Mark Douglas Trading Psychology 1/7 Intro

Summary

In this insightful presentation, the speaker delves into the psychological aspects of trading, emphasizing the importance of mindset over technical analysis. He shares his journey of writing a third book aimed at addressing the gaps in understanding for novice traders, highlighting the need to change fundamental beliefs about market nature and trading psychology. The talk explores the challenges of transitioning from a mechanical to a discretionary trading approach, the impact of personal agendas on trading decisions, and the necessity to accept risk and think probabilistically. The speaker's anecdotes and experiences provide a relatable context, aiming to guide traders towards a consistent and successful trading mindset.

Takeaways

• 📚 The speaker is working on their third book, which aims to address the needs of novice traders who may not be able to relate to the content in their previous books.
• 🤔 The speaker emphasizes the importance of understanding that trading involves probabilities and that each trade's outcome is unknown and unknowable.
• 🧐 The speaker highlights the difference between mechanical trading, where entry and exit points are clearly defined, and discretionary trading, which requires a high level of mental and emotional control.
• 💡 It is suggested that many traders are not aware of their state of mind and how it can significantly impact their trading decisions and outcomes.
• 🎯 The speaker discusses the concept of 'threshold of consistency', a mental state that traders must reach to achieve a consistently rising equity curve.
• 📉 The speaker shares personal anecdotes to illustrate the challenges and lessons learned from years of trading and teaching trading.
• 📈 Understanding order flow is crucial for traders to think correctly about market movements and to avoid common misconceptions.
• 🚫 Fear and anxiety have no place in successful trading; traders must be completely objective and detached from the outcome of each trade.
• 🎲 The speaker compares trading to gambling, explaining that while each trade is a guess, having an edge through analysis can lead to consistent profitability over a series of trades.
• 📝 The process of writing the new book has been challenging for the speaker, as they aim to convey complex concepts in a way that is accessible to traders at all levels.
• 🔍 The speaker encourages traders to be aware of their personal agendas that may interfere with their trading and to strive for a state of zero fear and complete trust in their trading abilities.

Q & A

Why is the speaker writing a third book on trading?

The speaker is writing a third book because they realized their previous books, 'The Disciplined Trader' and 'Trading in the Zone', made assumptions that were not relatable to novice traders. They encountered a group of traders who were clueless about trading psychology and realized the need for a book that addresses trading issues from a ground zero perspective.

What was the speaker's experience like when attending a user group meeting in Phoenix?

The speaker was taken aback by the enthusiasm of the group towards their trading company and its products. However, they were also surprised by the lack of understanding the group had about trading, despite their excitement, which prompted the speaker to consider writing a book for such traders.

What are the two categories of coaching clients the speaker has worked with?

The speaker's coaching clients fell into two categories: professional traders who had been in the business for a long time and understood the importance of psychology in trading, and traders who had lost a lot of money and were at a point of complete exasperation, ready to do anything to improve.

Why did the speaker feel the need to break down trading concepts to a core level?

The speaker felt the need to break down trading concepts to a core level to make them understandable for people new to the business. They realized that their previous books did not address the issues in a way that novice traders could relate to.

What is the significance of understanding order flow in trading according to the speaker?

Understanding order flow is significant because it helps traders to think correctly about the market. Without understanding order flow, it is difficult to learn how to trade effectively, as it impacts how prices move and how traders should interpret market movements.

What is the threshold of consistency mentioned by the speaker?

The threshold of consistency refers to a mental state where a trader has broken through the boom-and-bust cycle of equity and has achieved a consistent performance in trading. It is a mindset that has nothing to do with methodology but is crucial for successful trading.

Why did the speaker feel that their previous books were not effective for novice traders?

The speaker felt that their previous books were not effective for novice traders because they were written with assumptions based on the speaker's experiences and did not take into account the perspective of someone who does not know anything about trading.

What is the importance of being detached from outcomes in trading?

Being detached from outcomes in trading is important because it allows traders to be completely objective and to execute their trades properly without being influenced by emotions or the desire for a particular outcome.

What are the four primary trading fears mentioned by the speaker?

The four primary trading fears mentioned by the speaker are the fear of being wrong, the fear of losing money, the fear of missing out, and the fear of leaving money on the table.

How does the speaker define mechanical trading?

Mechanical trading is defined by the speaker as a mode where traders follow a set of rigid criteria that define entry and exit points. The market must conform to these rules, and there is no room for subjective interpretation or decision-making.

What is the main challenge the speaker faced while writing the third book?

The main challenge the speaker faced while writing the third book was breaking down complex trading concepts into a simple and understandable format for novice traders, without making assumptions about their prior knowledge or experience.

Outlines

00:00

📚 Returning to Writing After a Hiatus

The speaker acknowledges their return to writing after a three-year break, with their last presentation in 2012 for John in Chicago. They express concern about the pressure to perform well and the challenge of getting started after such a long time away from this activity.

05:01

🤔 The Motivation for a Third Book

The speaker discusses the reasons for writing a third book, which stem from an experience at a trading conference eight years prior. They were struck by the lack of knowledge among novice traders and realized that their previous books did not address the needs of those just starting in the business. This realization prompted the decision to write a new book aimed at this audience.

10:02

📉 The Challenge of Educating Novice Traders

The speaker reflects on the difficulty of teaching novice traders, who often have unrealistic expectations and a lack of understanding about the nature of trading and price movement. They emphasize the importance of changing one's mindset and assumptions about trading to achieve success, and the need to write a book that can guide these individuals from the ground up.

15:03

🎯 The Importance of Detachment in Trading

The speaker highlights the concept of detachment from outcomes as a key to successful trading. They contrast this with other professions where being attached to outcomes is essential. The speaker also discusses the difficulty of conveying this concept to traders and the challenge of writing a book that can effectively communicate the importance of this mindset.

20:04

📈 The Psychological Aspects of Trading

The speaker delves into the psychological skills necessary for successful trading, emphasizing that trading is not about physical skills but rather about how one interacts with information and maintains a positive state of mind. They discuss the importance of being in an elevated state of mind to trade successfully in the discretionary mode.

25:04

🧩 The Disconnect Between Analysis and Outcomes

The speaker explains the disconnect between analysis and the actual outcomes in trading. They argue that even with the best analysis, there is no way to predict or assure the outcome of a trade, making every trade a form of gambling. The speaker encourages traders to accept this risk and operate from a probabilistic perspective instead of trying to eliminate it.

