TFMS Lesson

Discussion in 'Educational Resources' started by Brandonf, Apr 3, 2003.

  1. Brandonf

    Brandonf ET Sponsor

    Every other Weds we give a lesson in the Live Trading Room. The focus can be on anything from setups and risk managment to the psychology of trading. I have been getting very good feedback on the class I gave last night, so thought I would share it here with you guys at ET.

    [21:05] <brandon> Tonight I'm going to talk about maintaining a confident, centered and focused state of mind.
    [21:05] <brandon> And about reaching your goals.
    [21:06] <brandon> one of the saddest things is to talk to a trader who says "Im the most unlucky person in the world"
    [21:06] <brandon> because it does not have to be true
    [21:06] <brandon> but it will be true until that person stops thinking it is
    [21:06] <brandon> I have met so many people who have a good methodology or system
    [21:06] <brandon> but lack the confidence to stick to it
    [21:07] <brandon> esp. if it hits a small losing period
    [21:07] <brandon> confidence and focus are your number one edges
    [21:07] <brandon> because with out it
    [21:07] <brandon> no other edge you have means anything anyway
    [21:08] <brandon> The very best traders in the world all set an objective, be that an amount of money they want to make, a percent return to make or a total number they want to reach into their account.
    [21:08] <brandon> Once they have done that then everything they do is done in order to stay in line with this goal.
    [21:09] <brandon> One of the most common pieces of advice that I always hear in chatrooms is dont set a dollar goal because it puts extra pressure on you
    [21:09] <brandon> and its really BS
    [21:09] <brandon> because if you don’t have a goal
    [21:09] <brandon> if you don’t know where you are going
    [21:09] <brandon> you will fail
    [21:10] <brandon> Setting a goal and COMMITING to it is a huge challenge for most people
    [21:10] <brandon> because you put a lot of yourself on the line once you do it
    [21:11] <brandon> But I can guarantee that Ohio State did not become the National Champions with out setting out to do so, and the Bucs did not win the Super Bowl with out setting out to do it, and KNOWING IN THEIR HEARTS THAT THEY COULD DO IT.
    [21:11] <brandon> Tiger Woods does not win Golf Tournaments without setting out to do so
    [21:11] <brandon> and great traders don't become great traders with out very consciously making the decision to do so.
    [21:12] <brandon> Trading is almost entirely a mental game
    [21:12] <brandon> Once we have the basics down, trends, support, resistance, order entry etc.
    [21:12] <brandon> it is simply a matter of DOING IT
    [21:13] <brandon> It is probably very similar to archery in that physically it does not take a lot to do it but to be a world class archer you need to be able to clear your mind and focus because any tension you carry will show up in your aim.
    [21:14] <brandon> Most people have a system that will work.
    [21:14] <brandon> Dont believe me? Show me a paper trader who loses consistently. It does not happen.
    [21:14] <brandon> finding a winning method is not the hardest part of trading
    [21:14] <brandon> staying with it can be
    [21:15] <brandon> People get in their own way, they are their own worst opponent and dont let their system win for them.
    [21:16] <brandon> When I began trading I was pretty much like everyone else out there in that I was always tripping over myself.
    [21:17] <brandon> I would consistently jump stops, buy and sell early with out a plan.
    [21:17] <brandon> I would pass on a good trade because the last two had lost
    [21:17] <brandon> or I would commit a lot when I should only be committing a little
    [21:18] <brandon> Tonight id like to go over a few of the things that I was taught at the Mayo Clinic Pain Management Center.
    [21:18] <brandon> This may not seem like it would have a lot to do with trading
    [21:18] <brandon> but it definitely was
    [21:19] <brandon> There is one member in here that has a chronic pain situation similar to what I have
    [21:19] <brandon> this is just a side note
    [21:19] <brandon> and he was having a hard time trading
    [21:19] <brandon> I knew though he could do it just by using the same principles in his trading that he did to get on about his life
    [21:19] <brandon> he is now doing very well
    [21:20] <brandon> after the class if he wants to share any of his experiences with us that would be great
    [21:20] <brandon> but back on track
    [21:20] <brandon> As many of you know I have a neurological condition which leads to my always having a "background" migraine headache.
    [21:21] <brandon> These sometimes "breakout" and then I become pretty miserable.
    [21:21] <brandon> Several years ago when I first started to be ill with it
    [21:21] <brandon> I really did not know how to deal with life with them.
    [21:21] <brandon> for over 1 year I was bed ridden with this
    [21:22] <brandon> and spent over 150K on doctors, tests and trying to find a miracle drug
    [21:23] <brandon> Eventually I was lucky enough to end up at the Pain Management Clinic run by Mayo in Rochester and they taught me how to manage myself.
    [21:23] <brandon> I still have the headaches and I had to accept that I would always continue to have them.
    [21:23] <brandon> To not accept that would have been to continue living life in bed (not living)
    21:24] <brandon> the headaches have not gone anyplace, but my focus is not on them.
    [21:24] <brandon> I choose to focus on other things and this has allowed me to life a relatively productive life since I was there.
    [21:25] <brandon> The first thing you need to do in order to reach peak performance in your trading is commit to do so
    [21:25] <brandon> you must come up with a goal
    [21:26] <brandon> You need to have an objective in mind that you want to reach.
    [21:26] <brandon> Commit to it, commit to trading to win.
    [21:26] <brandon> Most people trade to not lose
    [21:27] <brandon> and in the end they defeat themselves
  2. Brandonf

