Page 8 - Psychology Course Study Manual

Now let's see how to approach the market by aligning that same “loner” belief system with the

markets to be successful. Step One: is to accept yourself as having that belief to begin

with. Step Two: once you accept your beliefs, find a set of trading entries or a trading system

that satisfies those beliefs. In this example, that would be to find trades that allow you a low
risk entry to countertrend trade the trends or use corrections in the trend to get a good, unique

entry to take advantage of other traders which represent the crowd so to speak.

That way you are not trading with the crowd, but you are either trading against the crowd
(countertrend trading) or taking advantage of the trend (crowd) by getting in at a better price in

relation to the other traders. The point here is to find a way for your trading entries to satisfy

your beliefs thus aligning your beliefs with the markets! If you can do this successfully, then
there’s no need to change your beliefs!

However, at times you may want to attempt to change your beliefs. This will be a personal

decision that only you can make. A quick example of this is one from my own trading:

For the longest time I struggled with getting out of trades too soon. Technically I would make

great entries and set well defined stops, but it was hard for me to stay with trades long enough

to see big money. I finally overcame this by confronting reality and being brutally honest with
myself and my beliefs.

The problem was not with my abilities or technical evaluations, it was with my emotions

structured by my belief system. In fact, my technical analysis was usually right on the
mark. But time and time again, I would get out too soon because my emotions and anxiety

took over and literally forced me out of the trade to take a quick profit. I wanted to take that

quick profit emotionally before the market reversed and took it away from me.

I had to change my beliefs about money, fear, and how the markets work. When trending,

markets usually correct, and then trend, correct again, and then trend again. So I had to change

my beliefs about the market to accept this. And also change my beliefs about taking a quick

profit versus letting the market give me all it wants before the trend ends.