30:06

🎲赌博元素与交易风险的接受

演讲者讨论了交易中固有的赌博元素，并强调了接受风险的重要性。他们指出，尽管分析可以提供优势，但无法消除交易的不确定性。演讲者鼓励交易者放弃消除风险的尝试，而是从概率的角度接受风险，以实现交易成功。

35:08

🎯 交易者的心理转变

演讲者强调，为了在交易中取得成功，交易者需要进行心理上的转变，接受风险并放弃对确定性的渴望。他们讨论了如何通过改变思维方式来克服恐惧，并指出大多数成功的交易者在经历了重大损失后才实现了这种转变。

40:09

📝 写作过程的挑战与自我发现

演讲者分享了他们在写作过程中遇到的挑战，包括如何将复杂的交易概念以易于理解的方式传达给读者。他们还透露了自己在写作上的个人挣扎，包括从未想过成为一名作家，却发现写作成为了他们生活的主要部分。

45:10

🤔 交易中的个人议程与自我意识

演讲者探讨了交易者在交易时可能带来的个人议程，以及这些议程如何影响交易决策。他们强调了在机械交易模式下，交易者更容易意识到自己的行为是否偏离了既定策略，而在自由裁量模式下，个人议程可能在不知不觉中影响交易结果。

Keywords

💡Trading Psychology

Trading Psychology refers to the mental and emotional factors that influence a trader's behavior in the markets. It is a key theme in the video, where the speaker emphasizes the importance of having the right mindset for successful trading. The speaker mentions how fear and trust are opposites, and how fear can create the very experience a trader is trying to avoid, such as losing money. The video discusses the need to be completely objective and carefree in order to achieve consistent results.

💡Risk Management

Risk Management is the process of identifying, analyzing, and accepting or mitigating uncertainty in investment decisions. In the context of the video, the speaker talks about the fallacy of trying to eliminate risk entirely and instead stresses the importance of accepting risk as an inherent part of trading. The speaker differentiates between mechanical and discretionary trading, noting that in the latter, risk management is crucial due to the flexibility in decision-making.

💡Probabilistic Environment

A Probabilistic Environment is a setting where outcomes are based on chance or likelihood rather than certainty. The video speaker discusses how the trading environment is probabilistic, meaning that traders cannot predict with certainty the outcome of their trades. Instead, they must adopt a mindset that aligns with probabilities and execute trades with the understanding that each trade is a part of a larger series of trades where the edge is what matters.

💡Edge

In trading, an 'Edge' refers to a statistical or informational advantage that a trader believes can lead to profitable trades over time. The speaker in the video explains that traders must have an edge to succeed and that this edge provides a higher probability of one outcome over another. However, it is emphasized that even with an edge, the outcome of each individual trade is unknown and unknowable.

💡Fear

Fear, as discussed in the video, is a common emotion that traders face and can hinder their ability to make rational trading decisions. The speaker talks about the four primary trading fears: fear of being wrong, fear of losing money, fear of missing out, and fear of leaving money on the table. These fears can lead to poor decision-making and the speaker advises that traders must transcend these fears to achieve a consistently rising equity curve.

💡State of Mind

State of Mind refers to the mental and emotional condition of an individual at a particular time. The video speaker highlights the importance of a trader's state of mind in influencing their trading decisions and outcomes. It is mentioned that a trader's attitude, whether confident or fearful, can impact their ability to read market information and execute trades effectively.

💡Mechanical Trading

Mechanical Trading is a systematic and rule-based approach to trading that removes the need for subjective decision-making. In the video, the speaker contrasts mechanical trading with discretionary trading, noting that in mechanical trading, traders follow a predefined set of criteria for entry and exit points. This approach can help mitigate the impact of emotions and personal biases on trading decisions.

💡Discretionary Trading

Discretionary Trading involves making trading decisions based on a trader's judgment, experience, and interpretation of market conditions. The speaker in the video discusses the challenges of discretionary trading, where traders have the freedom to make decisions based on their perception of the market. This freedom can be beneficial but also risky, as it can lead to errors if the trader's state of mind is not properly managed.

💡Order Flow

Order Flow in the context of trading refers to the process of executing buy and sell orders, which ultimately drives market prices. The speaker mentions the importance of understanding order flow to grasp how prices move in the market. This understanding can help traders align their expectations with the reality of the market and make more informed trading decisions.

💡Gambling Element

The 'Gambling Element' in trading refers to the inherent uncertainty and risk-taking involved in each trade, similar to gambling. The speaker in the video asserts that no matter how sophisticated a trader's analysis is, there is always an element of gambling due to the unpredictable nature of market outcomes. Accepting this element is crucial for traders to operate without fear and to manage their expectations properly.

Highlights

The speaker is writing a third book to address the needs of novice traders, recognizing a gap in his previous works.

Eight years ago, the speaker was invited to speak at a large trading conference in Texas, which led to insights about the lack of ethics in the trading industry.

The speaker attended a user group meeting in Phoenix and was surprised by the enthusiasm for a company and the lack of knowledge about trading among attendees.

The speaker's coaching experience was primarily with professional traders and those at a point of desperation, with a gap in between.

The speaker emphasizes the importance of changing one's mindset and beliefs about trading to achieve success.

The speaker discusses the difference between mechanical and discretionary trading, highlighting the mental challenges of each.

The speaker explains the concept of a 'threshold of consistency' in trading, which is a mental state rather than a methodology.

The speaker shares his realization that his previous books may have been too advanced for novice traders and his intention to simplify concepts in his new book.

The speaker talks about the difficulty of teaching trading skills, emphasizing that it requires a different mindset from actually trading.

The speaker discusses the importance of understanding order flow and its impact on price movement for successful trading.

The speaker emphasizes that trading is a probabilistic environment where outcomes are not assured and analysis cannot eliminate risk.

The speaker explains that traders must be completely objective and detached from outcomes to be successful.

The speaker discusses the psychological aspect of trading, stating that fear and trust are opposites and that traders must trust themselves.

The speaker shares anecdotes from his personal trading experiences to illustrate the concepts he teaches.

The speaker talks about the process of writing his third book, the challenges he faces, and his aspirations outside of writing.

The speaker emphasizes the importance of accepting risk and not trying to eliminate it in trading.

