thought an emotion. Beliefs, dreams, thoughts, and emotions are all separate parts of the mental environment that interact in the same manner (at least conceptually) that your hands will interact with your eyes or your finger with your nose or your lungs with your heart I am pointing this out because most people do not think of their mental environments in such specific ways with highly refined distinctions among the various regions and the ways the components within those regions function.

The following list provides some of the categories into which I have divided the mental environment and the components associated with each category that will be explained in the next five chapters.

Positively Charged Emotions: Love, happiness, joy, confidence, peace, acceptance

Negatively Charged Emotions: Fear, anger, hatred, jealousy, disappointment, confusion, impatience, stress, anxiety, betrayal Illusions: Denials, rationalizations, intellectualizations, distortions Beliefs

Intents: Coals, aspirations Expectations: Wants, desires, demands Needs

Dreams: Sleeping dreams, daydreams

Thoughts

Attractions

Memories

Creativity

Intuition

This is not intended to represent a complete list of components and categories of the mental environment. However, it is comprehensive enough to serve the objectives of this book, which is to give you enough of a working knowledge of how they operate and interact to effect any changes you determine are necessary to trade successfully.

WHAT EXACTLY IS THE MENTAL (INNER) ENVIRONMENT?

1 am defining the mental environment as a place where all the sensory information from the physical environment (sensory information being the way in which the physical environment acts as a force on our

eyes, ears, nose, taste, and touch) gets sorted, categorized, labeled, organized, associated with, and stored. Beliefs are formed and meanings get attached. The mental environment is where our experiences of the outside world form into a complex belief structure about the nature of the physical environment and our relationship with it.

There are two things that I want you to note about this definition. First, it is limited, because it doesnt take into account mental activities that generate from within, exclusive of outside sensory information. This is something I will expand on later. Second, I am not including the brain as part of the mental environment, even though the activity of the mental environment takes place inside of the brain. (Why I am not including it will become clear in a moment.)

One of the first characteristics you may notice about the mental components listed is that they are all intangible. You cant see, hear, touch, taste, or smell them, at least not as they exist in the mental environment. For example, no surgeon operating on living brain tissue has ever encountered his patients beliefs, thoughts, dreams, or memories, even though he knew they were in there somewhere. Biochemists have discovered DNA (deoxyribonucleic acid) while working at the molecular level of tissue make-up and as of yet have not encountered one of the mental components listed earlier. Yet we know they exist because we can experience the results of someones beliefs or thoughts as they are expressed outwardly in the physical environment through their behavior.

Now, for those of you who are asking yourself how do these mental components exist if they arent tangible and no one has ever directly experienced them? The answer is, they exist as a form of energy (and energy doesnt have mass). For example, light will pass through physical objects or reflect off them, but light will not displace anything, and electricity will pass through objects, not displace them. Entities made up of atoms and molecules will displace one another as they move into each others space.

For a long time the scientific community believed that the atom was the smallest, most fundamental building block of existence, only to discover later that within an atom is energy. What scientists havent figured out yet is how does something that exists without mass (the energy within the atom) become something that does have mass-the atom. In other words, how does energy go from being nonphysical to physical. Albert Einstein was once asked to give his

definition of matter and he said "Matter is merely energy in a form that we can perceive by our senses." Even at the atomic level the book you are now reading and the chair you are sitting on to read it appear to your senses as if they are solid. However, that is not the case at all. Our senses cannot perceive things as they exist at the atomic level where everything is spinning and there is space between the atoms. However, the point I am making is that all matter exists as energy at the very deepest level of existence (within the atom), but not all energy exists as matter, as with light and electricity.

In very general terms, mental energy, as it exists in its various, intangible forms as beliefs, feelings, emotions, and so on has the potential to act as a force on our behavior and consequently as a force on the outside physical environment corresponding to the way in which this energy is expressed. For example, mental energy in the form of a belief or memory of an experience can motivate a person to walk across a room to change the channel on his television set because he believes a program on another channel is more worthwhile or pleasurable, bid the price of a stock higher than the last price because he believes it serves his best interests, or motivate masses of people to go to war to defend or promote whatever they believe needs to be defended or promoted. These actions and their effects on the environment are the result of this mental energy expressed outwardly.

