Book Club - The Disciplined Trader

[Dan F 73]

 

Chapter 7 In the Market Environment, reasons are irrelevant

W-Not everyone will think the same about their trade while trading. With every trade even the fundamental thought processes is not the same before, during and after the trade for a single person.

A- If the intent of everyone that is trading is to make money, why get into a trade that you think is going to fail (Mark said something along those lines)

A- I’m hoping to reflect on this in the next week so that I remind myself to think positive from beginning to end of the trade.

[Marco 22]

Chapter 7 In the Market Environment, reasons are irrelevant

W - When you put on the trade, you had to have some belief about the future. What you need to do is learn how to release yourself from the demand your expections be fullfilled exactly the way you expect them to be.

A - He told us don't become fear or greed after the trade. If so you cannot percive the market how it really is. But you have to take your exits and partials based on unaffected choices.

A - I will try to see every trade not as a single trade but as a piece of a big picture. So one loss should not affect me anymore.

[Norma 33]

Chapter 7 – In the Market Environment, Reasons are Irrelevant

W: “If you want to learn to predict price movement, you don’t need to pay attention to reasons. What you need to do is determine how the majority of traders perceive the external conditions in relationship to either their fear of scarcity, or their fear of missing out, or both”.

A: Mark is telling traders have a different perception of the market and its value. That perception is drive by fear or greed. The reasons why we trade are irrelevant.

A: Working in focusing what the chart is telling me about the price and how other traders perceive value. Not to anticipate any movement but to understand the move.

[Susan 111]

Chapter 8 - The Three Stages to Becoming a Successful Trader

W- The market does not create the ways in which you perceive it; it merely reflects what is going on inside you in any given moment. 

You can’t change what the market is doing. You can only change yourself in a way that allows you to perceive what it may do next with increased clarity & objectivity. 

To be effective, you will need to learn how to make kinds of distinctions that will provide you with an indication of a high-probability opportunity from an objective perspective, what I call making an uncommitted assessment of the probabilities. 
 

A - I think Mark is reminding us that what is happening inside of us is our “perception” of what the market is doing until we fully learn to see the market objectively/unemotionally.

A- whatever we feel as price moves is in correlation to our bias and what we wanted/thought he market would do next. For example; if we feel tense/fear it could be because things are moving in a way we didn’t think they’d go… we may feel excited because our trade is going above our target and we internalize that as we are making more money - yaaa hoot!!! We have to start looking at it as data - more boring and unemotional. Strive for objectivity, trust our system will work in the law of probabilities. 1 big winner or small loser is just that - it’s just 1. We need to be more focused on the “game” the process on a larger scale so we can see with more objectivity and less emotion from moment to moment. 

[Norma 33]

Chapter 8 – The Three Stages to Becoming a Successful Trader

Executing your trades

W: “The effects of fear on one’s behavior are obvious, limiting one to the point of complete immobility. If you can’t execute your trades properly, even when you perceive the most perfect opportunity, it is because you have not released yourself from the pain contained in the memories of past trading experiences and because you still don’t trust yourself to act appropriately in any given set of conditions. If you did, there would be no fear or immobility”.

A: Mark reminds us fear is one of the biggest mental obstacles we face during each trade and prevents us from executing as planned. At the same time, he reminds the result of past trades have not relevance on the present or future trades.

A: Fear is a constant emotional state of mind we need to overcome as traders. Hesitation to execute trades is the result of our fears. We need to be aware of our fears, fight them and conquer them at the execution of each trade. We need to make a conscious effort to execute  each trade as planned no matter what. I'm better a my executions, but there is more work to do.  

[Dan F 73]

Chapter 8 The Nature of the Trading Environment

W- One of the biggest variables in trading is that how our minds work similar but never the same. It seems when the mind is doing something that it has not done before, it’s looking for stable ground. It doesn’t matter sometimes what it takes to get to stable ground even if it’s bad or good.

A-Mark reminds us the mind is looking for self-validation while trading.

A-The way that I find myself being able to identify what self-validation looks like while trading is write down in the moment in a word or two why I got into the trade. Hopefully seeing what I wrote each day will give me an idea of what’s going wrong with some of my trades.

[Susan 111]

Chapter 9 - Understanding the Nature of the Mental Environment

W - We can create mental imagery of any size or proportion, with none of the dimensional limitations that exist in the physical environment because the images, as an energy form, have no physical substance and thus exist in a state of form without dimension, taking up "no space".

