Shared with us by my friend, Janice Dorn, M.D., Ph.D.
Illustration Copyright: Janice Dorn, M.D., Ph.D. All rights reserved
He that lives upon hope will die fasting…Benjamin Franklin
A man had constant dizzy spells and searched everywhere to find a cure.
He told a close female friend about it, who advised, “Walk around the block four times on Sunday afternoon.”
The man followed the advice, and then complained to his friend, “I did what you said, but still feel dizzy.”
She replied. “ Interesting. It didn’t help my dizziness either!”
Moral: Beware of foolish advice and most advice is foolish unless it comes from a person of great wisdom and even then—beware.
In trading and in life, it is critical to ask yourself: What sources of information are guiding my actions? Have I checked the facts, or am I simply relying on the word of this or that person? Have I applied common sense and my own study to this situation, or am I acting impulsively or instinctually? Is my primitive rat brain really out to get me this time, or am I taking the higher road and using my frontal brain areas to overcome fear and greed? This is a recurring theme in my writing and coaching where I show you how your brain sees and reacts to trading signals and setups and what to do to put the odds of winning in your favour.
Among the most important questions for you to ask is: What do you believe that is not true? This must become a mantra for you if you are to succeed in trading because you are trading your beliefs against the beliefs of others. Constantly question your own belief system. This leads you to question what others are saying. It forces you to turn down the noise and focus on the signal in the here and now.
Lazy thinking leads to lazy trading that leads to losses. The incessant drumbeat of self-deception is magnified by the unending amount of misinformation and disinformation that bombards your senses during the trading day. Be vigilant. Question everything and everyone, including me. There are no gurus except for you. You, more than anyone else in the world, know your risk tolerance. If a position is not working, it is not a good position. Get out. Cut losses. If you see another opportunity in the same stock, have the courage to get right back in. Don’t allow your rat brain to “dope-amine” you to the point where you deceive yourself by holding and hoping as losses mount— or are frozen in fear from taking even a small loss.
The schills of the financial markets are always hard at work to inundate and smother you with hype and deception. Learn to see past these, and become alert to anything that sounds just too good to be true. If it sounds too good to be true, it most likely is. The tragedy of trading is that that even the most alert and rational among us can be fooled. This is one reason why the search for trading truth is a lifetime journey that no one ever fully completes.
Hope is a good breakfast, but it is a bad supper…Francis Bacon
Thanks and Good Trading!
Janice Dorn, M.D., Ph.D.
Copyright and Illustration Copyright: 2006-2012, Janice Dorn, M.D., Ph.D.