WHAT IS EXPERIENCE?

We experience the world with our five physical senses. This is common knowledge. But, when you get down to the very basics, what actually happens to our experiences of the environment as they go from the outer (physical) to the inner (mental) environment? What we see, hear, touch, taste, and smell at a physical level is transformed into electrical impulses of energy and is sent to the brain via the nervous system. That is, at the most basic level, tangible experience of the outside world is transformed into intangible electrical energy, meaning that the tangible medium where we experience our lives (the physical environment) does not have the same characteristics and properties of the medium that represents and stores these experiences on the inside of us (the mental environment). We will examine these differences on a more practical level in a moment

If, at first, it seems preposterous to think that our experiences (environmental information) are transformed into electrical energy, then consider that we have been using an analogous form of technology mechanically for years in the form of telephones and computers. Computers store information, sounds, and images in a number of different energy media. Telephones transport sounds and images in the form of electricity, light, or microwaves. As commonplace as all this is, there is still something fascinating about a living process that transforms sensory information (tangible experience) into electricity and stores it that way. Everything that we have learned (as individuals) about the nature of our existence is stored in our mental environment at an intangible level, in a nonphysical reality (energy is real, yet it is nonphysical because it doesnt consist of atoms and molecules, thus it can be said that energy exists in a nonphysical reality).

Earlier, I did not include the brain as part of the mental environment because it exists at the tangible level of atoms and molecules (physical reality), whereas the mental environment (energy in the form of beliefs, memories, emotions, and so on, about the nature of physical environment resulting from our experiences) does not exist at this tangible level. To help you understand this distinction between the brain and the mental environment, consider that the brain exclusive of the mental environment is no different from a computer that is not plugged into some electrical power source. In this analogy, the mental environment would correspond to the electrical energy that makes the computer run as well as store and carry the various forms of information the computer is designed to handle and the computer hardware (physical, mechanical, atoms, and molecules) would correspond to the brain.

This is the reason why I stated in the beginning of the chapter that there are vast differences between the mental and physical environments. All the mental components 1 listed exist at the intangible level of energy and, more important, function with the same properties and characteristics of energy. To understand the nature of the mental environment, you need to understand the characteristics of energy. Thus, what I intend to do next is examine the properties and characteristics of typical energy forms like light and electricity and then compare them to the characteristics of the mental environment to establish a correspondence between the two.

Finally, in the next five chapters I will tie all this material together to give you some very practical techniques to improve your ability to trade effectively.

HOW DOES THE MENTAL ENVIRONMENT CORRESPOND TO THE CHARACTERISTICS AND PROPERTIES OF ENERGY?

Energy Is Nondimensional

As we already know, energy doesnt take up space in the physical environment because it doesnt displace anything that does take up space. This "no space" characteristic of energy gives it a nondimensional quality. In other words, anything that doesnt take up space also wont have any tangible dimensions of height, length, width, or circumference, at least not in the ways in which we would normally think of these properties This nondimensional quality is probably the hardest concept to grasp about the nature of energy, because even though energy is nondimensional, it can take some form that is visible to our eyes. And anything that is visible should have dimensions that we can measure. It may seem like an obvious contradiction to say that energy can take a visible form and yet still not have dimension, but it is not.

The best example to illustrate this is with holograms or holographic photography. With a holographic process you can create a three-dimensional image in light projected into space that can be seen with the eyes, and it will appear to have length, width, and circumference. You could even measure the length or width of the image; however, your hands would pass right through the image if you tried, because there really isnt anything there, at least not in a physical sense. Images in light have no physical substance, so from a physical perspective, they also dont have any dimension. (Relative to physical objects, energy doesnt have dimension.)

Memories or mental images (anything that we can see with our inner eye, like visualizations, daydreams, or night dreams) could operate very much like a hologram of laser light-an image of light that has no physical substance-where space as it relates to distance or dimension is not a consideration. The total area available inside of