Transcripts

[Music]

thank you

uh hi everybody good morning now that uh

John's put the pressure on uh that this

is supposed to be held um bear with me

because I haven't done one of these in

three years as a matter of fact the last

one I did was for John in April in

Chicago in 2012. so uh it might take me

so long to get going

so hopefully it'll be done but anyway

um

I like the way I want to start out is uh

by answering a question that a lot of

you guys not a lot of the few people

I've talked to yesterday and um and a

few people I talked to last night who

are asking me that uh I'm writing a

third book and I guess I should ask you

first have a lot of you read trading in

the zone with this one Trader

and so you're probably wondering well

why am I writing a third book right

would that something become your mind

okay like why am I doing that well okay

here's the reason why I'm doing it um

about uh eight years ago I was asked to

um speak at a at a trading conference

that was going to be quite large it

would be about five or six thousand

people were expected to attend the

conference it was going to be in Texas

and uh you know a few people have been

in this business for a while

you'll know that there's a lot of a lot

of people that um

just just aren't that ethical I mean

there's there's a lot of ways that

people can be taken advantage of in this

business and there's a lot of a lot of

people that understand that a lot of

people that exploit people who want to

become Traders and so as a result they

didn't want to be associated with

somebody or an organization that fell

into that category and I asked them to

and I know they had user groups all over

the country and so I asked them if I

could uh attend some of their user group

meetings to you know to see just how

well they lived up to their uh claims of

customer service and and the kind of

products that they offer and so they had

a pretty substantial User Group in the

Phoenix area and um and I attended there

were probably a little over 100 people

made 110 20 people and uh I was just

kind of taken back one I mean by

everyone was really enthused with this

company they really loved the product

they love the customer service that

they're providing and uh but the other

thing I was taken back by was just how

absolutely totally clueless they were

and um

because I was I was used to working I

started coaching and uh and really

around 1982 or 1983. and and most of the

people that I've worked with were uh

like Floor Traders you know the Chicago

Board of Trade Chicago Market Deal

Exchange and then later on a lot of

hedge fund managers and uh you know

people who fell into the category of

what I call Professional Traders I mean

people who are die-hard Traders and so

so basically my coaching client felt

kind of fell into two brought two

categories with nobody in between and

that I had the professionals people

who'd been in the business for a long

time and they understood just based on

their experience the importance of their

state of mind and their psychology

played on their results so there wasn't

any convincing them you know that this

is the direction they needed to go and

then at the other end of the extreme was

the person who had bit of the business

for probably quite a while lost usually

a lot of money you lost their account

several times and they're at the point

of what I call Total and complete

exasperation where you might wanna you

might want to think of someone um being

on an alcoholic bender and they wake up

with their head in the gutter a little

he's literally their head in the gutter

and they look up and they say Okay God

I'm ready I'll do anything and they mean

it it's not lip service it's not

they really mean it I'll do

anything and so I didn't have anybody in

between

because they didn't realize what they

were getting into okay so basically this

group of people in the user group

they're all these in-betweeners and not

only they were just in between there's

none of them were professionals

they were like you know just really what

I call nice people but not that not that

professional Traders can't be nice

people but they're breed apart they

really are they're uh uh I'm not gonna

get into that but any case uh

very different but um so I'm thinking

you know what I I have to write a book

for these people I just you know because

the discipline Trader and trading in the

zone did not really address the issues

in a way that someone's just starting

out in the business could relate to I've

made a lot of assumptions writing those

books I've made a lot of assumptions

based on my experiences of doing these

kind of presentations and speaking at

trading conferences back in the you know

in the early 80s like the first

conference I spoke at was in 1984 and

and I spoke at you know several years

later even when you know even went on a

world tour for Dow Jones in 1987. I

literally went around the world for Dow

Jones and write Reuters out of a 36 36

City Tour I could have done all 36

cities they didn't want to be gone that

long but I did 18 out of 36 cities and

went all the way around the world so you

know it's like I have you know I have

this basic experience so oh you know you

know the way people think about trading

but yet like I said I didn't write these

books in a way that that the novice

Trader could relate to and it shocked me

it literally shocked me because the

discipline Trader was published in 1990

and trading film was published in 2000

and when the internet started getting

big and you know you got a lot you had a

lot of people doing chat rooms all that

sort of stuff and and people were

recommending you know that hey retrading

in the zone and a lot of the people that

were that were reading it were just

novice Traders because I'm getting this

feedback and emails it's like well this

book wasn't meant for you and I didn't

even really know how you were relating

to it so I thought you know what I gotta

write another book I got to write it

from the perspective and I gotta write

it from the perspective uh of someone

who really doesn't know anything about

this business the people in that room in

Phoenix were people who basically had

watched like a half an hour infomercial

on on how trading how you can take

Financial control of your life by being

a Trader okay you know secure your

retirement go into trading okay with

this particular methodology you know and

you should be able to do it well the

reality of it is a lot of these

methodologies people aren't lying to you

about the fact that if if you can

actually follow the methodology you can

you can secure your financial future the

whole idea is being able to do it

because like for example the very first

Workshop that I ever attended was in

Bermuda like I think in 1981 and um

and at the time it was being put on by

three at that time you know people who

are considered Market gurus and uh you

know and at the very first morning of

the conference I mean I'm really excited

you know what am I going to learn or I

just can't wait and and uh you know I

sit down in the room and the speaker you

know he gets going and he's going for

about 10 minutes and uh someone in the

audience raises their hand and he stood

up and his guy that got to stick his

name and and he stood up as a matter of

fact it was Dick Bernstein he's probably

he's a lot of vulture probably heard of

them anyway uh so Jake acknowledges the

guy in the audience and the guy stood up

and and he said uh and the speakers of

course we're talking to talk about their

trading systems and and how people use

them that sort of thing and uh the guy

stood up and and kind of an indignant

tone who surprised me and I think it

also surprised Jake he said Jake your

system's so goodbye you're selling it

and you know I think the whole thing

kind of took Jake by surprise like I

said and Jake's just stood there and

thought for a second he said you know

what hostiles minimum if you want to buy

because of all the 100 so people in this

room there probably doesn't want to be

that could go back and execute it

now I'm sitting here listening to this I

think you know you know he didn't he he

didn't say this in a way that I thought

he was kidding you know so you know I'm

thinking what's going on here and nobody

asked him to elaborate so it's like you

know it's like I'm just hoping this

didn't apply to me okay I'm just like

you know I don't know what he's saying I

don't know why he's saying it I just

hope it isn't me he's talking about okay

and it was of course it was you know it

was definitely me as possible as well as

everyone else in the world

so um anyway like I said I I really

felt I had to write something from

ground zero in other words if you don't

know anything about this business if you

don't know anything about the nature

Trading and especially if you don't know

anything about the nature of price

movement

that you can actually go through

understand what you need to go through

and go through a process of changing the

way that you think because this is what

this is all about everybody

you're gonna have to get used to the

idea that if you're going to do this

successfully you are probably going to

have to change some major assumptions

some major beliefs you have about that

nature market trading to do it

successfully I'm not saying you're not

going to have winning trades

I'm saying that if you want to create a

consistently Rising Equity curve and

assure yourself of an income you're

going to have to think differently than

what you think right now there's no way

around it

like for example most of you in this

room just real just quick example mostly

in this room would think that because

I'm a Trader and because I put on trades

I'm a risk taker

that makes sense because we know the

trading is risky right

come on dude I'm gonna have to get some

feedback guys okay you're good you can't

you can't sit there with Stone Face no

you really can't

seriously you can but it's going to make

things hard for me I don't want to be

hard but I want to join myself okay so

come on just give me some feedback yes

or no yeah okay thank you

[Laughter]

