Not surprisingly, I began to follow in his footsteps. When I began dating my wife, she challenged me about my exaggerations the same way I did my dad. When we were alone, she would calmly say to me, “That didn’t happen that way. When you exaggerate, you are outright lying. That is not a good habit!” Telling the truth is critical. It builds relationships and earns security, trust, and respect from those with whom you associate. It
helps others know who you truly are. It also prevents future trading missteps.
After you have been taught how to trade, if you are in the habit of exaggerating, you’ll begin to lie to yourself and others about your success. You will lie to yourself about how well you follow the rules when in reality you are trading on emotion and hunches. And if you lie about your level of success, that bad habit will curse you when everyone wants to see proof of your trading prowess. They’ll want to know your secrets of supposed success. Be honest in everything you do!
2. Are you a promise keeper or a promise breaker? Integrity is all about making sure your word equals your deed. If your word does not equal your deed, then you are a promise breaker. No one likes a promise breaker. You will not be able to attract the right people in your life unless you become a promise keeper.
When you make commitments to yourself and others, you need to keep them. If you are not a promise keeper, you will bring this bad habit to the trading table and you will not follow the rules as you trade. You will make promises to yourself and then break them. Believe me when I say that if you promise never to trade without a protective stop-loss order, which is an order that protects you from losing all your money in a single trade, and then break that promise, your career as a trader will quickly be over. Avoid this fate—be a promise keeper.
3. Are you a rule maker or a rule breaker? Freedom is something of a paradox because in order to be free, you must abide by a plethora of rules. Just look at all the rules when driving your car. But the more you obey the rules, the safer you are when driving. Breaking the rules, however, will endanger your life and may cost you your freedom.
Our lives are filled with rules. From an early childhood we learn our parents’ household rules. Then we learn rules about school, about dating, about working, about marriage, parenting, and so on. The rules in our life protect us and help us get where we are going faster and safer. Breaking those rules creates risks, problems, and, eventually, setbacks. These setbacks can take you completely off track and dramatically delay you from achieving your goal in a timely manner.
Learning to trade, and being successful at it, requires that you follow certain rules. Ignoring the rules will cause you trouble when you are trading. You will be driven by your emotions and will be caught up in chasing the market, changing your mind, and breaking every rule in the book in the spirit of trying to save yourself. Don’t
get yourself caught in this position.
4. Are you a good or bad listener? Being a good listener has its rewards. The greatest reward comes to those who develop the art of hearing what is not said. I used to be a bad listener, constantly interrupting people when they were talking and completing their sentences for them. I assumed I already knew what they were going to say and where they were going with the conversation. And yet I was almost always wrong. To overcome this habit, I had to learn to keep my mouth shut until the person speaking to me finished what they
were saying.
Interrupting someone’s conversation can potentially get the topic off track and plunge all involved into confusion. Imagine the impact of such an interruption on a trade in process. Learning to be a successful trader requires good listening skills. You may ask, “What am I listening to?” You are listening to the market’s story.
As the market moves, it “tells” a story. Because history repeats itself, where the market has been begins to predict where it is going. If you interrupt its story and try to second guess what it is going to say, you will set yourself up to make a poor decision. Although trading charts are unable to express themselves verbally, they do communicate to traders who are good listeners. You cannot find success in trading by disrupting the flow of the market’s conversation. Listen, don’t interrupt.
5. Do you think before you speak or speak before you think? Have you ever wished you could take back something you just said? Your comments and words are like ringing a bell; once the bell is rung, you cannot “un-ring” it! Your words are like the sound of the bell—they resonate! People who speak before they think are often branded as ignorant and annoying; few are respected. On the other hand, we respect and look up to people who think before they speak; we value their conversation and opinions because they are carefully
considered.
Which do you do? Are you habitually putting your foot in your mouth? Or do you respond with educated answers and arguments? As a trader, you must engage in a conversation with the market and your response can either be ignorant or intelligent. If you are disciplined enough to think before you speak, you will probably find success in trading. However, if you insist on speaking before you think, the market will allow you to prove your ignorance.
