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necessary to keep the car in the appropriate lane. Because he is so focused on what he cant do and what may happen as a result, he has little if any of his attention available to do anything else, like carry on a conversation with a passenger, notice the scenery in his peripheral vision, or even read road signs. All this other environmental information is available and perceivable, but in his case it is either blocked or unnoticed because he has to devote so much of his attention to the object of his fear (the lack of control he has over the car). At the point where he becomes comfortable with his ability to drive safely, his field of awareness will open up allowing him to perceive all this other information.

The purpose of fear is to help us avoid those things in the environment we have learned to perceive as threatening. However, when we couple our painful memories with our natural propensity to associate and group environmental components together- instead of avoiding the object of our fears-we will actually create the very experiences we are trying to avoid. For example, a child severely bitten by a dog will quite naturally associate all dogs with the threat of pain and consequently generate an intense fear or even terror whenever he encounters any dog in the future. The childs fear of all other dogs other than the one that bit him is real. He has no way of making a distinction between a friendly and a dangerous dog because his personal experience has taught him that all dogs are dangerous. Because of this natural propensity to associate, all we need is one first-time experience to believe that all dogs are dangerous. That is his truth about the nature of the environment. However, his truth is not all the environment has to offer in the way of experiences in relationship to dogs. Not every dog that exists is dangerour. Quie the contrary, very few would be considered threatening; most see a child and want to play.

Now, in every chance encounter the child has with a dog in the future he will create an experience of terror, regardless of the disposition of any particular dog he happens to run into. If a dog makes any movement toward the child, the child will perceive that movement as an actual attack when all the dog wanted to do was play or be petted. In fact, the child could become so afraid of being attacked that he will devote most if not all of his attention to scanning the surrounding environment for dogs. Eventually his senses will become attuned to picking up their sights and sounds. And every time

he sees or hears one, he will create another terrifying experience that just reinforces his fears. His focus of attention will attract to his attention the object of his fears so that he can avoid what he has learned is threatening. The problem is that what he has learned is erroneous in relationship to the conditions, that not all dogs are dangerous. Not knowing that, he will naturally believe that his terror is coming from outside him instead of inside him. In effect his fears are acting on his perception to create the very experiences he is trying to avoid by causing him to hone in on all the dogs in the environment.

What we focus our attention on in the environment is what we will usually get. The dog-biting example is a graphic illustration of this. However, there are other ways that our fears act as a cause to create what we are trying to avoid that arent so obvious. Remember that all fears act on our perception as a warning mechanism to help us avoid what we believe to be threatening. One way to avoid the object of our fears is simply to refuse to acknowledge the existence of threatening information. Another more subtle way that will create some real blind spots in our perception is to focus all our attention on alternative-nonthreatening-information to the exclusion of everything else. These blind spots will exclude whole categories of perceivable information from our awareness, which can result in some disastrous consequences, especially in the trading environment.

For example, lets say that the market is offering us what we believe to be a good opportunity to make some money, so we go ahead and put on a trade, but at the same time we are also operating out of a fear of being wrong. We will fear being wrong because, if we are, it will force us to feel whatever negative energy has accumulated inside of us as a result of being wrong in the past. Now, if the market offers us a choice between information that would indicate we are right or information that would indicate that we are wrong, what information will we naturally focus our attention on? The information that will make us right, without acknowledging or considering the implications of the information that would indicate otherwise. Again, those implications could be disastrous.

Lets look at another example of a trader who is afraid of losing A fear of losing presents an obvious conflict because it would be difficult to put on a trade in the first place. However, for the sake of this

example, lets say this trader was so attracted to a specific opportunity that he managed to operate outside of his fear long enough to put on a trade. Now, the kind of information he focuses his attention on will depend on what the market does. If the market goes against him, he will be afraid to confront the possibility of another loss, so he will focus his attention on any other nonthreatening information. If the market happens to come back to his entry point, he will exit the trade in a sigh of relief, regardless of what the potential is for any further movement in his direction. But, if the market continues to go against him, his mental defenses will begin to break down as the threatening information becomes just too overwhelming for him to be able to block from his awareness any longer. At that point he could easily become paralyzed and not be able to do anything on his behalf. Eventually his stress and anxiety will become so acute that the only way he can relieve it is by getting out of the trade.

On the other hand, if he finds himself in a winning trade he will focus on completely different information. His fear of losing will cause him to focus his attention on what the market can take away from him. In a winning trade he will exclude from his awareness any information that would indicate what the potential is for the market to continue to move in his direction, which is the only information he focused on in a losing trade, and instead focus exclusively on information that will confirm his fears of the market, retracing back to his entry point or beyond. In effect, his fear of losing causes him to exit the trade early for a small profit regardless of whatever the possible profit potential was in that trade. Once he is out, if the market continues to move in his original direction, he will agonize over the profits he left on the table and wonder why he just couldnt hang in there just a little longer, not realizing that his fear of losing actually caused him to lose all those additional profits.

What you have just been given is an example of why the vast majority of traders cut their profits short and let their losses run. In a winning trade, the fear of losing will cause us to focus our attention on information that the market is going to take our profits away, compelling us to get out early. In a losing trade we will focus our attention on just the opposite information-anything other than that which would indicate the trade is a loser. Fear causes us to act without a perception of choice. When we are afraid to confront

certain categories of market information, it drastically limits the choices that we perceive as available. Cutting a loss isnt a choice if we systematically block from our awareness any information that would indicate that we are in a losing trade. Staying in a winner isnt a choice if we are consumed with the fear that the market is going to take away our money.

To prevent these blind spots in our perception, we have to learn to trade without fear. And to trade without fear we need to completely trust ourselves to confront and accept whatever information the market is offering about itself, and we need to be able to trust ourselves to know that we will always act in our best interests without hesitation, regardless of the conditions. Any endeavor will require some degree of trust. We would find it difficult to cross the street it we didnt trust ourselves to be able to get out of the way of the oncoming traffic. From a psychological perspective, the market environment can wreak just as much havoc in our lives as getting hit by a car. To be successful as traders, we need to believe that we can win with an absence of fear so we can make better assessments of the conditions and perceive more choices. What this means is that we have to do the necessary mental work to release ourselves from anything within us that would cause us to narrow our focus of attention or specifically block certain categories of information from our awareness.

There is a direct relationship between our ability to adapt to changing environmental conditions and the level of satisfaction we feel about our lives. To adapt to the changes occurring in the outside environment implies that we are changing ourselves as we !eam more and more of what the environment has to offer in terms of distinctions about its nature. The more disrinctions we can make between the various components of the environment and how they act as a force on one another, the more information becomes available to us through our perception. As we expand our perception of information available, we will gain a deeper level of undersranding and insight into the cause-and-effect relationship that we have wirh the outside environment, that is, how the environment has the potential to act as a force on us and how the environment will react to the force of our behavior.

The deeper the level of our understanding and insighr, the more effectively we can interact with the environment to fulfill our needs and achieve our goals. Fulfilling our needs and achieving our goals create within us a feeling of well-being, confidence, and satisfaction

Why We Need to Learn How to Adapt

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