I haven't done this in three years so

give me a break I'm asking you next so

yeah we're Risk Takers right and yet

when you think about it everything that

you do or let's say I used to do

as a Trader with respect to analysis was

to try to eliminate the risk

who's to try to make the risk go away

was to try to make sure that the trade

I'm getting into right now this trade

was going to be a winner

that may be a winner

but going to be a winner why would I do

it why would I get into a trade-off I

didn't think it was going to win

does that make sense to everybody is

that the kind of logic that makes sense

that's exactly the kind of logic that's

going to make sure you're not going to

be successful in this business

it's exactly the kind of logic that is

going to be going to assure you that you

will not make it in this business

this business has nothing to do with

winning on a trade by trade basis on a

trade by trade basis what you're going

to learn today is that your Technical

Systems okay what they give you is an

edge everyone you heard the word

probability said a hundred times

probabilities edges edges nothing more

than than a higher probability of one

thing happening over another there's a

huge difference between understanding

that concept and actually believing it

in a way that you can execute your

trades properly

you actually have to believe in the

nature of probabilities at the very core

of your trading personality

which means you're going to have to give

up on the idea that each individual

trade is going to be successful

what your system does is give you an

edge over a series of Trades

where the outcome of each individual

trade is unknown and unknowable

not just unknown unknowable

the more you think you got to know in

this business the less successful you're

going to be this isn't a business about

knowing what's going to happen next it's

a business of getting your mind to the

point where you're completely detached

from your outcomes

very different than the way we live our

lives

I was talking to Gino last night what

did you Gino's been an attorney for how

many years 43 years what what did you

learn

when you became a Trader relationship to

the kind of strategies that you worked

that you used as a Trader every

do you hear what he said everything he

used to be a successful lawyer is

completely opposite of the strategies

and the thinking methodologies that we

have to use to be Traders

if I'm a lawyer if I detached for my

outcome

yeah you are yeah if I'm a lawyer am I

detached from My outcome oh no no no am

I if I'm a lawyer my detached for my

outcome absolutely not I'm going to make

sure that I get the outcome I want if

I'm a doctor am I detached from My

outcome if I'm an engineer am I detach

from My outcome

so if I'm saying to you to be successful

in this business you're going to have to

become detached from your outcomes just

how in the world you're going to get to

the point where you can do that

you don't know I I you're right you

probably don't

hmm

thank you

trade for somebody else that's that that

not everybody you know they're the group

following the people that can trade for

somebody else and be detached and trade

for somebody else and actually they're

even more attached than what they would

be normally I've worked with with both

ways there are people who can actually

trade their own money once they learn

the right methodology the right mindset

they can trade their own money much

easier than they can trade somebody

else's

because they're more concerned about you

know losing money for other people

so somebody was good still there's a lot

of variables in there

have a boat yeah yeah that's you know so

so basically yeah I had to write this

book from like I said from the

perspective of going from the ground up

and having two books under my belt which

I thought were really tough books to

write I mean I'm not you know they were

very very difficult for me to write and

um

uh I'm thinking you know and here this

is my own bias that I'm going into this

this whole project with like okay you

know I've got I wrote the decimal Trader

took me eight years I was trading a Zone

took me five years you know come on I

should be able to knock this out a

couple years right anybody get right to

be able to knock this out in a couple of

years yeah eight years I'm still not

done

way harder than Trading Zone way over

the top part of them trading The Zone on

the distal Trader I just I can't even

begin to tell you how difficult to spend

and how challenging it's been for me and

and how just just the impact that it's

had on my life even it's really been

very very difficult but in any case

um I found that breaking these Concepts

down to a core level where someone who

doesn't know the business can understand

it

it's not easy and I made a lot in over

the years I you know doing presentations

I've made a lot of assumptions see it's

one thing to know how to trace it can

break through a certain certain what I

call the threshold of consistency you

know like if this if over here this is

like a mental threshold okay like if

you're down here and you're booming and

busting okay your Equity is you know you

go up you go down and go up go down and

you want an equity curve it looks like

this you're gonna have to break through

what I call the threshold of consistency

and this is a mindset it has nothing to

do with your methodology I say nothing

but you're gonna have to have a good

Edge all I'm saying is that but there

are a lot of good edges out there okay

but so so this is a mindset

yeah yeah but breaking breaking breaking

these Concepts down in in that way was

just you know I I made a lot of

assumptions and breaking through my own

assumptions was was really a difficult

process you know because because yeah

what I was getting at is that that it's

one thing to to learn how to trade for

yourself and however however however way

you manage to break through this special

of consistency it's another to actually

learn how to teach people how to do it

the process of doing it and teaching

people how to do it are rules apart

there's almost no connection

there's almost no connection at all

because there are a lot of people who

teach trading because they become

successful Traders legitimately

successful Traders and they teach it

from their perspective

without realizing that Their audience is

nowhere near their mindset and and and

cannot cannot do what they do well I was

you know coaching in the early you know

the mid 80s mid 80s to early 90s you

know they're I'm not going to mention

names but there are some you know

trading gurus out there that had huge

followings and uh you know brilliant

people very successful Traders but

absolutely did not know how to teach it