    Brandonf ET Sponsor

    [21:27] <brandon> take the initiative and trade to win
    [21:27] <brandon> Set a high goal that is reachable
    [21:27] <brandon> this will create a tension area
    [21:27] <brandon> and this is positive
    [21:28] <brandon> it is a creative tension from being where you are now vs. where you want to be.
    [21:28] <brandon> It is what allows you to grow.
    [21:28] <brandon> Once you have your goal totally commit to it
    [21:28] <brandon> live your entire life consistent with that goal.
    [21:29] <brandon> Nothing should get in your way.
    [21:29] <brandon> Live in the moment according to your plan without distractions
    [21:30] <brandon> PROMISE THE RESULT
    [21:36] <brandon> the last thing I had said was about promising the result
    [21:36] <brandon> and not just to yourself
    [21:37] <brandon> totally commit your entire being to it
    [21:37] <brandon> and really mean it
    [21:37] <brandon> promise it to someone you care about
    [21:37] <brandon> put the additional tension on yourself
    [21:37] <brandon> when you do this
    [21:37] <brandon> your mind musters all of its resources for you to succeed
    [21:37] <brandon> and I will tell you this is the scariest thing in the world to do
    [21:38] <brandon> esp. when you are not doing that well as a trader
    [21:38] <brandon> to go to someone who means the world to you
    [21:38] <brandon> and promise with all of your heart that you are going to succeed
    [21:38] <brandon> and MEAN IT
    [21:38] <brandon> and DO IT
    [21:38] <brandon> 95% of people will never do it
    [21:39] <brandon> ok moving on
    [21:39] <brandon> to operate at peak levels
    [21:39] <brandon> and maximize your chances of success
    [21:39] <brandon> you need to be operating in a totally relaxed and centered state of mind
    [21:40] <brandon> Ill share with you quickly a method for centering
    [21:40] <brandon> you can do it any time
    [21:41] <brandon> try it before you go to bed at night
    [21:41] <brandon> and before you start to trade in the day
    [21:41] <brandon> it takes about 20 minutes
    [21:41] <brandon> start off by focusing on your breathing
    [21:41] <brandon> breath deeply in and out and focus on your breath as it enters and exits your body
    [21:42] <brandon> breath deeply in and out and focus on your breath as it enters and exits your body
    [21:42] <brandon> if someone has logs of this class at the end of the lesson please send it to me ( since I lost part of it by being discoed. Thanks.
    [21:43] <brandon> try to feel the air as it moves through your nose and it fills your lungs
    [21:43] <brandon> while you do this, focus on your chest walls and belly expanding as your breath
    [21:43] <brandon> then breath out through your mouth and and note the passage of air
    [21:44] <brandon> pay attention to your breath and how it occurs naturally and without effort
    [21:45] <brandon> the air moves slowly in and out of your lungs almost with out effort
    [21:45] <brandon> now you should allow your breathing to become even more calm and smooth
    [21:45] <brandon> notice how your body feels
    [21:46] <brandon> also notice how calm you become while focusing on your breathing and forgetting your other concerns
    [21:46] <brandon> now allow your focus to shift to other parts of your body
    [21:47] <brandon> keep breathing deeply and keep your eyes closed
    [21:47] <brandon> then put your arms gently on your thighs and make a fist with your right hand
    [21:47] <brandon> press your fingers tightly against your palm
    [21:47] <brandon> tighten the muscles in your wrist and forearms until you feel some mild tension
    [21:47] <brandon> take a deep breath and hold it briefly
    [21:48] <brandon> now let the breath out as you let your muscles relax
    [21:48] <brandon> let them go limp as the tension drains
    [21:49] <brandon> note the relief of this relaxed state
    [21:49] <brandon> and how it differs from the tense state
    [21:49] <brandon> take a few deep breaths again
    [21:50] <brandon> only focusing on your breathing and repeat the process with your left arm
    [21:50] <brandon> next focus on your head and face
    [21:50] <brandon> close your eyes tightly and stretch your forehead muscles up as far as you can.
    [21:51] <brandon> pull the corners of your mouth back until you feel the tension all over your face
    [21:51] <brandon> experience this sensation of stress
    [21:51] <brandon> now breath it out and let it go
    [21:51] <brandon> notice the difference between stress and calm again
    [21:52] <brandon> keep repeating this process through your neck and shoulders
    [21:52] <brandon> your chest and abdomen
    [21:52] <brandon> finally to your legs and ankles
    [21:53] <brandon> focus on your breathing
    [21:53] <brandon> now focus on a place that you create in your mind that you would like to be
    [21:53] <brandon> think of this relaxing place
    [21:53] <brandon> (This is getting to a point that it will directly relate to your trading, so hang with me)
    [21:54] <brandon> this can be a beach, a mountain
    [21:54] <brandon> whatever it is for you
    [21:54] <brandon> feel the sensations, smell the smells
  3. Brandonf

