1.) When it comes to trading, it turns out that the skills we learn to earn high marks in school, advance our careers and create relationships with other people, turn out to be inappropriate for trading. Traders must learn to think in terms of probabilities and surrender all of the skills acquired to achieve in virtually every other aspect of life.
2.) Within 9 months of moving to Chicago, I had lost nearly everything I owned. My losses were the result of both my trading activities and my exorbitant lifestyle, which demanded that I make a lot of money as a trader.
3.) You don’t need to know what’s going to happen next to make money. Anything can happen. Every moment is unique, meaning every edge and outcome is truly a unique experience. The trade either works or it doesn’t.
4.) More or better market analysis is not the solution to his trading difficulties or lack of consistent results. It is attitude and “state of mind” that determine his results. A winner’s mindset means learning how to think in probabilities.
5.) The edge means there’s a higher probability of one outcome than another. The greater your confidence, the easier it will be to execute your trades.
6.) Do you ever feel compelled to make a trade because you are afraid that you might miss out?
7.) People , expressing their beliefs and expectations about the future, make prices move- not models. The fact that a model makes a logical and reasonable projection based on all the relevant variables is not of much value if the traders who are responsible for most of the trading volume aren’t aware of the model or don’t believe in it. In other words, people who trade don’t always act in a rational manner.
8.) Price movement could be so volatile that it would be very difficult, if not impossible, to stay in a trade in order to realize the fundamental analysts’ objective.
9.) From our perspective here on Earth, the moon is usually visible every night and it seems so close that we could just reach out and touch it. Trading successfully feels the same way.
10.) Intelligence and good market analysis can certainly contribute to success, but they aren’t the defining factors that separate the consistent winners from everyone else.
11.) The best traders think differently from the rest.
12.) The market can do anything at any moment because every person who trades is a market variable. That means you will never learn enough to anticipate every possible way that the market can make you wrong or cause you to lose money.
13.) To operate effectively in the trading environment, we need rules and boundaries to guide our behavior. It is a simple fact of trading that the potential exists to do enormous damage to ourselves- damage that can be way out of proportion to what we may think is possible.
14.) To prevent the possibility of exposing ourselves to damage, we need to create an internal structure in the form of specialized mental discipline and a perspective that guides our behavior so that we always act in our own best interests.
15.) If you have to win, if you have to be right, if you can’t lose or can’t be wrong, you will cause yourself to define and perceive categories of market information as painful. In other words, you will view as painful any information the market generates that is in opposition to what will make you happy.
16.) In a state of overconfidence or euphoria, you can’t perceive any risk because euphoria makes you believe that absolutely nothing can go wrong. If nothing can go wrong, there’s no need for rules or boundaries to govern your behavior. So putting on a larger than usual position is not only appealing, it’s compelling.
17.) The first step is to embrace the responsibility and stop expecting the market to give you anything or do anything for you. Taking responsibility is the cornerstone of a winning attitude.
18.) Learn to accept the risk. When you accept the risk, you won’t perceive anything that the market can do as threatening.
19.) Being aware of something doesn’t automatically make it a functional part of who you are. Awareness is not necessarily a belief. You can’t assume that learning about something new and agreeing with it is the same as believing it at a level where you can act on it.
20.) People see what they’ve learned to see, and everything else is invisible until they learn how to counteract the energy that blocks their awareness of whatever is unlearned and waiting to be discovered.