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his profits while there are still some buyers available to sell to. When the last buyer has bought, the market has no place to go but down.

The public gets stuck because they werent willing to take the risk when there was still potential for the market to move. For the market to sustain itself, it needs to attract more and more people. As big as this country is or the world for that matter, there are only so many people who will buy. Eventually the supply of buyers runs out, and when it does the market falls like a rock.

The professionals have been selling out their positions before this happens, but once the supply of buyers runs out, the professionals start to compete among one another for the available supply of buyers which is dwindling fast, so they offer lower and lower prices to attract someone into the market so they can get out. At some point, instead of the lower prices being attractive to people, it panics them. The public didnt anticipate losing. Their expectations are very high with very little toleration for disappointment. The only reason they got in was because it was a sure thing. When the public starts to sell, it starts a stampede.

Again, people will ascribe their actions to some rational reason because nobody wants to be thought of as irrational and panic-stricken. The real reason why people panicked and the prices fell is simply because prices didnt keep on going up.

Self-discipline is simply a mental technique to stay focused on what you need to learn, or do, to accomplish your goals. There will be times when you wont have the resources to function effectively relative to the external conditions. Other times the resources you do have will be in conflict with both the conditions and your goals. So to accomplish your goals, you will need to adapt. In other words, you will need to change the way you interact with the environment. To change your behavior and how you experience the environment (feelings and emotions), you will have to change your perspective. To change your perspective, you will have to change the mental components that effect your perception of environmental information. Keep in mind that you cant physically control what the markets do; you can only learn to control your perception of the markets to share the highest degree of reality (the least amount of distortion) with everyone else who is participating or has the potential to participate.

The more sophisticated you become as a trader, the more you will realize that trading is completely mental. It isnt you against the markets, its just you. All the other traders participating to make the market provide you with an opportunity to make money from their

The Steps to Success

divergent beliefs about the future. If people didnt disagree about the future value of any particular commodity or stock, then there would be nothing to compel them to either bid a price higher or offer it lower, and the opportunity to profit from these changes would cease to exist. So the markets just offer the individual trader opportunity. They dont choose the data on which you focus your attention, and they certainly dont interpret the data you perceive. Nor are the markets responsible for what you cant perceive because of the distinctions you havent learned to make yet. They also dont choose when you put on a trade, how long you stay in, when you get out, or how many contracts you buy or sell.

Each individual trader creates his own experience of the markets based on this picking and choosing process and the decisions that result. If you accept this concept as valid, then the implications are that you will never have a valid reason to blame the markets for your unsatisfying results. The markets dont owe you anything (regardless of how hard you work to be successful) because every other trader participating is doing so to take your money away. You and you alone are completely responsible for whatever you end up with. The sooner you accept that responsibility (if you havent already), the easier it will be to identify what skills you need to learn to interact with the markets more successfully. Even if you cant identify the mental components responsible for what you ended up with, at least by assuming that you are responsible, you will be opening yourself up to find out.

To be a successful trader you need to trade without fear. As you have already learned when you use fear as a resource to limit yourself, you will create the very conditions you are trying to avoid. Or to say this another way, you will experience your fears. You also cant learn anything new because fear will force you to perceive the environmental "now" from your individual past. You will experience that past regardless of the opportunities the environment may have to offer in that same moment. Your individual history will repeat itself until you change your history, which will then allow you to learn and experience something new. Evolving beyond your fears is also the best way to learn how to predict market behavior. The more fearful traders are, the fewer the choices they perceive as available to themselves and the easier it is to predict their behavior. You will be able to recognize this clearly in others when you recognize it yourself and work your way out of the condition where you trade with fear.

However, you will need some resource to limit yourself so that you dont get reckless. Getting reckless is exactly what people have a tendency to do if they dont feel any fear, especially if there is a potential for thrilling results, as there is in trading. The resource you need to limit yourself is self-trust. You will gain that self-trust when you establish a set of rules and guidelines to trade by and know that you will always follow those rules without hesitation, regardless of the temptations to do otherwise.

Once you trust yourself to always do what needs to be done, there will be nothing to fear because the markets wont be able to do anything to you, as a result of your inability to respond appropriately. Consequently, with nothing to fear, you are then free to observe the markets free of distortions. There wont be any need to avoid certain categories of information because of how that information will make you feel. The less reason you have to avoid or distort information, the more you make yourself available to learn about the nature of the markets. The more you learn, the easier it will be to anticipate what the market will do next. If you can accurately anticipate what will happen next, the easier it will be to give yourself more and more money (notwithstanding any mental components that would argue against giving yourself more money).