The Mental environment exists outside of time as we know it...

No limits or boundaries as to how much information can be stored. 

W - Mark is explaining in this chapter how our mind can be thought of like our body with many different, individual thoughts.  We cannot see/feel them like body parts, but we know they are there.  The mind is not confined like the body by space/time/boundaries.  We can always learn more.  He goes into discuss how we remember better things that have the most impact on our senses.

W - I believe we are LIMITLESS as far as our mind goes...there is a lot of garbage we have to sift through all the time even coming maybe inadvertently from friends & loved ones, but if we can tune our minds properly into the right channel we can become whatever we want (IMO).  I believe our memories yes are tied to senses, but that the things most remember best are the things that elicit a strong emotional response - like you remember your best XYZ & your worst XYZ...

[Dan F 73]

W- N/A for me this time around

A- The first point Mark made was that the mind can travel in the 4th dimension to places that it would take an infinite amount longer to travel. The second point that he brings up is that the mind can also travel into the past.
 

A- What I got out of all this is that your mind has less boundaries to hold you back. This difference between body and mind is why you should think ahead instead of out clicking the stock move.

 

[Susan 111]

Trades to share with everyone... Working Through "Fear of Losing" which for me equates to the behavior of : Not Holding my Trades.

Trade 2:

Proud of this one because I did not exit when pulled against me; in fact I added into ORB.  Got self together and then took short at S3.

Trade 1:

Not as proud of this one because you can see when my emotions get the better of me and I exit my trades to then become annoyed and get back in.... happy I started to work through this last month...will continue to work through and increase tape reading skills; I really feel this is going to give me a lot more confidence.

Edited January 30, 2023 by Susan

[Miguel Angel 65]

Best trades of January 2023:

Trade1: Tradervue | TSLA Trade Detail

Trade4: Tradervue | NVDA Trade Detail

Trade5: Tradervue | NVDA Trade Detail

 

Worst trades of January 2023:

Trade1: Tradervue | META Trade Detail

Trade2: Tradervue | NVDA Trade Detail

[Susan 111]

Chapter 10 - How Memories, Associations & Beliefs Manage Environmental Info

As a side note - if you are finding some of these chapters tougher to read; hang in there.  He is giving a lot of context on how things work in our head.  I read through some of chapter 13 and did a few exercises yesterday on the Techniques to Effect Change.  It was good....a bit exhausting to my mind like a deep gym work out would be to my body, but that is what I want & need.  I am going to go through all those notes today and have a plan to start implementing the tools and things I discovered on Monday.  I look forward to discussing what you learned this week and digging in deeper in the next few weeks:).  Be proud of yourself for doing this work!

W - (I have a few things that jumped out so I am writing a few W's we can review together & talk through)

* Perception - What we learn creates an energy loop between the inner & outer environment.  We can call this energy loop perception.  Learning how to read the market is an example of the energy loop between the inside & outside = perception.  Once we learn something, mental energy will then act as a force on our senses to recognize in the environment what we have learned about.  The event is different for each individual b/c we all experienced it differently.  

A - Mark is explaining how perception exists in our lives and in trading.

A - I have always found it interesting how people perceive the same event quite differently (in life & in the market).  We see this everyday.  To one trader; they feel it was a tough day in the market and to another the market was on fire.  lol.  We all participated in the same market and sometimes traded the same stock so why such a variance?  It comes down to how we perceived the market & how we traded it....it could be our set ups or simply our execution.  To me execution is all about psychology.  We have the strategy and yes sometimes it will fail as is the reality of playing a game of probability.  How often is it the strategy failing vs our execution failing?  This is the key and something we should all be analyzing.... while we are not in control of the market; there is so much in our control that can enhance our trading.  

W - Beliefs - If we believe that things exist in only 1 particular way, then our beliefs will act as a natural mechanism to block the acceptance of any conflicting information.  Beliefs allow us to tune into 1 channel of the environmental info at a time.  

A - Mark explaining how our beliefs effect what we can "tune into" - "perceive."

