The 21 irrefutable truths of trading pdf download

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You've discovered a title that's missing from our library. Can you help donate a copy? When you buy books using these links the Internet Archive may earn a small commission. Open Library is a project of the Internet Archive , a c 3 non-profit. Strategies for traders to master the most important trading tool - their minds. And within the mind of any successful trader exist surprisingly similar emotions and psychological beliefs.

The 21 Irrefutable Truths of Trading introduces these values and beliefs, then explains how traders can and must work to understand and harness these beliefs, and gain the psychological edge necessary to win in today's all-or-nothing trading battlefield. Divided into two parts--the first focusing on common strengths and weaknesses, the second on ways to enhance the strengths and control the weaknesses while trading--The 21 Irrefutable Truths of Trading introduces: Techniques to develop certainty, intuition, and discipline.

Technical analysis and trading methodologies to trade more effectively. How to properly align trading with the movement of the market. Why do we need to adopt new beliefs or change existing beliefs? To do otherwise will guarantee that we never become the consistently profitable trader we desire. As noted earlier, our ego is constantly attempting to balance three forces.

First, we have our conscious mind, which has rational, unemotional, and emotional thoughts and desires. Second, we have our unconscious mind, which also has desires and thoughts. Third, we have outside events acting on us. These events may or may not be controllable by our actions. They could have a neutral or a large impact on our physical or mental state.

Our unconscious mind will believe vividly imagined events as if they actually took place. It is incapable of telling the difference between what actually occurred and what we only imagined. If the event is imagined only once with enough emotional intensity, the unconscious mind may remember it forever. Likewise if an event is imagined repeatedly but with a low level of emotional intensity, it too may be remembered forever. The more vividly we can imagine an event using all five of our senses, the more real it becomes; and as the emotional intensity increases, the event has a greater and greater impact on our unconscious minds.

Although our conscious mind can be controlled by our beliefs, our unconscious mind is totally and absolutely uncontrollablebecause it is perceiving things that our conscious mind fails to perceive. Our unconscious mind is very aware of the events that we are experiencing and the thoughts that arise in our conscious mind. For example, in the s drive-in movie theaters flashed the words "eat popcorn" and "drink Coke" as subliminal messages on the movie screen.

Our unconscious mind was aware of the message even though our conscious mind was not. In a lot of ways our unconscious mind and our conscious mind act as filters for the information that passes in both directions. Our unconscious mind shapes conscious thought, and our conscious mind influences our unconscious.

As we shall shortly see, our unconscious mind is constantly attempting to meet certain needs and desires. By using our conscious mind, we can generate thoughts that influence our unconscious mind. In this manner we can increase our level of creative and intuitive thought. As we master our ego we are actually mastering our conscious thoughts, our unconscious desires or thoughts, and our perception of outside events. Mastery of our mind comes from awareness that there must be a change in our beliefs.

Successful traders know that they have mastered their ego when they are able to suspend judgment and conscious thought while trading. In short, while trading they are in the zone, though unaware of being there. In many sports competitions, the participants are totally unaware of their surroundings or what they are actually doing.

Motorcycle racers are truly oblivious to their environment and completely focused on the present moment. Mentally they are not reflecting on the accident that occurred back in turn four, or on the victory dinner scheduled for that evening. There is no fear because they are existing in the present moment. If asked after the race is over, they would say that they were one with the motorcycle and the racetrack. In short, they were in the zone. Similarly, many successful pit traders will tell you that their most profitable days are days when they are in the zone.

In other words, a trader in the zone is trading in the present moment, at one with the market, and oblivious to everything else. While existing in the zone, the trader has no ego, has suspended conscious thought, and has adopted the thoughts of the market.

The Power of Beliefs It is our beliefs that determine what we value most in life, the character traits we live by, and our ultimate destiny. Every individual has a multitude of beliefs. We have beliefs about love, success, failure, happiness, anger, resentment, contribution, driving a car, raising. Our beliefs are what our conscious mind uses to interpret the events that it perceives. A belief is nothing more than a feeling of certainty about what an event or feeling means to us.