did not know how to understand you know

where where the common guy was coming

from and most of most of uh you know

like like really serious suicidal

clients were as a result of listening to

these people you know the ones that

ended up you know waking up and I got to

say oh my God you know I'll do anything

just because you know how to teach it

that's all and and because the process

of learning how to teach it is just not

is completely different than the process

of learning how to do it so like I said

I made assumptions and those assumptions

uh resulted in

um

you know making it really difficult for

people reading the discipline trainer

and training in the zone to get what

they needed out of it to break through

this threshold of consistency

and I didn't really know that until you

know I got almost to the end of the book

where you know

and it's like the exercise and training

in the zone

you know when I finished that book in

like 1999 it's like I thought I thought

I explained it I really did I thought I

explained it I'm going to apologize to

now realizing that I didn't

I I really didn't explain it because in

this new book I've devoted 30 single

single space typewritten pages to just

the exercise

because what I because the big

assumption that I made was that all the

all the background all the all the

wrote to to uh as Foundation to do the

exercise that somehow people would find

a way to assimilate it and realize their

connection on their own

and then when I started actually getting

to the point where I had to write about

the exercise I realized that that just

wasn't that wasn't going to happen and

the reason the reason why I I know it

didn't happen is because I would do

presentations and um

well like for example in 2008 2009 2010

whatever and like because I did several

for John in a row like you know where I

did like I said 8 9 10 11 and 12. last

night it was in 2012. and so like in

2010 I go through the whole presentation

you know and and uh you know and

explained what I felt people needed to

get and and the exercise itself but

pretty much explained it was in the

context of trading in the zone and uh

and then the next year you know some

people would you know a lot of the same

people if there's 100 people in the room

but there's a percentage of them that

were there the year before and it's like

how many of you did the exercise no

money

not only that I was wondering you know

like okay everyone in the audience

pretty much let's say the large

percentage of people in the United

trading in the zone and right off the

bat I mean I say okay you've read

trading The Zone A lot of people said

they ran it multiple times so I'm

thinking how many did the exercise

nobody

and it's like so in so in 2011

uh we're going through this this is

mystified me now I was truly perplexed I

really was I did not get it I really

didn't get it

and uh so in 2011 somebody in the

audience just happened to say after

closing getting to the point where the

presentation is is you know is completed

there just as much time as we have and

uh someone said well how many of how

many views how many of us do you think

are going to do the exercise and I said

nobody

they're all taken back by that you know

because I was just flat out none of you

are going to do it and um and then the

next year in 2012 there were a few

people that actually did it and they got

the results that that they were looking

for

now we're going to talk about this we're

going to talk about a great way mostly

tomorrow but it's like you know I want

you you know I want you to leave

understanding the process understanding

what it is that you have to do and the

process is you're going to have to go

through

to get to the point where you can where

you can acquire the kind of

psychological skills because because all

the skills there isn't anything about

trading that's physical

what are you interacting with you're

interacting with information

there isn't anything physical other than

just you know if you've got the ability

to uh you use your mouse pad or use a

mouse you've got the eye hand

coordination to put your mouse in a

certain spot on your training platform

you got the skills down pat

your your golden on the skills

the physical skills it's mental skills

it's how we interact with information

the state of mind that we're in

people don't realize that you know that

this is this is like a a to really do

training at a really high level in what

I call the subjective or the

discretionary mode as opposed to

Mechanical trading where you've got a a

particular set of of criteria that

Define your entry and exit and it's

rigid so the market has to conform the

market has to conform to your rules or

you do nothing okay that's I'm just

gonna curse I give you a curse

explanation in the mechanical mode the

market has to conform to your entry and

exit rules or you do nothing there's

nothing to do there's nothing to think

about

you're just supposed to do you know

enter when it says put your stock where

it says put your objective where it says

and either happens or it doesn't okay

in the subjective mode basically

discretionary mode you can do whatever

you want whenever you want based on

whatever information you expose yourself

to and the way you want to combine that

information in your brain to come up

with an entry or extra signal and where

to put your stop and where to put your

profit objective

to be in that mode and do it

successfully you better be in a real

high a real like elevated State of Mind

because what you're going to find is

that it's your attitude

it's a quality of State of Mind like are

you confident are you fearful are you in

a Carefree State of Mind are you

agitated are you angry

you feel like you know you feel like

like getting revenge if you're going

through personal emotional trauma if

someone said you know if someone you

knew was trading was a full-time Trader

and they're going through a a real

traumatic experience in their life

would you advise them not to trade

makes sense right just makes sense

and yet what people don't realize is

that there are degrees of states of Mind

in other words you've got on a Continuum

at one end you've got you know got

positive You've Got Confidence okay you

got confidence and here you got fear and

there are degrees of confidence and fear

and until you become aware of where

you're at on that continuum

you have to adjust the way you trade

based on your awareness of where your

state of mind is

because your results are going to

reflect that the way you pick the what

information you pick or you choose to uh

uh to to utilize and where you where you

where your trade location your size your

stock your objective all gonna be

reflected in your state of mind

[Music]

