[zdo]

“Change thyself”
For traders, what is the ‘state of the art’?

[DugDug]

1) desire to change yourself
2) plan to change
3) discipline to put into place the actions of the plan

[Soultrader]

1. Unlearn what you've learned
2. Becoming aware of your faults
3. Rediscovering yourself
4. Accepting what you thought was impossible

[zdo]

Hi all,
fxGirl, from the 'Know thyself' thread re your post: “You said that you insist that traders develop their own systems, but for a different reason. I’d be interested in what that reason is."
I have a co-mingled list of reasons but at the core, I think the following says it far better than I could ever say it (Note: all bracketed content is mine)

The Determining Factor

[Barely or only occasionally consciously] Many people feel trapped by their past. They think they are doomed by events that took place in the earliest stages of their childhood.

Some people imagine that the birth experience was so traumatic that it completely determined the course of their life, for them the biggest problem they have is that they were born.

Some believe they are victims of their conditioning or how their parents treated them; they see this as the predominant determining factor in the life they now live.

There are those who believe they are extension of their genes and that what primarily determines their life experiences is their genetic code.

Others assign the determining factor of their lives to their astrological makeup of to their numerology.

Still other attribute the determining factor of their lives to their social, ethnic, or racial background.

Some say it is their gender that mostly determines their fate.
[from some of the narratives I’ve heard, some seem to have all these reasons at the (serial) ready…]

There are many theories, built primarily on the assumptions of the reactive-responsive orientation, that promote the idea that you are for the most part fixed in your life pattern and that you can only make changes – if changes are at all possible – by somehow dealing with the predetermined nature you carry within you.

Different theories suggest dealing with the determining factor by understanding it, overpowering it, denying it, manipulating it , experiencing it, accepting it, repressing it, surrendering to it, dialoging with it, appeasing it, or integrating it.

Those in the reactive – responsive orientation* find this notion of ‘determining factors” appealing , because it attributes causality to circumstances beyond their direct control [a very easy chute to do this in trading – 'random' trade and then just keep adding some more cars ]

When you shift to the orientation of the creative*, you begin to move along the path of mastering causality. You become the predominant causal force in your life, which is a natural and desirable situation

This shift is made by evoking senior forces, such as fundamental choice*, primary and secondary choices*, structural tension*, aspiration to your true values, and being true to yourself.

These senior forces always take priority over lesser forces, such as willpower*, manipulation, conflict manipulation*, and structural conflict*. [be careful not to assume you understand how he’s using these *’d terms if you haven’t read the book]

There is another force inherent in the orientation of the creative that is senior even to mastering causality. This senior force, I call transcendence

…

Transcendence is more than just the accurate realization that the past is over. It is also a realignment of all dimensions of yourself with the very source of your life.

From
The Path of Least Resistance (revised, second edition 1989)
Robert Fritz

If you haven’t read this book I highly recommend it. If you have read it, time to ‘dust it off’ in the light of trading development…

[zdo]

More ...

There is a difference between passively learning reality because life forces you to and actively teaching yourself reality. When you seek to know reality and learn what there is to learn, you can best create wary really matters to you. Like art for art’s sake, this is truth for truth’s sake – the desire to know reality because it is real, and for no other reason.

The foundation of reality is the only place you can start the creative process. There are no tricks to this. Learning reality is ability that is important to master and yet human to avoid.

There is a conflict of tendencies here. One tendency is to view reality selectively. Our natural aversion to pain and suffering leads us to avoid new experiences of pain and suffering. We develop a strategy of avoiding looking at reality for fear of what we might find. We would rather not receive bad news.

A second tendency is the human longing to create. As we move in time and space, we live in a constant state of change, and we have a natural tendency to want to determine what this change will be. Will it be positive or negative? Smooth or abrupt?

Furthermore, we have deep aspirations. We are natural builders. We build civilizations. We desire to build our own lives.

To fulfill this tendency, we need to know what reality is. Whether we like what we find or not. Whether it makes us feel good or bad. Whether we are frustrated by it or satisfied.

These two tendencies lead to different actions. One is to avoid knowing reality, the other is to know reality. The conflict between the two is usually not pronounced, but sometimes it is. When you are creating and also trying to avoid pain, you will come to a crossroads of decision. When push come to shove, what do you do? Do you avoid the potential pain and misrepresent reality, or do you accurately represent reality to enable yourself to create you vision and feel whatever there is to feel?

This is a matter of values. That which you hold to be more valuable will guide your actions. If the avoidance of pain is a higher value than the creation of what you want, your actions will be to avoid the parts of reality that seem problematic. If your creation is a higher value, you will pursue an accurate representation of reality and let your emotional chips fall where they may.

…

Your concept of reality may not be reality

…

Reality is not a concept

…

When you begin to observe reality, begin freshly with the notion that you know nothing. Separate the ideas you have from your observations. You might find this hard to do. But if you truly want to know what reality is, your observations must not be burdened by your own biases. It takes practice to put preconceived concepts aside and observe what is truly going on. When you master this practice, you will have a powerful tool you can use to create what matters most to you in life.
…

From
The Path of Least Resistance (revised, second edition 1989)
Robert Fritz

[JBWTrader]

The last paragraph is actually what it takes to be a very good if not great therapist..