It is very important for you to understand that these new insights about the markets behavior will come in stages as you learn to trust yourself more and more. There is no "get rich quick" scheme being offered here. There are enough rags to riches to rags stories to attest to the fact that get rich quick doesnt work anyway. Getting rich quick can only lead to a great deal of anxiety and frustration if you dont have the skills to keep it There isnt much point to making a lot of money if you are a susceptible to making that one trading error that can give it all back plus more. Once you have made a fortune and lost it, the psychological work that you will need to do to get it back is enormous compared to work that is necessary to keep yourself from losing it in the first place. As a trader it is more important to know that you will always follow your rules than it is to make money, because whatever money you make, you will inevitably lose back to the market if you cant follow your rules.

You also need to understand that your rules will change as your understanding and insights evolve. Many people dont like to establish trading rules because they believe that once made, they cant be changed. Any exercise that I offer you or rule that you select to

guide your trading behavior is only transitory. They are methods and techniques to get you beyond certain fundamental stages of development so that you can recognize for yourself their value and what you need to do next to be more successful. In fact, a good rule of thumb to use to determine your readiness to move beyond a certain rule or exercise and to the next challenge is the recognition that you can do what you set out to learn so well that it becomes second nature. Otherwise, keep working at it until you dont have to think about it any longer.


First and foremost, you may need to change your perspective or the focus of your trading. Until now your focus may have been to make money If this is so, you will need to change your perspective to "What do I need to learn or how will I have to adapt myself to interact more successfully?" You need to stay focused on mastering the steps to achieving your goal and not the end result, knowing that the end result, money, will be a by-product of what you know and how well you can act on what you know.

There is a tremendous difference between focusing on money and focusing on using your trading as an exercise to identify what you need to learn. The first will cause you to focus on what the markets are giving you or are taking away from you. The second perspective causes you to focus your attention on your ability to to give yourself money. With the first perspective, you are placing some of the responsibility onto the markets to do something for you. With the second perspective, you assume all the responsibility.

Always keep in mind that each moment is a perfect reflection of your level of development. If you look at each moment that things dont turn out as you want or expect as a mistake, then you will usually cut yourself off from the insight about yourself contained within each moment. The reason why we will cut ourselves off from this information is because we typically associate mistakes with pain. We will instinctively avoid pain and in doing so also avoid what we need to know about ourselves to interact more effectively in similar circumstances in the future.

To evolve beyond pain and our fear of mistakes, our mistakes have to be resolved. This could be a big task and you may not want to tackle it at this time. So what you will need to do is build a corollary framework to place all of your trading experiences. This framework needs to be defined in such a way that all experiences are valid and have meaning, and, as such, mistakes dont exist-they just point the way.

As part of this framework you may also need to change your definition of a missed opportunity. Except for the inability to accept a loss, there isnt anything that has the potential to cause more psychological damage than a belief in missed opportunities. Missed opportunities are trades that would have always turned out perfectly because they only occurred in our minds, where we can make anything be as we want it to be. Of course, we would have responded exactly as the conditions warranted without flaw. The problem is we didnt do it, and the resulting sense of loss we feel is difficult to reconcile. Therefore, these missed opportunity trades have the potential to cause more anxiety and stress than the trades we actually do take that turn out to be losers.

Nothings worse than missing a "perfect" opportunity. However, if you could have, you would have; its that simple. The sooner you accept this, the sooner you will be able to take advantage of these missed opportunities instead of beating yourself up over them. Besides there really isnt anything to miss because the markets are in perpetual motion and will continue to be until everyone agrees on value. As long as the price keeps changing, there will always be another opportunity.

When you start trading from the perspective that mistakes dont exist, you will be amazed at the sense of freedom you will feel to grow by accepting your results as a reflection of who you are in that moment, which then allows you to determine what you need to learn to do better. When you release the energy out of the belief that it is possible to miss anything, you will no longer feel compelled to do something, like getting into trades too early or too late. In other words, you will be giving yourself additional choices (not doing something is often the most appropriate choice) where only one choice existed.

You need to constantly keep in mind that the professional traders from whom you are trying to extract money already know and are

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