it would be I'll give you an example you

got you got you you may have just had

the NCAA uh uh uh you know college

basketball championship right okay now

you got now you now you know if I said

that that in a professional or even a

college level that that some of these

kids or some of these guys they can hit

25 or 50 free throws in a row would

anybody dispute that

that they can practice they practice

thousands of shots and they get at the

free throw line while they're in

practice and just and hit 25 in a row 30

in a row there are people who can do

that

so so if you can do that you have got

your muscle memory in place your muscles

are chained to the foot like as if

you're like there's little these little

memory cells in each of our muscles it's

like they're completely in place so that

you know and you step all the all the

physical variables are exactly the same

no matter where you're doing it the file

line is right here the basket so many

feet away the basket's a certain height

the rim is a certain diameter that's it

all the variables are the same

now pull one of these kids who can do 25

in a row in a situation where there's

about two seconds left in the game the

national championships on the line and

with uh two shots he can win the game

with one shot he can tie

two shots he can win the game for

himself his college you know all the

fans and his team one shot he ties what

is going to be the determining Factor as

whether or not he wins that game

well we stay controlled out there you

might not have any fear and say what's

going to be just at a gentle level

what's going to be the determining

Factor but mental state of mind yeah

it's State of Mind why do you think you

know everyone knows what like for

example field goal kickers who are in a

position where they can kick a field

goal and win the game the opposing coach

call the time out they put him on Ice

okay what does putting them on ice mean

it means you know what these guys are

Pros you give them the opportunity to

get up to that t and kick the ball

without thinking their muscle memory is

going to come in to come into play and

this is going to it's going to be

automatic now give the guy the

opportunity to start rolling some

negative thoughts through his brain and

he might choke

same thing with the kid on the bow line

if he can keep his thoughts positively

focused on the process of doing what he

needs to do he'll probably make both

shots

if he starts thinking how his life's

going to go to complete and

absolute if he misses those shots

chances are he's going to miss him

if if if some thoughts start rolling

through his brains you through his brain

about coaches who have berated him

parents who would berated him throughout

his life and being in these kinds of

situations chances are he's going to

miss those shots and choke

and this will go right along here here

we had just normal confidence this is

what's called a threshold of euphoria

okay you could cross from normal

confidence into a threshold of euphoria

which is just as bad as being a state of

fear for a traitor but same way with

this kid

let's say he's standing at the foul line

and he's starting to think about what a

hero he's going to be in a couple of

seconds

and he starts celebrating in his brain

before he actually takes the shots

that extra degree of excitement just

might have enough of an impact on the

way the ball leaves his fingers for him

to miss the shots

so it can't be too much it can't be

fearful he just has to have the right

amount of confidence flowing through his

brain at the right amount and be focused

in just the right way before he actually

before the ball leaves his fingers and

he'll like the shot because the muscle

memory is there

anybody anybody have a problem with this

when we're trading in the discretionary

mode these are the things we've got to

be aware of we're interacting with

information

it's like like the it's like the analogy

would be the kid's muscle memory to

shoot the free throw would be our memory

of all the different patterns we've

learned about how to define an edge

the patterns are in our brain we can we

can we can identify them when we see

them in the market

how we utilize those patterns are going

to be a function of the state of mind

that we're in

now you don't have to get to that level

of awareness to be a successful Trader

if you stay in the mechanical mode

in other words once you learn one how to

how to identify an edge you learn how to

think in probabilities you get rid of

the what I'm going to just refer to as

the four primary training fears the fear

of being wrong the fear of losing money

the fear of missing out a little fear of

leaving money on the table when you

neutralize those four fears and you can

trade in a Carefree State of Mind

Carefree detached State of Mind

you can stay in the mechanical mode for

the your whole training career and and

don't really have to address a lot of

these State of Mind issues not that they

won't come into play

not that they will come into play

because they will if they're there they

will but at least in the mechanical mode

you know exactly what you need to do and

when you need to do it so any any

thought of deviating from that you know

there's a problem

I'm gonna go into office details I'm

just giving you an overview here okay so

don't get too don't get too perplexed go

ahead

they're being wrong uh the fear of uh

losing missing out leaving money on the

table

foreign

level of awareness to be able to be

successful but you better be at that

heightened level of awareness if you

don't want to create disastrous results

in subjective mode most people are

trading outside their skill level

meaning they should be trading

mechanically and they're trading

subjectively they're trading especially

into discretionary mode and they have

nowhere near the skills to be able to do

it

because in that mode you can do whatever

you want see in the mechanical mode I

would say you wouldn't even to think

about pulling a stop even to think about

moving a stop as a trading error

in the subjective discretionary mode you

want to stop moving you want to pull

stop pull it because the assumption is

you you don't you're not doing it from a

state of fear

you're not doing it because of you know

what what you're afraid of the results

are you're doing it because that's what

you that's what the Market's telling you

to do in this moment based on your

ability to read the market from an

objective perspective

because every mistake just about every

mistake that you can make as a Trader

will be the result of

I'm afraid of being wrong I'm afraid of

losing money I'm afraid of missing out

I'm afraid of leaving money on the table

you're going to get into soon

you're going to get in too late

you're not going to Define your risk

because you're thinking hey why'd you

find the risk I know we can get in this

trade and I think it's gonna be a winner

so there is no risk

yeah okay yeah

or or you say you know you read all the

books and you go to the conference and

say hey don't do this without free

without determining what your risk is

before you get into a trade and so you

think okay well I've gotta you know well

everyone says I got to do it so I'll do

it so basically it's lip service lip

service in the sense okay you'll put a

stop in the market and that's where

usually people use percentage stops as

opposed to scroll what I call structure

stops structure stops are where you're

actually reading the market in a way

where you know where's the best place on

the structure perspective that tells you

this trade isn't working or the

likelihood of it working is so

diminished in relationship to the profit

objective it's not worth staying in

anymore did you guys get what I just

said okay that's a structure stop when

you pick an arbitrary percentage stop

like one or two percent that's people

that do that usually do it that's risk

that's a lift service risk management

they don't really don't believe they're

going to get stopped out but they're

they're you know they've been told over

and over again you gotta you got to do

something like that and so they put

their percentage stop in the market and

thinking well it's never going to get

hit anyway

and of course when it starts to you know

it starts to look like it's going to get

hit they'll either pull it and you know

put somewhere else or if they're coming

out of a state of basically paying

really lost three or four trades in a

row you know if it starts even getting

close they'll pull up thinking you know

I want to save myself some money

nobody in this room's done that but oh

okay yeah yeah today yeah right

it could be anything yes instructor

stock could be because the question is

is a structure stop like a two bar stop

the instructor stop is based on on your

definition of an edge we have edges for

getting in we have that just for getting

out whether it's it where the edge is

defined as a profit objective or a place

where where the Market's telling us that

the likelihood of this trade not working

is so great it's not worth spending any

more money on or not or not worth uh the

likelihood of even hitting the profit

objective is so diminished that it's not

worth spending any more money on

go ahead

no not this business zero fear

absolutely zero fear

absolutely zero I want to be emphatic

about that I don't no there is no no

absolutely zero fear you have got to try

this good question thank you very much

you don't got to trust yourself because

what you're going to find when I get

into this example is that that fear acts

on a perception of information in a way

that we actually create the very

experience we're trying to avoid

okay I'm gonna I'm gonna explain that

how that works but fear will act on our

perception of information how we

perceive it the way we feel through the

information and how we behave in a way

where we will actually create the very

experience we're trying to avoid so if

I'm trying to avoid being wrong that's

exactly what I'm going to end up doing

I'm going to I'm going to act and see

things in a way that create a situation

where I end up being wrong if I'm afraid

of losing money that's exactly what I'm

going to create for myself zero fear not

only that you have to it because fear

and Trust are are uh opposite of each

other you've got to be able to trust

yourself you have to be able to

completely and absolutely trust yourself

that you can do act in your own best

interests and do the right thing without

experiencing pain first

foreign how can you be successful in

this business if you have to experience

pain to get out of a losing trade

that if it takes that much in other

words the market has to go so far

against us that we can't stand it

anymore that we eventually get out

go ahead

no no anxiety no fear no completely

Carefree state of mind you're gonna have

to get to the point where you're going

to completely objective Carefree State

of Mind you cannot care about the

outcome remember I started it wasn't

even that long ago detached from the

outcome

you got to get your expectations in line

with the reality of the environment

you're operating in you are operating in

a probabilistic environment

that really means not lip service that

really means probabilistic maybe maybe

maybe I'm going to get the outcome that

might that my Edge says oh my Edge is

predicting will happen maybe I'm going

to prove this to you

he said one of the reasons why I've

built this third book is because because

I came to the realization that that my

personal experiences as a Trader

starting out I started trading in 1978.

