‘Chapter Thirteen Motivation and Reality ‘To take the master's journey, you have to practice diligently, string to hone your sills, to attain new levels of competence. But while ding so— land this s the inexorable facto the journey —you aso have tobe willing to spend most of your time ona plateau, to keep practicing even when you seem to be getting nowhere. —Goorge Leonard, Mastery (E.P. Dutton, 1991) Principles of Successful Trading + Define your loss, + Believe in yourself and in unlimited market possiblities. ‘+ Have a well-defined money management program. + Don't buy price. + Don't buy tips. * Don't trade angry oF euphori + Trade aggressively at your numbers and points. * Focus on opportunities. * Consistently apply your trading strategies and rules, + Be highly motivated and goal oriented. + The trend realy is your friend, + When in doubt, stay out. * Don't overtrade. + Know how to use orders. ‘+ Never average a loss. ‘+ Take small loses, big profits ‘+ Have no bias to either side of the market. + Don’t pyramid. mm Motivation and Realty * Act in certainty. * The market is never wrong. ‘Your Trading Game Plan Always + Remember, is sell or aye tt not about proving something —to your * Condition yourself regularly for trading succes, Motivation cleaner oa me now ask you the all- Peele ee Mimpotn qn Why do you Tis might ecm ike an odd er hi sion tak however, Thee Important one nw tt rt nae ere ene28 ‘THE INTUITIVE TRADER and sacrifice, not to mention hard work, trading requires. Think for ‘2 moment about anything that you ever did in your life that you truly enjoyed, whether it was playing ball when you were a child co going fishing or playing with dolls or trading, for that matter. ‘Consider how important your level of motivation was to the ulti- ‘mate result of whatever it was that you wanted to accomplish. It is always very interesting to me to realize how most traders never analyze in any serious way their real motivation for trading. So as you wrestle with this question—Why is it that you want to ‘rade? itis really important that you “know” the answer. People ‘rade for a variety of reasons—some to enhance ther ability to be- ‘come successful, others to militate against success in profound ‘ways. So i is important that you “know.” ‘Some people trade because for them trading i lke what the next vvegimatic was for Ralph Cramden. It is, plain and simple, a get- rich-quick scheme. That is not a good reason for trading, For other traders, itis all about excitement, and my attitude is: if that is the primary motivation for your trading, take up skydiving or bungee jumping, Don’t trade! It's too dangerous. Save yourself lot of pain. ‘As you know, trading can be a very painful enterprise. Most of you ‘know exactly what Iam talking about. "Another motivation for some traders is that trading becomes kind of lottery ticket. And this, Tbelieve, is very interesting because, you see, you can lose in trading, but I don’t believe you can lose the lottery. I mean, they might not pick your ticket, but psycholog- ically speaking, you don’t lose. I make this provocative statement because you know, after you buy that ticket, you are fantasizing ‘where you're going to build your next country house or to which Caribbean island you will sail your new yacht. But for the trader who views trading as a kind of lottery ticket, he can lose in a big ‘way, both psychologically and monetarily. “There are also other motivations. Some trade for entertainment but very soon find themselves playing a leading role in their own. real-life docudrama, and there are others who trade just so that they ‘an tell their friends at cocktail partes, “T'ma trader.” Ihave known aot of traders like that. Infact, consider the man who goes to a physician and complains about Raving a serious rash on his arm: “The man walks into a doctor's office and shows him a festering rash. The physician examines it and looks perplexed. But he s4y3- Yeu se frat of i att. of people trading is show ‘ow trader who walkin ec and eens ion all these things because As traders there is one real lity that is er your reality, your particular pe ot act 2 ton and that is poets focus. You must possess an imilar point of view, ference between an26 ‘THE INTUITIVE TRADER StePs, soybeans, etc) we are looking atthe same thing sharing