6. Do you think before you act or act before you think? The conscious and subconscious parts of your mind are your greatest assets and your greatest liabilities. The conscious mind dissects, considers, and categorizes everything you see and hear. If action is needed, the conscious mind thinks through how it will execute the action. If action is taken, the subconscious mind records the thought with the action and matches the two for future reference. In the future, all we have to do is think that thought, and the subconscious mind stands by to automatically execute the exact action that matched the thought. That is how a habit is formed.
Think about it once, do it once, and you have started a habit. Think about it three times, do it three times, and you now have established an automatic habit—good or bad. When you create good or bad actions, your subconscious mind takes over automatically, enabling you to do things without thinking. That is both good news and bad news.
If you are involved in any unproductive actions that have turned into bad habits, you are unconsciously incompetent. That is when your mind is working on destructive autopilot and you need to regain control. You need to become conscious again in order to recognize your bad habits and admit they are not benefiting you.
When you recognize your bad habits, you are able to learn a new skill or a new habit to replace the unproductive one. Learning a new, productive skill or habit is the first step to managing your success.
When you learn a new skill, you usually have to think through each step of the action. Thinking through that action and successfully executing it is called conscious competence. When you are disciplined enough to consciously repeat it when the situation requires, your subconscious mind automatically replaces the previously recorded action associated with the thought and forms a new habit. The subconscious mind does not think, it just recalls and executes the actions that matched the thought. The more you repeat the action—good or bad—the more that habit becomes unconsciously automatic. If you are locked into executing bad habits, you are unconsciously incompetent. If you are locked into executing good habits, you are called unconsciously competent. The road to success involves the recognition of unconscious incompetence, then
passing through to conscious incompetence, working your way to conscious competence, and eventually arriving at unconscious competence.
In achieving this you have purged yourself of your bad habits and have replaced them with productive, automatic, good habits that allow you to perform successful actions without thinking about them. It is like learning to drive a car. Think back: the first time you got into the driver’s seat, you literally had to think through everything that needed to be done just to pull out of the driveway. That process took about 15 minutes because you had to consciously think through everything you did. You were consciously competent. Now, if you began to drive and received speeding tickets and got into accidents, you became unconsciously incompetent. It was when you consciously committed yourself to stop speeding and to look in every direction to avoid accidents that you became a consciously competent driver.
Today, if you have been driving and are free from speeding tickets and accidents, you are considered an unconsciously competent driver. You have now become unconsciously competent in your successful driving habits. You probably take about three seconds to pull out of the driveway, probably driving part of the way with your knee as you juggle a cup of coffee in one hand and a cell phone in the other, focusing on the conversation rather than each individual skill needed to drive the car. Can you see how powerful your mind is and how critically important it is to properly think through everything before you act?
When it is time to trade, you must think before you act. If you act before you think and make mistakes, your subconscious mind will take over and record all your ignorant actions and subconsciously create bad trading habits. That is how you start to lose money or just get by in trading. Successful traders think before they act to execute successful trading habits.
Failure is like cancer. You don’t treat cancer by cutting it out. If you have to remove the cancer, much of the time it is too late. You treat cancer by preventing it and you treat success by creating good habits from the beginning. This way you are preventing failure. As you learn to trade, you will need to get in the habit of thinking through all the details potentially involved with that trade. You will need to have checklists that cover all the details. You will need to get in the habit of creating a trading plan and maintaining the discipline
of trading your plan. That habit forces you to think before you act, avoiding impulsive, emotional actions that generate unsuccessful trades. The market has no remorse for ignorance and impulsive action. The ignorant will suffer. Think before you act.
7. Do you manage your emotions or do your emotions manage you? Most financially successful people are very unemotional when it comes to business decisions. Believe it or not, successful business is nothing more than making and executing unemotional decisions that make economic sense. It is no different than unemotionally figuring out a mathematical equation. Two plus two will always equal four, regardless of how desperately you wanted it to be five—it will always equal four.
Unsuccessful business is nothing more than making and executing emotional decisions that don’t make economic sense. For example, holding onto unproductive employees because you like them, does not make economic sense and is a bad business decision rooted in emotion.
In life, there are good emotions and bad emotions. The bad emotions usually don’t serve us well, whereas the good emotions enhance our lives. When it comes to business, you need to make all your decisions unemotionally. Your decision process needs to be educated, logical, and unemotional. Any financial decision made in the heat of negative emotion will hurt you much more than it will ever help you.
