Built Innerself Power and Trading Psychology

"It is a miserable state of mind to have few things to desire and many things to fear." Francis Bacon

One of the antidotes to fear is desire. Desire directs the focus of the mind away from what we don't want to happen to what we do want to happen.

Since our emotions are a response to a thought, what we focus our attention on creates a corresponding emotion. Our focus can create boredom or curiosity, regret or commitment, sorrow or gratitude, criticism or forgiveness, excitement or anxiety, and so forth.

There are many ways to direct our focus. Perhaps the easiest way is to select the questions we ask ourselves. Questions not only change the direction of thought, they presume the underlying truth of the question.

Mary Nathan had been taught by her mentor a powerfully effective method for trading the currencies. She studied the process and paper traded it. The results were extraordinarily profitable-on paper that is.

When it came time to go real time, Mary became overly nervous. Not surprisingly, her first trade contained an error. She sold short the Swiss Franc. When she received a signal to cover the trade, she sold again. (This is a common error for new traders seeking to get out of a short position. After all, if you want to get rid of something, you sell it. Not when you're short, you don't!)

As the trade was coming to an end, and the direction of the trade was reversing, Mary doubled her position. And she didn't even know it! By the time she discovered her mistake, Mary's profit had become a loss. Naturally, this unnerved her.

Thereafter when she went to trade, Mary would hear a little voice asking, "What if you lose?" The question was asked, and she had to follow it. She would go all the way to the end of the trade and feel the pain of losing. In her imagination she actually experienced the loss and believed it. The result of all this was that she sat there day after day intending to trade, fully committed to trade, but never doing anything more than paper trading. Because the results of the paper trading were good, Mary felt remorse and guilt for missing out. She became harshly critical of herself. "What's the matter with me?"

Again the question misled her. She went on a hunt for all that was the matter with herself. Daily frustration and self-deprecation reduced her to tears and lowered her self -esteem. Try as she might, she couldn't trade.

Sometimes you can't correct the thing all by yourself. As one of my friends says, "You can't hide your own Easter eggs." In this case, of course, Mary needed to find them.

Mary was determined to trade her system. She wanted very strongly to do it. But she didn't. That's the way it is. When the will seeks to do one thing, and the imagination envisions the opposite, the imagination wins every time. And the stronger the will power, the greater advantage the imagination has.

I taught Mary to change the direction of her imagination by changing the questions she asked herself. When the little voice said, "What if I lose?" I taught her to ask in an even louder voice, "What if I win? What if this trade is a big winner?" At that point, I had her visualize the chart going in the direction of her signal. Instead of feeling the fear of a loss, she began to feel the anticipation of a win. Through exercises and mental rehearsal, we did this over and over to correct her past habits.

Instead of saying, "What's the matter with me?" I taught her to ask, "How can I get better at this? In what ways am I already getting better?"

Questions direct the focus of the mind. The focus becomes the reality. Mary changed fear to desire. Mary began to trade, and trade profitably. You can too.