The purpose of this thread is to share what have been learned from trading, for example, an inspiring idea gained from reading an excellent book, a valuable lesson obtained from one’s own trading experience. or wonderful knowledge learned from others’ teaching. Welcome everyone to share your valuable findings, thoughts or insights. Thank you!
I would like to share my thoughts on pages 179-183 of the book Trading in the Zone by Mark Douglas. Thought 1： I particularly like Mark’s definition on self-discipline ---- creative and effective: it is a mental technique to redirect our focus of attention to the object of our goal or desire, when that goal or desire conflicts with some other component of our mental environment. Based on this definition, self-discipline is not a personality trait; people are not born with self-discipline; as a technique to be used in the process of personal transformation, anybody can choose to use self-discipline. Mark used his journey of becoming a runner to illustrate the underlying dynamics of how to apply the self-discipline technique effectively. His sharing I believe can inspire us to achieve consistency in many aspects such as how to be a consistently successful trader, how to consistently motive kids to reduce screen time, or how to transform oneself consistently, with creativity, insight and dedication。
Yes, self discipline, now when those habbits become,- just the way of being, your definition of who you are, it's usuall/normal and you no longer think otherwise. But used to be days, when you sit next to a screen, and like some crack junkie, holding the mouse like needle & about to receive a dose, from a completely stupid entry to a trade, without clear reason why (degenarate gambler), or even worse, the same plus you told yourself not to do so & you still do. One thought helped me : either you stop doing that or you're out of the game & the next thing that you gonna trade, will be beer bottlecaps and sunflower seeds.
Your sharing i think is closely related to one of the themes Mark has emphasized in Trading in the Zone: we think we know what needs to be done and how it should be done, but we often do the opposite. It implies that we in fact do not really know it. Mark wrote on page 61: As I mentioned in the last chapter, most traders erroneously assume that because they are engaged in the inherently risky activity of putting on and taking off trades, they are also accepting the risk. I will repeat that this assumptions couldn't further from the truth. "One thought helped me : either you stop doing that or you're out of the game & the next thing that you gonna trade, will be beer bottlecaps and sunflower seeds " Great! Thanks for sharing.
Thought 2: Mark illustrated the following underlying dynamics of how self-discipline works in becoming a runner. The ultimate goal is to create a belief in his mental framework " i am a runner". In order to do that, Mark designed a series of subtasks/experiences consistent with the belief. Each time he finished a subtask, no matter how small the task is, he added the energy to the belief " i am a runner" and drew the energy away from all other beliefs against the belief. Interesting to observe that the growing path of the belief " i am a runner" looks like a up channel! The growing path of the belief ” i am a consistently successful trader " i feel can be drawn similarly. At the beginning, we need to employ the technique of self-discipline to make the belief as a dominant, functional part of our identity. Once it becoming "who we are ", we will no -longer need self-discipline, since the process of "being consistent" will become effortless. We won't have to try to be consistent because it will be a natural function of our identity. ( page 183) Page 184: For example, predefining your risk is a step in the process of "being consistent". If it takes any special effort to predefine your risk, if you have to consciously remind yourself to do it, if you experience any conflicting thoughts (in essence, trying to talk you out of doing it), or if you fid yourself in a trade where you have not predefined your risk, then this belief is not a dominant, functional part of your identity. It isn't "who you are". If it were, it would not even occur to you not to predefine your risk.
The market has made its choice. If next up m line cannot break above effectively 3615, highly likely there will be a new swing low today. Note: corrected a typo in the previous chart here.
12/1/2020: Higher low can not be certain when it happens at the moment, therefore one good way is to consistently search for it. How to consistently figure it out by willing to fully accept the possible loss /cost i feel is both art and science. Note: XLF likely go up to test 31 based on daily/weekly chart.