When it is time to trade, the more you rely on your emotions to make your decisions, the more money you will lose. The more you rely on your education and logic, the more money you will make. Thinking through problems unemotionally allows you to stay focused on achieving long-term happiness and success. Bad things
happen to all of us, and many times we have no control over them. The reality is that we have no control over the cards we are dealt, we only have control over what we do with those cards. What we do have control over is how we handle the situation—emotionally or unemotionally. Successful traders manage their emotions; unsuccessful traders let their emotions manage them.
8. Are you responsive or reactive? When something doesn’t go according to plan or doesn’t go your way, do you throw a temper tantrum and have a “mental meltdown”? Unsuccessful people usually do. Successful and positive-thinking people are able to process properly the negative things that happen to them, put them into perspective, and move on. If your emotions control you, you are going to be more reactive than responsive and you will probably go through life with unhappiness, poverty, and mediocrity. As a rule, just about
everything negative that happens to us is either self-inflicted or the result of not paying attention to red flags, warnings signs, or details. Accepting responsibility for our own actions is such a painful event that we find it easier to react and blame someone else rather than analyzing what really happened and responding by creating a system to avoid that situation again.
If you bring your reactive bad habits to the trading table, the market will know exactly which emotional buttons to push. When it does, you will run like a scared rabbit being pursued by a pack of hungry wolves. Running scared is not conducive to calming down and thinking through your next move. Reacting versus calmly thinking through the situation and responding eliminates your ability to see clearly what happened. When it comes to any crisis, in trading or otherwise, you owe it to yourself to respond logically, not emotionally. Reactive trading will cause you to lose all your money, whereas responsive trading will allow you to think through your next move and take advantage of the next opportunity that knocks.
9. Is your ego more constructive or destructive? Are you more humble or more arrogant? Do you make your decisions based on your pride and ego or based on logic regardless of the consequences to your ego? If you go through life allowing your decisions and actions to come from a destructive ego, you will be no different than the person who purchased a brand new sailboat and ignored the first line of the owner’s manual: “Avoid storms at all costs. Do not go looking for storms as you sail your boat, they will naturally find you!” A
destructive ego is nothing more than a storm chaser living through one bad storm after another. A constructive ego keeps you focused on all the details necessary to avoid any and all storms as you sail through life.
A person with a constructive ego believes their mind is like a parachute; it only works when it is open. A person with a destructive ego thinks he or she already knows everything. Unfortunately, when it comes to trading, the market will teach that destructive ego the true definition of humility. When conflict shows its face to a constructive ego, the constructive ego, through humility, will in the end fight to be happy rather than right.
10. Are you more positive about life or more negative? How you answer this question will greatly determine your overall happiness in life. Is your glass always half empty or half full? There is a law that is every bit as much valid as the law of gravity: it is called the law of attraction.
The law of attraction stipulates that whatever we think about, those thoughts will radiate out of our being and create circumstances and events and attract people that align with our thoughts. When we think positive thoughts, that positive mindset will radiate out of us, creating positive circumstances and positive events in our
life and, as a result, will attract positive people into our lives. The flip side of this law is also true. When we think negative thoughts, that negative mindset will create negative circumstances and negative events in our lives, attracting negative people into our lives.
The power of this law plays an incredible part in determining your success or failure in life. Positive people are considered optimistic people, whereas negative people are considered pessimistic, but the only real difference between an optimist and a pessimist is that the optimist believes there is an answer to every question and a
solution to every problem, whereas the pessimist believes most questions have no answer and most problems are unsolvable. This mindset significantly limits the pessimist’s potential, success, and happiness in life. Optimists, on the other hand, create positive outcomes via the law of attraction.
The simple shifting of your mindset from negative to positive changes your entire world. Negative people are constantly shifting blame and frustrated about how unfair life is; they walk around with a victim mentality. Positive people accept responsibility for their circumstances and place themselves in a position to figure out how to avoid negative situations in the future. If you want to become a successful trader, you will have to purge your negative attitude and adopt a positive mindset and attitude. Negativity when trading only creates more negative circumstances, more negative events and financial losses.
11. Do you fear your mistakes or do you embrace them and learn from them? All people make mistakes, but only wise people learn from them. The only true mistake is the one from which we learn nothing. Mistakes show us what needs improvement. Without mistakes, how would we know what we need to work on?
