|
|
|
|
|
|
|
Novice traders will represent the loss in a very negative manner, typically by strengthening their disempowering beliefs and other vices. |
|
|
|
|
|
|
|
|
When you had a financial loss, what emotions did you experience? Was it anger, disappointment, frustration, fear, resentment, intense anxiety, or relief? Did you experience all of them? Most novice traders will see their loss as confirmation that their trading abilities are not adequate enough to anticipate the market's direction. All traders experience disappointment when their expectations are not fulfilled. Whenever they enter a trade, they will have certain expectations about the outcome. Naturally they will expect to be right about the direction of the market, so that their equity grows. In many cases they will expect that their unique perception of the market will allow them to enter into the trade, and that the market will then follow their lead. They will also expect the market to behave in a certain semilogical manner. As we can see, there are many expectations that a novice trader will have on one trade. |
|
|
|
|
|
|
|
|
People get upset when their expectations are not met. If you expect to make money on entering a trade, then you are setting yourself up for disappointment. The market cannot be predicted with absolute certainty. However, by diligent research you will find a pattern or patterns that you believe work most of the time. So instead of entering into a trade with an expectation that might not be fulfilled, generating disappointment, you want to enter into the trade with an expectation that probably will be fulfilled, generating empowering feelings about yourself. This expectation could be that the market will tell you after you enter the trade if you are going to make money based on your observed pattern. With this expectation you will not get upset, since the market will always tell youthat is, your expectation will always be met. A different empowering expectation could be that by entering the trade you will find out if your pattern will work this time or not. If it works, you made some money; if it doesn't, then you lost some money. In both cases your focus has changed, and you are in charge. |
|
|
|
|
|
|
|
|
An expectation is nothing more than a belief that an anticipated event or outcome will come to be. In other words, it is a belief that another belief will be validated. Let's say we have a belief that a trading methodology using a breakout of a point-and-figure chart combined with a dual moving-average crossover is highly profitable. We have a multitude of beliefs here. We have a belief that a point-and-figure chart is a valid way to perceive the market, and another belief that a breakout is significant. We have a belief that dual moving averages have validity, and another belief that when the shorter-term average crosses the longer-term average it is significant. If we then enter a trade based upon that methodology, we will naturally expect a |
|
|
|
|
|