You would think that my stepfather would have had some aha moments once he realized that his trading days were numbered. After coming home from the hospital and making a few more trade, he still continued to lose money. Even his brush with death did not shake him up enough to change his old patterns of trading.
My stepfather could not access his natural ability to act with confidence when trading. He could never see himself like a Stud Trader. This is probably true for many traders, and any trader can learn from my stepfather’s blocked experiences.
My stepfather never considered that he might need to work on his state of mind and the psychology that underlies trading. He simply believed that studying chart patterns without any written notes or JPEG pictures was sufficient. He believed that the entire game of trading was learning how to read the charts, and therefore he had little use for techniques that would neutralize his fear of loss. He needed to create aha moments to turn on the light switch in his dark room.
How to create aha moments
►►►►► Progression of aha moments
What are aha moments? Aha moments bring new clarity to your trading game. Aha moments upgrade your trading performance:
1. You see something new… something you may never have seen before. For example, my stepfather could have taken the controlled risk to keep a trading journal and noticed the results.
2. You see something that you have not grasped until now. For example, you now see the value of only making high-probability trades with reasonable gains. You now see the true irrational nature of Mr. Market, and you know how to deal with him.
3. You see something that is no longer just intellectual knowledge, but an inwardly operating reality or fact. For example, you see the value of only trading in the “sweet zone.” You now only make trade entries within the center and/or around the center of the strike zone without exception, every time.
These aha moments occur because you have taken the first steps to creating these moments. You stop trading to give yourself space for new insights and a fresh perspective. Depending upon your situation, this could be take minutes, hours, days, or months.
During this time away from trading, notice what catches your attention. Then take controlled risks to change your habitual patterns. Many Dud Traders that I’ve talked to over the years are often amazed at the new clarity which comes from taking time away from their trading desk.
Get out of routines to generate new and productive ideas
Back in the late 1960’s, the Xerox Corporation asked their brightest research scientists to spend a year researching whatever they desired, and then report their findings to the president and board. In effect, Xerox was giving their research scientists creative space to explore new ideas and projects instead of demanding that their scientists always keep productive...