Beliefs exist in our conscious and unconscious mind, and their validity is not questioned. When we were children, our beliefs came from the role models in our lives, mainly our parents.

As youngsters, we adopted their beliefs about what different events and feelings meant. Beliefs about love, sadness, and humor come primarily to mind. At that point in our lives the only reference points we had were our parents. When we entered school we suddenly had more role models teachers or our peer group ; these expanded references allowed us to come up with additional beliefs. As we began to mature, we experienced new events that caused us either pain or pleasure.

These new experiences led our mind to look for a cause, how recent it was, and if we had consistently felt this way in the past. Our mind then evaluated the validity of the event and whether it met our four primary needs, which are: 1. The need for a feeling of certainty. The need for a feeling of variety. The need to feel significant. The need to feel that we are loved and connected to others. We then took the new belief, based on the reference or event , and incorporated it into our conscious and unconscious mind.

For example, as we began to date we discovered that kissing was highly enjoyable mentally and physically.

Our mind experienced pleasure, and then began looking for the most recent "event" connected to the pleasure. The most recent connected to pleasure was the physical act of kissing. Our mind concluded that the act of kissing is what caused the pleasure. Our mind then attempted to determine if we consistently got pleasure when we kissed. After determining that we did consistently obtain pleasure by kissing, our mind needed to evaluate the validity that kissing was pleasurable by determining if kissing met our four primary needs.

If it did meet these needs, then the mind would conclude that kissing was a pleasurable activity. In other words, the need for certainty would be met if every time a kiss was experienced it was pleasurable; the need of variety would be fulfilled if there were a wide variety of kisses; the need for significance would be fulfilled if kissing made us feel significant to the other person; and the need for love and connection would be met if while kissing the other person the feeling of love and personal connection was experienced.

Since all four needs were met, the mind decided to believe that kissing was pleasurable. Our mind also constructed certain rules with our belief. Such a rule might have been that kissing our dog would not be enjoyable or that kissing someone with bad breath would not be enjoyable. That is why almost everyone experiences or believes there's pleasure in kissing. Likewise, as we kiss we begin to link pleasure to a person's face. Consequently every time we see that person assuming there has been no painful argument , we link pleasure consciously and unconsciously to his or her face.

This association occurs because our mind is certain that kissing the face is pleasurable, that the person kisses in a variety of ways, and that significance is experienced as well as love and connection.

Of course, in another person's belief system, our significant otherthe object of our affectioncould be a source of pain. Suppose that the person of our affection is consistently mean to Pat, a coworker. Soon Pat will have a belief that our significant other causes pain.

This is because whenever Pat sees that person, pain follows. If Pat is insulted, let's say immediately after seeing that person's face, Pat's mind will begin to link pain to the face. As Pat's mind evaluates the causethat pain immediately follows seeing that person's face and being spoken to, and that the pain is consistently feltit concludes with a perfectly valid belief that seeing the person's face is painful.

This is just the opposite of our belief! Allow me to ask you a question. If every time you received information that someone you cared about had died came from a phone call after 11 p. The way our mind creates beliefs is of vital importance to us as we change our own beliefs and create new ones. This is why some traders experience massive pain whenever the market creates a gap, while other traders anticipate great joy.

Ultimately as new traders begin losing increasing amounts of money, they form a belief that the methodology they are using is the culprit. They will then buy multiple trading programs in the hope of finding a "painless" one. In reality, of course, their beliefs are causing the pain. The pain is self-inflicted! Another interesting thing about beliefs is that the physical or emotional state that we are in when we experience a new event or point of reference will strongly influence both our perception of that event and how our beliefs about that event are shaped.

The market is able to inflict massive pain on traders only because their beliefs about themselves and the market are being violated. The mind is constantly attempting to meet its four primary needs. One of the many beliefs held by novice traders is that the market can be predicted once it is understoodso they have a feeling of certainty. Most novice traders find significance by being a "trader. The truth of the matter is that the market is unpredictable in an absolute sense, and the market will never provide certainty.

The certainty must come from the trader. The market will provide all the variety a trader could desire, so it does meet one of the four primary needs. The market will never provide significance or connection.

