Book Club - The Disciplined Trader

[Susan 111]

Chapter 14 - Techniques for Effecting Change

****** Discuss the exercises - did anyone take and what did you learn?

W - Change comes from what we are willing to think...

A - Mark discusses that if we want to direct our conscious thought process toward a specific intent; this is what effects change.

A - We Become what we think about....I think this is very true.  If we think about good or bad things, same with what we watch/listen to; what we allow in our mind and thinking about it over & over again (whether good things we want or bad things we do not want) only reinforces the POWER that thought now has to take root in our mind.  Our thoughts turn into our words; words turn into actions, and actions become our life.... Think good thoughts.  Be willing to monitor your thoughts in trading & in life.... It starts with self-awareness and honesty:)

 

[Susan 111]

IMPORTANT INFO ON NEXT MEETING:

WE ARE OFF THIS WEEK FOR SPRING BREAK (LOL)

WE RESUME CHAPTER 14 ON 3/30 AT 1PM...... I HAVE A PCT MEETING SO I HAD TO MOVE THIS TO 1PM.  SORRY AND HOPE EVERYONE CAN ATTEND!!!  

[Dan F 73]

Chapter 14

W- Some issues in trading are cyclical especially when the root cause isn’t addressed. Affirmations can help traders move on in their trading career beyond the barriers that come from recurring issues.

A- The affirmation from Mark that stuck out was “I believe I am free to change the way I feel about any past experience”

A- I’m finding being a trader does not have a linear path. Sometimes you need to experience a problem with the right mindset to move on in your trading career. Applying this affirmation hasn’t help directly with trading but has helped me when I applied it to my daily life. This I feel has helped with maintaining my stress.

[Miguel Angel 65]

Chapter 13 - Managing Mental Energy (catch up)

W - “All our lives would become a lot easier to live and potentially more satisfying if we operated out of the belief that we are in a state of imperfect knowledge, evolving toward something that we haven't become yet. Everything is evolving into something that it isn't yet. It may not seem like it at times, but each moment of each day, we change into someone who was not the person we were a moment ago. At the physical level new cells are born and old cells die. At the mental level each moment that passes we experience something. Each experience adds to the inner environment in the form of a memory or belief. Each memory and belief builds a self-concept that acts as a force on how we interact with the environment. Then as we interact with the environment, we change it in some way, creating a new environment for us to discover and experience. Everything that exists is evolving, because everything that exists is in motion, and motion creates change. Even the grandest mountain will eventually wear away into small rocks, which will themselves turn into sand and then dust.” (pp. 159-160)

A - Such a great expression about the nature of life and affirming that we are on a journey to become more than who we are at this moment.

A - No matter how horrible of a trading day I had before, I wake up every day with excitement and hope for the opportunities that the market has to offer me because I know that yesterday will never define who I am as a trader today.

[Dan F 73]

 

[Susan 111]

Chapter 15 - The Psychology of Price Movement

W - If we do not have the strength to actually move the prices in the direction we would most benefit from, then the next best thing is to learn to identify & align ourselves with the side that has established dominance until the balance shifts and again align ourselves with the side establishing the strength.  

A- Mark is telling us to figure out where big money is going & follow it!

A - This is 100% what I am trying to do everyday!  Figure it out as early as possible (but with confirmations) and get into the trade until the move is completed.

[Dan F 73]

Chapter 15

W- No matter if you’re going long or short it’s important to think in the thick of a move what the traders in my rally are thinking and do my feelings match their sentiment. Mark listed a few thoughts about how to keep the market moving and this one stuck out to me personally.

 A- “What kind of price action will sustain the buyer’s beliefs that they can make money?”

A- I know that I need to push myself to stay vigilant for any possible false starts. Identifying this is what I can think to do about this so far. Its better to address your issue instead of letting them fester.

[Norma 33]

Chapter 15 – The Psychology of Price Movement

W: “…that the “objective observer” doesn’t care one way or the other; she would just be looking for signs and opportunities”.

A: Mark is saying we need to come to the market with an open mind, without bias.

A: Part of my trading is waiting for the market to tell me what it wants to do and where it wants to go. Waiting for opportunities to enter the market. Not to fight the trend.

[DenHei1 13]

Chapter 15

W:  "the greater the expectation traders have about something happening, the less tolerance they have for disappointment."

A:  Mark is affirming his - "anything can happen" belief.

A:  I have expectations.  I expect the market to move, to do what I want, to fill my cup.... and when it doesn't I definitely have low tolerance for disappointment.  I must contantly remind myself that "ANYTHING CAN HAPPEN... EXPECT THE UNEXPECTED"

w:  The distinction I want to make is that the majority of traders don't specifically  relate to a fair price or value;  they relate to comfort.... When I say that traders relate to comfort, I mean some degree less of fear they normally feel."

A:  Mark is breaking down the fear (more or less) that makes seeing the non-emotional ticks up and down of colored candlesticks nearly impossible.  Reminding us to step out of our own psychology and see the market clearly - it's ticks up and down and the market psychology behind it.  But he is also reminding us to dig deep and work on getting past the fear (no feelings of comfort or fear - no feelings at all) - so that we can see the market clearly.  