in a common experience. Nothing could be farther from the truth. ‘We may be looking atthe same mazkels, ut we are not seeing the same things. We are not hearing the same thing, and we are not feeling the same thing. Think about anything that you do in “real- ity” We may all bein the same room, and at that moment in ime We all may have a totally diferent reality. Have you ever walked ‘out on the stroot after not having a good night's sleep. When that happens, doesn't the world look a litle different outside? If you have a toothache, or if you, let’ say, lose a boatload of money in the market, things look a litle different, don’t they? How about ‘when you aren love? Boy the world really looks good then, doesn’t it? The points realty is totally based on perspective. So how would that relate to trading? Wel, the answer is obvious. You have to un- derstand what your reality is when you are analyzing and trading the matket. And you see, as we have leamed, our reality of the market is dependent on what is available tous at any given time. ‘The point is, we project our realty. We earnot do otherwise. Some time ago when T was in Chicago, this point was dramatic cally brought home to me. I was on an elevator going up to my office, and there was a lady standing, next to me who kept staring at my tie. She tured to me and sai, "Oh, what a great te.” She then closely inspected the ie. As she was leaving the elevator, she said to me, “They are strawberries, aren't they?” and walked off found this interchange most curious because, You see, there were ‘no strawberries—only large red and blue polar bears-—on my ie. "found this very interesting. said to myself, suppose this woman went into grocery store and purchased some strwberies, got hhome, placed them on her kitchen table, and was consumed by @ polar bear. That would be a bad batch of strawberries! The funny thing is that happens in the market all the time. How many times éo people see bears when there are “really” only bulls? Knowing your market reality and consistently applying your proven market strategies, by isolating your particular focus eosis- tently while atthe same time feling good thats to say, effortless and automatic—is the ultimate key to success. ‘Many players believe they must do something very special and diferent on “big” points. As a consequence, players often break from the patter and style of play that got them tothe big point Motivation and Realty zr tegy breakdown. Going for ticularly tempting on the critical situation over with), but generally thas been my goal in The Intuitive Tr have leamed and believe about the na ing career over many years, my ving profesional waders he Ais of inerviews with some ofthe wars op {feel extremely fortunate tobe able to have a carer ins feld that °8 opportunities to learn although at times things about myself and how other traders ‘commit myself to learning ‘concentration, attitude, man.“THE INTUMTIVE TRADER 228 me sys nt se epee pie aeons Sooner Seen aero een eee oe ee re erin ae oben ere SSS ee Set sna eter aerate atunnel eesti sein and ate ioe eee Joe ee See ee ete fot have to be a scocecard of soltevaluation whan It can ba 360- see = eter eere eg nsermtten cece em Ee oi For Further Read ing et ng Brac Roland, Miniraps: Mastering the Iner Word of Icestng Homewood, IL: Dow Jones-rwin, 1988 Baruch, Bemard M. Baruck: My Own Story New York: Holt, Rinehart and Winston, 1957. Benson, Herbert. Your Matinum Mind. New York: Avon, 1967 akevon the Reaction Response. New York: Tones Hooks, 194. <= Phe Mindy Eject. New York: Simon te Schuster, 197, Beane, Tht Relatation Response. New York: Wiliam Morse Yor, Beme Ere: Intuition and Ego Sates. New York: Harper ara Rey ‘977, Gyasie Nature of Intuition.” Paychiatric Quarterly, vol. 231, 1948, pp. 203-206. ‘of Psychoanalysis.” ee ies en te soe alt ly Een meme rm 1978, Comer, P, ed. The Random Character of Stock Market Prices. Cam- bridge, MA: MIT Press, 1964. Cosine Norman. The Healing Heart. New York: W. W. Norton, 1963, Suikszentmihalyi, Mihaly. Flow. New York: Harper Collins 1951 Doboeck, G.J. Tang on th Edge. New York: Joh Wiley and Sons, 1994, Demark,T.R. The New Science of Technict! Analysis. New York: John Wiley and Sons, 1994, Pouglas, Mark. The Disciplined Trader. New York: New York Institute ‘of Finance, 1990. 29