Chapter 7 Entry: W - "In my workshops, I always ask participants to resolve the following primary trading paradox: In what way does a trader have to learn how to be rigid and flexible at the same time? The answer is: We have to be rigid in our rules and flexible in our expectations. We need to be rigid in our rules so that we gain a sense of self-trust that can, and will always, protect us in an environment that has few, if any, boundaries. We need to be flexible in our expectations so we can perceive, with the greatest degree of clarity and objectivity, what the market is communicating to us from its perspective. At this point, it probably goes without saying that the typical trader does just the opposite: He is flexible in his rules and rigid in his expectations. Interestingly enough, the more rigid the expectation, the more he has to either bend, violate, or break his rules in order to accommodate his unwillingness to give up what he wants in favor of what the market is offering." -Mark Douglas A - Mark is telling us that we need trading rules to protect us from an environment that has very few rules, but when we break our rules and lose it's because we didn't fully trust our plan and believed that we knew what was going to happen next in the market. We need to stick to our rules and firmly accept through our actions that "anything can happen" in the market. A - On September 1, 2022, I entered two trades on $AMD short when the price action took a downward trend, broke the pre-market low, broke all the moving averages, broke the LRC channel and strong reversal patterns appeared on multiple time frames. I entered my stop above the pre-market low at 81.54 and entered at 79.86. I exited the trade because I saw the price action break the previous 5-minute high and got out it even though my stop was never broken. I reentered again, but with a diminished risk to reward and removed my position when I saw the price action break the 20EMA on the 1-minute chart. And again, my 2nd stop was never broken. The price eventually hit 78.52 before reversing. I thought a lot about that trade and realized that I had not completely accepted the risk of what I was willing to spend funds on to find out if my trade would work or not without hesitation or regret. The truth of the matter is I thought I knew the price would reverse against me without allowing the trade to work. I was wrong. If had fully accepted the risk and the stop loss I had set, I would have been taking profits and not a loss. Nothing is ever wasted in life, so I paid the price to receive valuable insight into my trading. 🙏

Chapter 7 W: “Thinking in probabilities can be difficult to master, because our minds don’t naturally process information in this manner. Quite the contrary, our minds cause us to perceive what we know, and what we know is part of our past, whereas, in the market, every moment is new and unique, even though there may be similarities to something that occurred in the past”. A: Each trade is unique and different. It has nothing to do with previous trades; and even if they have similar patterns, they are not correlated to any other trade we have taken in the past. We should look at the market with open mind and each trade as a new experience. We should avoid trying to predict the outcomes based on false assumptions (perceptions) or unrelated past experiences.