    Brandonf ET Sponsor

    [21:54] <brandon> really be there in your minds eye
    [21:54] <brandon> you will need to be doing this for several weeks before you can apply this to your trading
    [21:55] <brandon> but once you are able to directly apply it, which is what im going to go over next
    [21:55] <brandon> it is probably the single most powerful tool you will have
    [21:55] <brandon> do this exersise every single day until it is very easy for you to become focus and relax
    [21:56] <brandon> you can also use this for relieve mild to moderate pain
    [21:56] <brandon> once you can get there very quickly and easily
    [21:56] <brandon> almost on demand
    [21:56] <brandon> your next step is to apply it directly to your trading
    [21:57] <brandon> what you will want to do
    [21:57] <brandon> where as before you had been visualizing the perfect place
    [21:57] <brandon> now visualize yourself executing and trading the perfect trade
    [21:57] <brandon> watch yourself at your desk as your respond to the markets information
    [21:58] <brandon> plan out the trade in your mind while you are in this relaxed and centered state of mind.
    [21:58] <brandon> In this state
    [21:59] <brandon> what you now need to do is start to visualize yourself trading in line with the success of the goal you have established for yourself.
    [21:59] <brandon> This is a technique used very often by Olymic skaters and wieght lifters
    [21:59] <brandon> before they even get on the ice they will spend a lot of time visualizing the execution of the performance
    [22:00] <brandon> they will execuse a triple jump in their mind before they ever do it on the ice
    [22:00] <brandon> and they will work out the details there
    [22:00] <brandon> work through the difficulties
    [22:00] <brandon> as a pratical trading example I had a 10 contract hang up
    [22:01] <brandon> it was not a matter of not having the financial capital to do 10 of them so much as not having the emotional capital to do it.
    [22:01] <brandon> so I had to bring myself to a centered state and then see in my mind myself executing 10 or more contracts
    [22:02] <brandon> being in the flow and doing it according to my plan for myself
    [22:02] <brandon> when I started doing this
    [22:02] <brandon> I actually couldn't even do it in my mind
    [22:03] <brandon> I could not see myself successfully executing and trading 10+ contracts
    [22:03] <brandon> when this occurs you have to simply acknowledge the thought and let it pass
    [22:03] <brandon> maintain yourself in a centered manner
    [22:04] <brandon> and allow yourself to experience the success you are building toward
    [22:04] <brandon> with practice you will be able to do it in your mind
    [22:04] <brandon> and once you have done that and gotten the execution down there
    [22:04] <brandon> it is much less of a problem to do it in real life as you have in a sense already been there
    [22:04] <brandon> at the end of each trading day it is helpful if you review all of your trades that you took in your mind
    [22:05] <brandon> find the discrepancy between were you are and were you want to be and begin to correct it.
    [22:06] <brandon> after you have visualized your success you must stay involved in the market
    [22:06] <brandon> if there is nothing for you today
    [22:06] <brandon> that is fine, but be prepairing for tomorrow.
    [22:06] <brandon> When you are in the trades during the day, stay in a state that is as close to centered as you can get
    [22:07] <brandon> eventually you will stay there most of the time
    [22:07] <brandon> and think of the process of the trades not the results at this time
    [22:07] <brandon> its important to focus on the process because we already know we have an edge
    [22:07] <brandon> and focusing on the immediate result of each trade can cause you to become distracted and remove you from a centered state
    [22:07] <brandon> at the point of execution you need to get to a point were your mind is clear and only focus is on the process because having too much concern at the time of execution is like being a tense archer
    [22:08] <brandon> then you will miss.
    [22:08] <brandon> After every single trade you make
    [22:08] <brandon> you should go back over that trade
    [22:08] <brandon> and compair how you ACTUALLY traded it
    [22:08] <brandon> vs how you will trade it if you are doing everything in line with your vision of success.
    [22:08] <brandon> whatever the differences are
    [22:08] <brandon> work to fix them.
    [22:09] <brandon> and finally I have to bring up that promise again
    [22:09] <brandon> it cements it
    [22:09] <brandon> it puts it together
    [22:09] <brandon> and doing all of this stuff above
    [22:09] <brandon> but failing to promise it
    [22:09] <brandon> you might as well not do the other stuff
    [22:09] <brandon> the promise forces you to stay on path
    [22:09] <brandon> and it puts some positive creative tension in the picture
    [22:09] <brandon> ok thats what I have