A - I see this all the time in the world; people believe something and therefore cannot "see" anything else.  It is limiting for most people.  If you have ever scrolled through twitter the political posts really get to me.  People attack each other b/c they believe all republicans/democrats are XYZ; they cannot fathom the thought that there are so many people in the middle on both sides and only seem to focus on the extremes.  Without getting too much into politics; if you believe that all Dems/Reps or any other group of people are good/bad/smart/stupid/etc - you may only be able to see & perceive them from this point of view (which in my opinion is small & limiting).  It is not always our fault either.  If someone who looked a certain way hurt you or someone that identified with a certain group; you may have inadvertently formed this belief.  As an example; my last boss was military and he was a real piece of work.  As I transitioned into BBT; I was a little afraid of Mike/John.  I came to realize this was silly as they are both wonderful men to know & work with, but I let this last person cloud my mind and I formed this belief that "all military are XYZ".  I am glad I realized the error of my way and was able to learn from and form a nice relationship with 2 of my mentors.  I notice anytime I see a middle aged woman that is tall and blonde; I immediately feel warmth.  My mom has passed and she was tall with short blonde hair.  I like  being reminded of her so I do not mind this feeling, but it is important to be aware when these things are happening to us and to judge people/stocks/situations in the moment and not on some past belief or preconceived notion:)....Take note of anytime your mind is telling you "ALL or ALWAYS" - question that thought...rarely is anything or any group "ALL or ALWAYS XYZ".

W - Fear - I am not going to write notes out, but can go through this in book club if no one else writes their thoughts on Fear related to this chapter.  

Have a wonderful week and talk Thursday!

[DenHei1 13]

W- "Fear (high degree of negatively charged energy) has a profoundly limiting effect on the range of information that we pay attention to."  

A - Mark is talking about how fear can actively blind and artificially focus - to the point of delusion - our attention.  He also goes on to talk about how fear can focus our attention on what we fear (we feel we must act) - or create blind spots because we are avoiding what we fear (we withdraw into inaction).  

A - This is very interesting.  The two faces of fear - the focused fear of losing/being wrong that compels action "get out of the trade."  Vs the blind spot fear of being wrong that locks me into a losing trade because all I'm seeing is the candles that confirm my relief.   

I am working on trading "peacefully" - by talking myself through and acknowledging the difference between what the market is actually doing vs my fear/projections/interpretation/internal experience.  The benign up and down of colored candles on a screen - that inform my process VS the emotional roller coaster of "Phew, I'm right... / Shit, I'm wrong...." 

It's a work in progress - and I'm making inroads towards recognizing the difference.  The next steps are to take myself out of my internal experience and into just seeing the market.   I am getting better at knowing when I'm feeling intense and then being able to come out of that so that I can see what is happening.   My primary goal is to trade peacefully - with optimism and self-trust.  

I agree with Susan's assessment of seeing how people (including myself) can talk themselves into versions of "reality" that are not real because they are triggered into the fight/flight mode.  (arguably this perfectly describes life since 2019 - LOL, not LOL).   I would suggest that everyone should learn to trade and have to trade live for a certain period of time - to learn this about themselves.  In life, you can really get away with living your illusions and never recognize reality and that it's not the world - but you who are creating that reality.  Trading is immediate and happens multiple times a day - so the learning curve is intense and rapid - it's a bit like therapy on steroids.  In life there isn't that immediate and direct feedback.   But then again - I'm jumping ahead in the book.  

[Dan F 73]

Chapter 10

W- There are many things that happens in our mind that we can’t totally grasp because it’s in our subconscious. One of the emotions that traders deal with in some part of their trading journey is fear.

A- Mark talks about how fear and association mixes together. By clicking buttons we can create the fear that we are trying to run away from even though there is not any straight reason to be afraid.

A- To apply this, I have to break the obvious cycle of the feeling of fear associated with clicking buttons.  My idea might not be a sound one but I’m going to think of something that makes me happy when I press the button to trade.

 

[Norma 33]

Chapter 10

W: “Traders who are motivated to act out of fear generally aren’t aware that their fear drastically reduces the choices they perceive as available, making their behavior very predictable to an objective observer (someone not caught in the same cycles of fear)”.

A: Mark tells us our fear narrows our view and perception. We see only what fear allows us to see.

A: Fear is one of the biggest obstacles to overcome. More often than not, fear drives our decision during trading, and we are not aware of. Constant work and awareness.

[Dan F 73]

Chapter 11 Why We Need to Learn How to Adapt

W- What motivates us to want to actually trade has many various elements to it.  Sometimes when you define what motivates you, you can find additional inspiration.

A- Mark said that the more you know more about the driving force for your action the easier it is to fulfill your needs and goals.

A- I plan on applying this over all thought to my last week “how I’m going to apply”. I plan on adding this to my thought processes from last week’s apply segment, elaborating just not thinking of one happy word like family, instead thinking of words like family parties.