So of the four primary needs, only one is being met. This is why you as a trader must become aware of the power of your beliefs and change them so that they serve you. There are four types of beliefs that people possess. The first type is an opinion.

We link low levels of energy to our opinions, and we're relatively certain that we are rightbut we're not absolutely certain. When we have an opinion we will discuss its validity without getting overly upset.

The second type of belief is what we normally call a belief. We link low to medium levels of emotional intensity to most of our beliefs. Unlike an opinion, we are absolutely certain that a given belief is valid, and we're close-minded about its validity. The third type of belief is a conviction.

A conviction has a high level of emotional intensity linked to it. We are absolutely certain that our conviction is correct, and if our conviction is questioned we immediately get angry and defensive. The fourth type of belief is a rule. We use rules to determine if the virtues, vices, and emotional feelings that we value most are being met. We link a lot of emotional intensity to our rules.

We are absolutely certain that they are valid, and we become upset if they are questioned. The important thing to remember about beliefs is that they can either empower or disempower our lives. Our beliefs dynamically impact our unconscious mind, our character traits, and the vehicles we use to realize our values.

Our beliefs will powerfully influence the quality of the desires, thoughts, and intuitive ideas generated by our unconscious mind. Likewise, our beliefs impact the character traits that we as individuals rely on in our daily lives. Faith, confidence, discipline, courage, persistence, flexibility, integrity, and honesty, are all character traits that we call upon in our daily lives.

Our beliefs will determine the language we use with others and with ourselves. Beliefs dictate whether we treat others with love and respect or with anger and hostility. Our beliefs influence how we move our bodies posture, breathing, laughing. Perhaps most important, our beliefs determine how we obtain and perceive new information. Consequently our behavior is determined by our beliefs. Our behavior is how we express our human emotions and beliefs. The way we behave and interact with the market as traders is determined by the beliefs we possess about the market and our lives.

Our beliefs determine what we value most in our lives. Our values are emotional feelings that we hold to be most important in all areas of life. We would naturally like to experience these desirable values on a daily basis. Those values that we want to move toward are typically love, happiness, health, passion, intelligence, significance, success, contribution, freedom, gratefulness, and achievementall values that enrich our lives.

We can also have emotional feelings that we do not want to experience. These are our ''moving away from" values, and typically they are feelings of anger, failure, disappointment, loneliness, hate, despair, resentment, and other negative feelings. All too often when people are asked what they value most in their lives, they answer with the "vehicles" they value. What people think they value most is only a "vehicle" that their conscious or unconscious mind uses to meet what it actually values the most.

In other words, the mind is using a vehicle to obtain what it wants. It is our beliefs that determine what vehicle we use to obtain what we value, and need. A vehicle is what we use to obtain what we actually value or need. For example, if we ask four different individuals what they value most, they might answer: "My Mercedes and my home.

Do you care to hazard a guess on what that may be? The first person mentions her Mercedes and house. The truth of the matter is that the material possessions are giving her an emotional feeling that often equates with significance. She is using material possessions to feel significant. The second person is using violence against others or himself to fulfill their need of significance.

The third person uses compassion and love to obtain the feeling of significance. The fourth person is using extraordinary levels of skill and knowledge to achieve significance. Each person is actually valuing significance; however, all are using different vehicles to accomplish that feeling. The purpose of this example is to show that in order to accomplish what you value most in life, you need to become aware of the underlying reasons for your actions.

If you as a trader value your unique trading methodology, ask yourself whether it is a vehicle for something else. The vehicles that we use in our daily lives include controlling others or events, consistently doing or thinking the same thing, faith often part of religion , alcohol often abuse , drugs often abuse , food, changing jobs, moving, tearing others down, violence, material possessions, academic degrees, contribution, caring, compassion, gangs, sex, and joining a team.

All of these are different vehicles we use to obtain what we value or need. Some of the vehicles we use as traders are computers and related computer programs: back-testing and optimization of our trading methodologies; and three different forms of analysis: mental analysis, fundamental analysis, and technical analysis. The futility of using a vehicle to accomplish what we value is that we mistakenly believe that it is mastery or ownership of the vehicle that we really desire.