so my personal experience as a Trader

and then going to work for Merrill Lynch

at the Chicago Board of Trade as a

retail broker you know it's like it's

like I ended up learning things about

how the market works that ordinarily

without being on the inside of the

industry people just wouldn't get so I

also took that for granted and what

people don't get is how is when they

don't understand order flow when they

don't really understand the nature of

overflow and how prices move from an

order flow perspective it's very hard to

learn how to think how to it's very hard

it'd be very hard to let's say

extrapolate what you know watching

prices move on a screen in a way where

you could think you know well I need to

think like this I need to think like

this

Tony don't when you don't understand

order flow that that really screws you

up because when you really do everything

that I'm saying will become self-evident

when you understand order flow all the

things that I'm saying will just like

yeah okay yeah that makes sense

so if I say to you that if you operate

you've got to get your expectations in

line with the reality of the environment

that you're operating in that means you

don't know what your outcomes are going

to be

there's no way you can know what your

outcomes are going to be I'm also going

to say that you don't also know why

you're winning or losing when you

understand order flow you will know that

there is no way that you can know why

you're winning or losing or even find

out

think about that one for a second

you don't know why you're winning or

losing and there's no way to find out

do you understand how prices move to the

extent where you can you can think

yourself yeah okay that makes sense to

me

I'll explain it to you it doesn't make

sense now

and the implications of what I just said

is that every prediction your

methodology makes and in essence is a

guess

and if it's a guess the implications are

guess what you're gambling

what's that

if you're guessing you're gambling

that is the reality of our situation we

have no assured outcomes and we cannot

make a connection between the reasons

why we put on a trade and the reasons

why the market went into our winning our

favor or went against us if we can't

make that connection then we don't know

why we're winning or losing and it isn't

any different and sitting down on the

Black Death table or playing a slot

machine because there's no way to know

we are gambling regardless of the fact

that you're using analysis regardless of

how good your analysis is I don't care

how sophisticated it is there is no

analysis that can take the gambling

element out of trading this debate there

is no analysis that can take the

gambling element out of trading there

was no analysis that can eliminate the

risk there's no analysis that can say

assure us that this trade is going to be

a winner

when you understand overflow you will

agree with what I'm saying

and then you'll start thinking about

this whole thing differently so instead

of trying to avoid the risk instead of

trying to use your analysis to avoid the

unavoidable

to do the impossible you will accept the

risk

and understand it from a probabilistic

perspective

and then Everything Will Change

Everything Will Change you'll even see a

different Market you'll see the same

bars but you'll be interpreting it in a

way where it's like oh yeah okay that

makes sense yeah

it's like one more one second it's like

it's like we're here in Las Vegas

how did Christina you heard John say or

somebody maybe yesterday or I think

somebody said you know uh about even

trading his own it's like you know like

be the casino well here's what this

means

like with casinos know that they have

the law of probabilities working in

their favor the law of probability is

like magic

see the casinos really aren't gambling

because they are gambling in one sense

and gambling from one perspective but

not in another on an event by event

basis you know this Blackjack hand this

Blackjack hand this black every

individual hand that's dealt they don't

know the outcome to and in essence

they're gambling on the outcome of each

individual hand

but since they have the law of

probabilities working in their favor

what that means is that over a large

series of events they will always come

out net winners

so in essence they're not gambling

we can do the same thing as Traders

exact same thing

we have an edge

our Edge gives us a higher probability

of one thing happening over another over

a series of Trades

but each individual trade the outcome is

not known nor nullable

all I have to do is execute that edge

flawlessly every time and I will come

out in that winner and in essence over a

series of Trades I'm not gambling

on each individual trade I am

are you guys with me on this I'll

explain in more detail later on

there is nothing you can do to take away

the risk burn that in your brain there's

nothing you can do to take away the risk

any effort that you put towards taking

away the risk is going to assure you are

failing

to another degree you're going to try to

take away the risk of being wrong the

risk of losing money the risk of being

leaving money on the table or risk of

missing out all these four fears will

detract from your ability to create a

consistently Rising Equity curve and

cause you to make mistakes

okay who had a question back again

well I don't know how you define a good

poker players I have to know how you

define a phone I don't know how you

define a good poker player so if you

heard me to answer that question yeah

what's that well yeah see winning

winning one night or you know and

getting on getting on a winning streak

is different than someone who can

someone who can gamble and make

consistent income you know people people

who can make consistent income gambling

you know work basically about the same

kind of mindset and they also there's a

lot of other a lot of other variables

involved It's like because like people

who are you know are immersed in

gambling I mean you know there's a lot

of Dynamics in play that are you know

not so much different from psychological

perspective but for example if if and I

don't gamble I mean I don't I don't you

know I don't play black deck anymore or

anything else like that but anyway

um if it's like if I were what I would

do the first thing I would do is I'd

walk through a casino and I try to find

I try to find a dealer who's having a

bad night in other words a dealer who's

busting on a consistent basis you know

or if I was playing craps I would I

would peruse the tables until I found

somebody who's hot with the dice because

I do believe in streaks I believe in

winning and losing streaks and if you

can you know and if I'm playing my cards

right you know if I've got a basic

strategy and how I'm going to play my

cards or or how I'm going to bet at

craps uh what I'm going to want to do is

I'm going to want to you know find

somebody who's already on a streak or

looks like they're gonna be out of

streak

in what way

if we hold on we could if we could put

the coin a thousand times in a row okay

we would come up with a pattern a

discernible pattern where there would be

very little difference between heads and

tales if the coin is evenly weighted

right this is the pattern that would

that would come up over and over and

over again you could actually bet on it

you could actually bet on the fact that

I flipped the coin enough times like a

thousand a thousand flips that that the

uh that the relationship between heads

and tails would be within a percent

right let's see but within that thousand

foot sequence can you have winning you

can have heads could test them up 10

times in a row

yeah okay

I didn't say it was predictive well I

would say what I'm saying is I'm just

looking for people I'm looking for

situations where it's likely that this

is what if someone's on a winning streak

not a winning streak I don't know how

long it's going to last or why I don't

care I'm just looking for I'm looking

for engines that's all I'm saying look

so the answer is question about gambling

it's not a good correlation because

there's too many other factors involved

so

but otherwise I'm just looking for that

kind of edge

go ahead

yeah I will you know now that the whole

rest of the time is going to be pretty

much elaborating on it

when I say become you see you you say be

comfortable I say that that you accept

the risk at such a core level of your

trading personality of your trading

belief system that there is no other

part of your mental environment that

would argue for anything different in

other words what what I mean is that

when you've accepted that that I could

put this trade on I do not know what the

outcome is going to be I don't care what

the outcome is going to be because I've

adopted I've adopted a series of Trades

perspective meaning that that I don't

know what I want to basically what am I

expecting I'm expecting wins and losses

over a series of Trades and I don't know

the sequence of wins and losses but I do

know that my Edge in the past has

produced let's say a 60 win loss ratio

or a 70 win loss ratio again I don't

know what the sequence the wins and

losses are and I don't care I just need

to execute properly and when I get to

the point where I really have accepted

these principles accepted them at the

very core of my being I will be able to

do this without fear I'm going to show

you how to do it tomorrow but what I'm

saying is that this is where we're

getting to we're getting to the point

where if you're going to do this right

you gotta you gotta transcend your fears

and to transcend your fears you're gonna

have to learn how to think differently

it's that simple if you're not willing

to learn how to think differently you

might as well walk out of the room now

it's not going to happen for you it

really isn't go ahead if there's enough

there's enough back case of of of people

who've been in this business for years

who have lost one or more fortunes well

they have lost one or more fortunes

until they get to the point where they

come to the realization that you know

what my strength My Life Strategies

don't work in this business

why do you think there's a there's this

theme and all you know all you know

really good Traders this theme that that

most of them had lost one or more

fortunes before they finally broke

through the threshold of being able to

create consistent results because that's

what it took it took losing all that

money to break down the resistance of

their their dysfunctional beliefs about

the nature of this business or their

erroneous assumptions about what this is

about and most those harmonious

assumptions have to do with analysis

which is which is normal because when

you think about the way we Define

analysis in our normal everyday life if

I step into and engage in an analytical

process

and and I and I really believe that that

process has validity

then when I come to a conclusion I

should think that I'm going to get the

outcome I expect

wrong in trading that's not the case

you don't open up a trading account at a

brokerage firm and they tell you that

you know what whatever you think the way

you define analysis doesn't work here

does not work

you're only using analysis to get an

edge and an edge is a higher probability

one thing happening over another and if

there's no way to assure myself that

this trade I'm going to get into is a

winner I'm guessing and if I'm guessing

I'm gambling they tell you that anybody

ever tell you that

John's a good guy

okay I'm sorry

[Music]