Avoiding situations in which you might make a mistake could be the biggest mistake of all. When you have the courage to go out on a limb and make a decision, right or wrong, you risk making a mistake. Everyone makes mistakes. Strong people make as many mistakes as weak people—the difference is that strong people admit
their mistakes, laugh at them, learn from them, and become stronger. When you make mistakes, problems usually surface, which creates fear and anxiety.
Pessimists live a life fearful of making any mistake because that mistake will create a problem, and just about all problems, in their opinion, have no solution. Optimists can make just as many mistakes as, if not more than, pessimists. However, when a problem arises for an optimist, they aggressively work on it, believing it can be resolved, and the second they see the solution, the fear and anxiety dissipates.
When life hands you lemons, do you waste time sucking on them or do you learn to make lemonade? Making mistakes is part of being human. Just about all of life’s important lessons can only be learned the hard way, usually by making a mistake. Mistakes can be resolved and corrected as long as you believe there is a solution. So when you make a mistake that creates a problem, you need to muster the courage to face the problem head-on until a solution is achieved. As you do this repeatedly, unemotionally, you will develop the skill of effective problem solving. Remember, failure is not the problem; the problem lies in the time we waste lamenting over the problem rather than focusing in on the solution to the problem.
Failure is not falling down; failure is staying down. Learning from your mistakes is critical to your success. Choosing not to learn from your mistakes as you learn to trade will cause you to become a repeat offender. Your subconscious mind will take over and will form an unproductive bad habit, costing you money. You must pay attention to your mistakes and embrace them with a positive attitude.
12. Do you focus on what you have or on what you have lost? As you go through life making mistakes, you will inevitably lose things along the way—money, close relationships, personal property, you name it. But how much time do you spend holding onto those mistakes? How much time do you spend calculating your losses
and wishing you had back everything you had lost? The longer you dwell on past failures and losses, the longer you will stay captive in your current state of failure. You must let go of your past failures and focus on where you are going.
Have you ever wondered why the rearview mirror is 50 times smaller than the windshield? The windshield is so much larger to help us stay focused on where we are going versus where we have been. Holding onto past wounds or losses will only stand in the way of achieving your rightful success as a trader. Every trader loses
money and makes money as they trade, but successful traders will make more money than they lose. Successful traders spend no time worrying or thinking about their losses; they stay focused on the next opportunity that is knocking.
People that manage their poverty or mediocrity are so busy holding onto their past that they can’t grab onto future opportunities. Holding onto past losses or failures creates a bitter mindset. If you come to the trading table with a bitter mindset or victim mentality, you will bring with you all your past emotional baggage that has
stood in the way of you becoming successful at anything you attempted in the past. It will stand in the way of you becoming a successful trader. If you want to be successful at trading, you must focus on what you have gained versus what you have lost.
13. Are you a goal setter or a goal quitter? When you set out to do something, do you persist until you succeed or do you get discouraged and quit along the way? One of the most important habits to develop is the habit of finishing what you started. My son recently graduated from high school. At his graduation ceremony, the principal stood up and congratulated everyone for completing 12 years of education. He also pointed out that during the last year of school, 48 percent of the students in the graduating class had dropped out.
They came so close, but they did not persist until the very end. Most people in life are rainbow chasers; they set new goals almost daily. Most of the time their new goals have nothing to do with yesterday’s, last week’s, or even last month’s goals. As a result, they never move forward in any one direction. You need to believe
there is a reward at the end of every journey you embark on, a “pot of gold” at the end of each rainbow, or you will give up and never achieve your goal.
Setting goals helps you create a road map in life, outlining where you are going. Without that road map you can easily get off track without even knowing it and not know how to get back on. If you do not create goals as you learn to trade, you will not have any recognizable milestones of achievement.
Any great achievement will be accompanied by setbacks, but beginning with a clear goal in mind will keep you on track to reach your goals even after you hit a detour. Traders who set goals and persist until they succeed reach their pot of gold at the end of the rainbow. A trader’s pot of gold is described as executing your trades correctly 100 percent of the time. That does not mean you will make money 100 percent of the time, rather, that you consistently make more money than you lose. Persisting to achieve your realistic goals
is nothing more than discipline in action.
Read More : Your Personal Litmus Test