One could say here are some similarities to approaching higher levels of trading achievement that can be related to the last paragraph also..

very interesting couple of posts Zdo. Thanks

Best
John

[zdo]

From the “Single Largest Roadblock” thread

Originally Posted by gandalf33 »

I have one challenge only: I can't face losses.

Losses are killing me, a losing trade feels to me like a stab with a knife in the heart, while I have no problem losing at conventional games, e.g. chess, a single losing trade is something that puts me down. It's causing me so much pain that it's hard to express. I feel clouds darkening the sky of my mind after a losing trade. Like facing a huge block that you know will be almost impossible to get thru.

That thing is having a bazillion effects on me, all of them adverse:
1) my mood goes downhill, affecting my own and others' personal life
2) I have a great urge to find a flaw in the system after a losing trade, and correct it
3) after a streak of losing trades, just 2-3 are enough, or a month of trading where I'm +/- 0 on balance, or slightly below 0, I immediately seek a new system

I've been thinking about the remedy - perhaps quality mentorship putting me in the right mindset is what I'm lacking. I'll keep pursuing the topic.

gandalf33,
Have you read Mark Douglas or been to one of his workshops? Solid foundations for the ‘thinking’ aspect of those factors mentioned by MadMktScientist, etc...
http://www.woodiescciclub.com/Lectur...glas/index.htm
http://www.woodiescciclub.com/Lectur...ugust-2005.htm
I still set an appointment to listen to these one morning a year ... whether I need to or not...


I think it was Larry Williams who suggested going and playing slots for days and days as a way of desensitizing… if I were doing that, I would also try to remind myself just before every pull that “this is a trade”


Playing poker with stakes I seriously didn’t want to lose helped me a lot at a specific juncture with this issue…
fold….fold… fold….fold… fold… fold…call...fold….fold… fold….fold… fold… fold
… get the picture?
Note poker is a ‘different’ game – but still it’s subject to the basic ‘pain makes you stupid’ and ‘learning how to lose’ rules

Ultimately though, I think it is best just intending and practicing to get better and better at taking losses in real trading...becoming aware of the idiosyncracies of your own patterns...ferreting all of them out too ( because there's always more than one)... preparing ahead of time to recover more quickly than ever before...'working through' attachments... yada yada...

[gandalf33]

Thanks zdo for the inspirations of how to overcome this pain that I internally believe, is the source of failure for the majority of traders, whether they admit it or not (as in trading, the tree of consequences of feeling pain from losses is just huge).

But not for once have I given up the idea that I can master it. The goal is to become independent from personal feelings when seeing a trade come to an end, whether it ends with a gain or with a loss.

At this point in my life I believe this goal is achieved by embracing the naked fact of the slope of the equity curve. Does it go steadily up? Not by far. Does it yield a nice profit every month? Yes, it does. So? I have to accept it - my backtest shows this clearly and dearly - I might get 7, even 10 losers in a row, and most of my trading will be small losses accompanied by small wins with an occasional larger win, which does the profits. If I can't accept this then I'm not fit trading my strategy. I have to fully accept this fact, or not trade.

Once again as 'repetition is the mother of knowledge' as they say in my country: I have to know exactly, what I can expect from my pattern setups and trading rules (exit strategies meant primarily here). Knowledge of this is so powerful, it alleviates trading a bit immediately. If I study trade after trade of my historical trades and see with my own eyes again and again that small losses followed by small wins come in great numbers, with some mid-sized and a few larger wins somewhere in between, making a perfect month in terms of profits, then what the hell is my problem seeing small wins and small losses come in days after days in sim/live?

The problem is simple - the common knowledge that "to achieve, one has to build by adding more and more to it" (this is contrary to seeing chips fall off the equity curve) and that "if you do something and the result is not good, fix it", are too much ingrained in me. Can I be blamed for it? Abso-freaking-lutely not, as every sane person in the world who first approaches trading, provided he's more than 10 years old, has to have those already ingrained or else there's something wrong with him!

The matter in my eyes is simple - in terms of trading, overcoming the feelings resulting from those two ingrained statements, seeing adverse effects of those in real-time and perceiving them good.

And how to overcome an ingrained thing? By constant repetition.

In other words, the more trading you do, seeing your success, the less impact losses have on you. This immediately means one thing - the beginnings is what matters. You have to force yourself into trades and exit according your rules and not according fears resulting from those ingrained. Sounds familiar with a general advice "follow your plan"? ...

Also, how many people from 100 in real life are able to willingly overcome a habit they've been rehearsing since their early childhood, now being second nature to them? Perhaps 5-10%? Does this amount ring any bells?

Understanding why one feels what he feels counts for sooo much. That's one of the reasons why I will make it in trading, whatever the odds or obstacles.

In other terms, it's exactly what you wrote too zdo - poker = learn to lose, Larry's slot machines = learn to lose, preparing ahead of time, in my perception this equals studying your historical trades one by one for months and months and seeing a lot of losing streaks while being profitable month after month = learn to lose.... so thanks for your post once again. You are right with it, it's just that the aspiring traders have to see the reasons for what and why is happening to them.