Page 7 - Psychology Course Study Manual

How To Align Your Beliefs With The Market

You may not even realize it, but you trade in accordance with your own belief system. And if
you are not successful, it is because you are working with a trading system that is not in

alignment with your beliefs about the markets.

First let's define what a your "belief system" is. A person's belief system is a set of sometimes
conscious and sometimes unconscious rules we have about life, trading, money, relationships,

etc. Beliefs shape how you see or interpret reality. Every one of us has a unique set of beliefs

which make up our belief system. Our upbringing, our environment, life experiences, etc. all

come together to form our belief system. So we can basically say that our personality is shaped

by our belief system. In fact, just about everything we do is shaped in some way by our belief
system.

Great traders accept who they are, and accept their beliefs both positive and negative. You can

identify your short comings and strengths. This can help determine how to successfully trade
the markets.

By “accepting” yourself, you can improve your trading by aligning your positive beliefs and

negative beliefs with not only your trading system, and the markets themselves.

Let's say for example that you do not like to follow the crowd, you are “a loner” in life, and you

do not conform to authority figures, corporate environments, etc. Do you think you will be a

good trend trader? Will you enjoy trading with trend and following a crowd of traders trading
with this trend?

I doubt it! Because in this example, your beliefs are in direct conflict with following the crowd.

In the markets that would mean trading with the trend. Thus as a trader, if you are using a
trend following trading system, you are trading in direct conflict with your beliefs. And success

is unlikely. In fact you will probably fight a trending market the entire way!