A:  I have found that the calm I feel is not calm - but like he is saying - a degree less of fear than what I normally feel.  This is something I am working on - and where I am using the fear/resentment journalling to help me.  It's amazing to me how much fear pervades my life and mind.  I know I can see - but sometimes I'm blinded by fear.  I will continue to journal not only before trading - but even during - fears / resentments.   I also find speaking them aloud - can help.  Sometimes just recognizing that I feel fear helps diffuse it.  

Edited April 13, 2023 by DenHei1

[Susan 111]

Chapter 16 & 17

W - You need to focus on mastering the steps to achieve your goal and not the end result.

Always keep in mind each moment is a perfect reflection of your level of development.

When you start trading from the perspective that mistake don't exist, you will be amazed at the sense of freedom you will feel to grow by accepting your results as a reflection of who you are in the moment, which then allows you to determine what you need to learn to do better.

A - Mark is saying - focus on performance, not results.

Each moment (good or bad) tells you where you are at and what you need to do to get better.

A - I think Mark is initially reinforcing how important it is to focus on our performance, not on money.  If the performance & execution gets better; the money will follow. 

I think we use our charts as a reflection of where we are at any given time.  They are not mistakes, rather something we need to work on to grow.  It could be something we have to keep doing for it to sink in or something we can do once and learn from....in either case it is not a reflection of our intelligence, self worth or a stupid mistake.... it is just something we did and we can learn so we do something different the next time.

[Norma 33]

Chapter 16 – The Steps to Success

W: “…need to change the definition of a missed opportunity... Missed opportunities are trades that would have always turned out perfectly because they only occurred in our minds, where we can make anything be as we want it to be”.

A: Mark reminds us to let go of the opportunities we perceive as missed. The reality is, there are no missing opportunities, it’s just in our minds the belief that the missing opportunity would turn out as the perfect one and got away from us.

A: I think we can all relate to that, FOMO. We need to make a constant effort not falling into that. At the end it drains our mental energy and distracts us from the real opportunities.

[Miguel Angel 65]

Chapter 14 - Techniques for Effecting Change (catch up)

W - “It is important for you to understand that beliefs cannot be destroyed; once we have formed one, it will be with us for the rest of our lives. However, we can draw all the energy out of them. For example, a pile of wood set on fire will release the energy of the wood into the atmosphere as heat. The wood will be transformed into ashes. The ashes do not have the potential to produce any heat and, thus, will have little if any effect on the environment. Yet the ashes still exist. De-energized beliefs work the same way. They will always exist but no longer have any effect on our perception of information or our behavior.” (p.168)

A - Mark, again, is simultaneously expressing a truth and hope about the nature of memories, associations, and beliefs. The truth is that once something is formed in our mental environment, it is there for the rest of our lives. But he gives us hope that we have the capacity to reduce the energy out of those things in our mental environment that cause us pain and interfere with our goal for a happier life and that we can create new beliefs, memories, and associations to achieve our goals.

A - I love this expression of effecting change, not just from a trading perspective, but also for the potential to live life full of happiness and victory for ourselves and for others. I will always have this passage to remind me that I have power to effect the change I want out of life.

[Miguel Angel 65]

Chapter 15 - The Psychology of Price Movement (catch up)

W - “The market's behavior can be defined as the collective action of individuals acting in their own self-interest to profit from future price movement while simultaneously creating that movement as an expression of their beliefs about the future. Behavior patterns result from the collective actions of individual traders doing one of three things: initiating positions, holding positions, and liquidating positions.” (p.188)

A - Simply put, the market is a collective expression of buying, holding, selling based on the beliefs that the participating individuals have about the future which can be read in the charts.

A - Chart reading has been my focus in trading above all other indicators and to understand that what I am observing in the charts is just not candles that are moving up and down, but the collective beliefs that all traders are expressing at that moment is a powerful insight that I can use to improve my trading execution.

[Dan F 73]

Chapter 16

W- There are straight forward fixes to how a trader trades, like widening your stop and cut your partials. Then there are the more abstract methodologies to deal with. Here are the two methodologies statements that resonated with me.

A- Mark talks about how technical traders should try to not out think the method and he emphasizes to trade mechanically.

A- I will again be mindful of these thoughts and try to ask myself while trading does this next move fit into either of those methodologies.  With trading psychology being so broad and deep it’s good to not fix every thing at once nor to work on something to utter perfection.

[Miguel Angel 65]

Chapter 16 - The Steps to Success

W - “Our committed expectations about the future will act as a force on our perception of market information to control its flow into our mental system in such a way as to avoid a confrontation with anything that doesn't conform with what we already believe is possible. Which, of course, is always going to be less than what is possible from the market's perspective. If we are perceiving much less than what is available, then we are out of touch with what is possible from the market's perspective and setting ourselves up for a painful forced awareness. To be objective you have to make "uncommitted assessments of the probabilities." Which simply means that you have no commitment to any particular outcome. You just observe what is happening in each moment as an indication of what will probably happen next.” (pp. 220-221)

A - Mark is emphasizing that we need to be objective observers of the market without pressure of doing anything unless our setup appears and then we execute without worrying about the outcome. No fear, no rejection, no right or wrong. Process over profits.

A - One of the areas in trading that I struggle with is anticipating moves instead of making “uncommitted assessments of probabilities”. I will work on being more objective in my trading process and feel no pressure to do anything, as Mark states, and to only execute when my setup appears based on my trade plan. I will de-energize any feelings of fear, rejection, right or wrong during the assessment and actual trade.