In actuality we want mastery of something else entirely. All traders, whether novice or professional, place a high value on the feeling of certainty. Unfortunately the vast majority of novice traders fall into the trap of believing that by using a computer a vehicle and purchasing an expensive trading program another vehicle , they will be able to accomplish what they valuenamely, certainty.

Other traders in an attempt to achieve certainty will talk to as many different traders a vehicle as possible. Still other traders most professionals will work toward certainty by focusing on their mental abilities and controlling their emotional states. These traders know that they will always act in their best interests with no fear or hesitation. The vehicle here is internal beliefs, and their associated rules.

The interesting thing to keep in mind is that the thoughts and desires of the unconscious mind will also influence your character traits, your behavior, and the vehicles you use to accomplish what you value most. All aspects of your mental, physical, and spiritual abilities are impacted by your beliefs. The ultimate goal of your beliefs is to obtain certainty, variety, significance, loving connection, growth, and a sense of contribution, and what you value most in your life.

Changing a Belief Remember that beliefs are nothing more than feelings of certainty about what different events mean. They exist in our conscious and unconscious mind, and they are not normally questioned. Our beliefs originate from our life experiences, references, and events as we perceive them.

Our perception is influenced by our beliefs and the physical and emotional state that we were in while perceiving certain events. In order to change our beliefs we need to understand a little bit more about points of reference. As we know, references can be real events or imagined ones, or they can be derived from other people i.

As we go through life we experience many different events. Our mind interprets and organizes these references in a manner that will either empower or disempower us. All too often, because of our beliefs, the mind interprets these events in a disempowering manner.

The first step is to make a conscious decision to change your existing beliefs by altering your perception of your life experiences in an empowering way. The mind interprets and gives meaning to everything you experience. That interpretation and perception is influenced by your beliefs, values, and expectations. One tool you can use to interpret new events in an empowering way is contrast. By contrasting any new experience with a less desirable experience, you can change your perceptions and feelings in such a way as to create an empowering belief.

For example, if as a trader you are stopped out of a trade and incur a loss, and subsequently the market reversesa shift that would have generated a profit if you had not used a stopyou can use contrast to change the experience from a negative one to a less negative and possibly positive one. You could contrast the small loss experienced by using a stop with the large loss experienced by a different trader a reference or by yourself at another time when a stop was not used.

The second step is that you must obtain more references. For many traders, new references wind up costing a lot of money. This is why determining the references of other traders and then using them is so beneficial to your bottom line. As we obtain more references, we have more choices available to us, and our faith increases that we will accomplish what we desire.

We can also obtain more references by reexamining our own life experiences. Often a negative or painful experience will have an empowering lesson embedded in it.

If we remember it as we normally would, our physiology will reflect the amount of pain mental or physical that we were experiencing. In such a state it becomes very difficult to perceive that experience in a way that we could learn and grow from it.

However, if we remember the experience while in a peak physiological state, and while asking questions that change our focus, our perception of the event may change enough so that we are able to learn something that empowers us. For example, if you had the misfortune a few months ago to be long when hogs went limit down for five consecutive days, the amount of pain you experienced might have been immense.

If you remember that experi ence as you normally would, it is doubtful that you will learn anything from it. However, by changing your physiology so that it is in a peak state, and then remembering the event, and asking yourself empowering questions, you greatly enhance your chances of gaining a new, positive perspective. So how do you change your physiology? If you want to change your physiology so that it is totally confident, then ask yourself a question.

Can I remember a time that I was totally confident of my abilities? What were you seeing, hearing, feeling, touching, and smelling? The last step is to adopt the same physiology as you had then. Breathe, move, and speak the same way. Now you have the physiology of a confident person. What happens if you have never felt totally certain? If you are sure that you have never experienced a feeling of certainty, then find a good role model and adopt his or her physiology.

Alan Greenspan comes to mind. When he goes on stage, does he move like he is doubtful? Of course not. He is absolutely certain about his outcome. Now that you have changed your physiology into a confident state, ask yourself questions that will help you perceive the event differently.