no you're not no no yes because no

you're never eliminating the risk you're

accepting it you're never eliminating it

there's nothing just you have to get to

the point where you're just like I said

there's no question in your mind that

the risk always exists now there's when

you say eliminating risk like my scale I

got a pro yeah but see there's a

difference between between what you say

is reducing risk on money management

perspective and actually accepting the

risk when you reduce risk on money

management perspectives because the

Market's telling you we the one that's

that's your strategy okay and two of the

markets saying this is a good place to

take some profits that has nothing to do

I mean you can say the vernacular is you

can say yes I'm reducing risk but that's

not what I'm talking about I'm talking

about from a psychological perspective

actually accepting the risk okay

so that that yeah yeah there's a

difference but these are subtle

differences and this is the kind of

thing that gets us in trouble see what

we don't understand these subtleties we

give them a lot of trouble go ahead

do I what

no I actually I really don't just resist

so uh I I have been trading a long time

you know I as a matter of fact I turned

my training but I use trade station I

turn my trading platform off really just

about three years ago right around this

time thinking that you know what I don't

want to be distracted with the market

I'm going to be done in three months

yeah I'm still like that and I haven't

turned it back on so uh I don't even

watch markets right now anyway

yeah as a matter of just to tell you

what just maybe maybe I shouldn't say I

don't I'm not saying anyone uh

I'll give you an example of what I'm

talking about where I'm at right now in

the book is is is uh the last chapter

and I'm actually writing about

subjective discretionary trading

um it's taking taking me like 26 27 days

just to get the first three paragraphs

are you what's the name I know you're

gonna ask I've got about 20 names when

I'm done I'll pick one okay when the

name comes I write it down and if I can

find the file because I didn't follow

the name in a long time I'm gonna have

to explain the class who's like

thousands of files but anyway uh yeah

it's like and when I say I worked it's

not like I have been writing I've got

pages and pages and Pages it's just that

it's just that the words have to be come

together in just the right way for

people to really get it and it's like

and it's not until it resonates you know

it resonates with me that yeah okay the

I've got the suitcase sequence of the

words just right and like I said the 25

26 days just to get just to get three

paragraphs

and if you asked me a month ago I'd have

said hey I I'm almost done with it I'll

be done in a few days

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it will really scares me is the next

part is intuitive now I've already got a

lot of stuff on intuitive written so all

I gotta do is find it but then again one

no seriously I'm not kidding because I

written it years ago so you know it's

not you know I'm gonna have to find what

I've read I'll find it I mean it's not

like it's lost but you know I don't want

to get into it anyway so where are we

yeah right no exactly and so you know

yeah it's my own problems with the whole

writing process of you know creates all

the difficulty to get right down to it I

never you know because I never I didn't

go up to be asked

with aspiration of being a writer do you

really or an author or have any idea

what that was like or here I'm almost

finished my third book spent most of my

adult life writing books and I'm like ah

you know I was like

I just wanted to be a professional

hockey player I said I'm not kidding you

know I'm really not because I grew up in

the in the 60s or in the 50s you know

and uh you know because I'm 66 years old

so it's like I grew up in the 50s and

back then there were only six NHL teams

and there and everyone there weren't any

American players any American hockey

players in the NHL there wasn't that one

American hockey player in the NHL so my

chance of becoming a personal hockey

player was Zero but while all I'm saying

is that my aspirations would be were to

be a parental hockey player that's what

the end to be a writer and it's like

come on I used to I did this honestly

got true when uh the term I went to

Michigan State and the tournament start

and I go into a class and the professor

said uh we're gonna have a term paper

I'm out go my advisor throughout the

class writing forget it I just I you

know I avoided writing at all costs now

I know why my life purpose was to be a

devoted as a writer and I was just

avoiding what I was going to end up

doing I didn't know why started back you

know when I started when I'm in my late

teens and early 20s I'm gonna end up

spending my whole life doing it you know

but anyway go ahead

you know what there's these are all

personal individual variables and it

could be it could be any anything I mean

just even is John here John okay we were

talking last night you know in the

cocktail thing and uh and John brought

up that um he made a connection you want

the connection about uh being a hero

um

yeah when you're on the other side of

that yeah when you're on the other side

of it yeah

and then

the logical explanation in my mind was

wasability

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real estate

and they're like all right so obviously

the market company so now you know from

10 to 100 and now I was working in the

book school okay so now who's open 100

in a million and in my mind it was

really it was like a big pick and I'm

like that's fine the freedom that's I

can quit my job

right and so we go along your first time

will be worse

skin this is like in 1995 Magnus is down

here in uh in the markets there and then

at one point the premium dropped

and from the end of the day and if

you've got like 100.

I love myself

all right honestly

okay

okay

so this product is going to work when we

come back down with a half a gap built

which is

foreign

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I don't know

wow

worse than I thought

well you know what I want you to get to

though okay okay yeah

is that there was something

naturally below it to be able to

Survivor and somehow I was

questions

every day

house

but what if I realized

so that's you know that goes into it you

know it's kind of hard to be like you

know it's most things

you know you know yes that's what

happened but I'm like what's up everyone

it's not happening yeah I think that's

exactly what I wanted I wanted he was he

was applying his own agenda in other

words he had another agenda other than

just being a successful Trader

so that's why I couldn't answer your

question about you know well what's

happening with with people because

because there's all kinds of agendas

that we have

and when we trade in mechanical mode

it's it's at least a lot easier to be

successful until because we know exactly

what we need to do when do we need to do

it any deviation we're making a trading

error in the discretionary mode there's

no such thing as a trading error did you

do anything you want but then what you

have is you have all these personal

agendas that can really start to assert

themselves

you can have personal agendas asserting

themselves when you're in mechanical

mode but again at least you know

something is going on because I'm not

executing properly I want to make it I'm

doing I'm about ready to do something

that that is defined explicitly as an

error

and so at least if you've got enough

presence of mind to say you know what

I'm going to step through that that

compulsive behavior and do what I need

to do anyway

you'll be all right

but when you're in the discretionary

mode these agendas kind of certain

themselves in a way that unless you have

a really high level of awareness you

don't even know what's going on

making sense

okay that was the case that was the like

the introduction

as a matter of fact you know what before

I get going again why don't we take a

five minute break of breath and break is

that all right