



Many of the thinking patterns that adversely affect our
trading are a function of the natural ways in which we were brought
up to think and see the world. These thinking patterns are so deeply
ingrained that it rarely occurs to us that the source of our trading difficulties
is internal, derived from our state of mind. Indeed, it seems
much more natural to see the source of a problem as external, in the
market, because it feels like the market is causing our pain, frustration,
and dissatisfaction.
These are but a few of the many
errors traders perpetuate upon themselves time and time again.
These are not market-generated errors. That is, these errors do
not come from the market. The market is neutral, in the sense that it
moves and generates information about itself. Movement and information
provide each of us with the opportunity to do something, but
that's all! The markets don't have any power over the unique way in
which each of us perceives and interprets this information, or control
of the decisions and actions we take as a result. The errors I already
mentioned and many more are strictly the result of what I call "faulty
trading attitudes and perspectives." Faulty attitudes that foster fear
instead of trust and confidence.
Trading presents us with a fundamental paradox: How do we
remain disciplined, focused, and confident in the face of constant
uncertainty? When you have learned how to "think" like a trader,
that's exactly what you'll be able to do. Learning how to redefine your
trading activities in a way that allows you to completely accept the
risk is the key to thinking like a successful trader. Learning to accept
the risk is a trading skill—the most important skill you can learn. Yet
it's rare that developing traders focus any attention or expend any effort to learn it.
hesitation or conflict, and just as freely and without hesitation or conflict,
admit it isn't working. They can get out of the trade—even with
a loss—and doing so doesn't resonate the slightest bit of emotional
discomfort. In other words, the risks inherent in trading do not cause
the best traders to lose their discipline, focus, or sense of confidence.