With the limit-down market experience, you might ask: "Was the market attempting to give me information that I ignored? How might I have interpreted the market action so as to exit the long position before the market went limit down?

Was there a way I could have hedged or offset my loss in a different market? How did I behave? If there was a valuable lesson in this experience, what was it?

How might I decrease my overall risk of being caught in a limit move in the future? The pain you experienced will remain; however, by learning something valuable from the experience, you can perhaps lessen the pain. Whenever we reexperience an event while we are in a peak state, our perception improves. This is why we will often find a nugget of wisdom that was overlooked initially. We can also obtain more references by using our imagination.

Imagination is ten times more powerful than willpower. By using our imagination, we can provide our mind with a clear vision and certainty. The secret of references is that the more we get that empower us, the better we become at evaluating references. The more our evaluation process improves, the. In addition, as we obtain more references, we become better at living life and experiencing empowering feelings.

The third step in changing a belief is to change the physical and emotional state you are in. When you change your physical and emotional state, you are changing your ability to perceive new information. Your physiology has a gigantic impact on what emotional state you are in. You will never see the winner of a race walking into the winner's circle with poor physiology shallow breathing, poor posture, slouching shoulders, etc.

The physiology of the loser is totally opposite the physiology of a winner. It is the physiology that determines the body's ability to obtain oxygen and circulate the blood. A person with poor physiology is unable to physically maintain the body. Consequently the mental ability to perceive and focus on new information is impaired.

The emotional state is also impaired. This is the beginning of a vicious circle: As the emotional state deteriorates, it affects the physiology even more. When we change our physiology, we're able to change our perception. As our physiology and perception begin to change, our emotional state will also begin to change, allowing us to perceive even more information.

As our perception increases, we can begin to examine the references that made up our beliefs and then ask intelligent questions. Our previous perception will then begin to change, because the underlying beliefs are beginning to change. Soon we introduce some doubt about the validity of our original perception of the reference.

The fourth step in changing a belief is to change your perception of the underlying reference. Your perception is altered by asking probing questions that access more of your innate intelligence. Questions also change your focus, which will affect how you feel and what you think. Since the mind deletes or ignores the vast majority of what it experiences, asking questions helps you become aware of what is being or has been deleted. When you change your perception of the underlying reference, you begin to form new beliefs that cast doubt on the original perception.

The fifth and last step is to make a decision that these new beliefs are valid. The ability to decide is a quality that too few people possess. The trader can change this belief assuming that he wants to by determining what references he is using to sustain that belief. By placing himself into a peak physiological state and a peak emotional state, our trader will be ready to examine his references.

Then, by asking intelligent questions, he will either validate his initial belief or introduce doubt, thereby allowing the creation of a new belief. He will change the focus of his mind. Often he will become aware of much of what his unconscious has been deleting, and he will be able to access more mental and physical resources. How many times has it been done? If it was so easy, why hasn't it happened more often? How many trading methodologies did the trader discard before finding the successful one?

If the computer program makes so much money, why is it for sale? If it does make money, how many traders can use it before it loses its effectiveness? What information am I failing to see? Ten years from now if I reexamined this issue, what new information would I see? What belief would empower me? What belief would allow me to see more information? Of course, outside of these four primary groups new commodity traders have a vast and varied background. This categorization is less true for stock traders.

Traders have lost billions of dollars in the pursuit of profits. They have spent millions of dollars to purchase computer trading programs, attend seminars, and read trading books. Sadly, the average new trader will lose most if not all of his or her trading capital within four to eight months of opening a trading account.

The fact that a constant supply of new individuals decides to start trading is evident by the low renewal rate for the two major trading magazines in the United States.

It is also obvious by the same ads being run in these magazines consistently targeting new traders. You can open any financial n. See Full Reader. Post on Oct 2. Category: Documents download. Tags: york mercantile andrew cardwell paul tudor good till producing shorter moving fairly advanced term moving.

McGraw-Hill and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Truths 1! Mil Truths. Tabernacle Truths - Christian.

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