Ken's Continuing Successes with EO's system

So what is the difference from those that seem to slip into this seamlessly with little or no struggles ? We hear it all the time Patience, Mechanical trading. Plan your trade, then trade your plan. These are all things that could make a great trader. But what is the underlying issue at hand that makes some able achieve those trading habbits while others don't ?

Will Power and Discipline. Here as a defintion I found on the two :

Definitions of Will Power and Self Discipline

Will power is the ability to overcome laziness and procrastination. It is the ability to control or reject unnecessary or harmful impulses. It is the ability to arrive to a decision and follow it with perseverance until its successful accomplishment. It is the inner power that overcomes the desire to indulge in unnecessary and useless habits, and the inner strength that overcomes inner emotional and mental resistance for taking action. It is one of the corner stones of success.

Self-discipline is the companion of will power. It endows with the stamina to persevere in whatever one does. It bestows the ability to withstand hardships and difficulties, whether physical, emotional or mental. It grants the ability to reject immediate satisfaction, in order to gain something better, but which requires effort and time.
Everyone has inner, unconscious, or partly conscious impulses, making them say or do things they later regret saying or doing. On many occasions people do not think before they talk or act. By developing these two powers, one becomes conscious of the inner, subconscious impulses, and gains the ability to reject them when they are not for his/her own good.

These two powers help us to choose our behavior and reactions, instead of being ruled by them. Their possession won't make life dull or boring. On the contrary, you will feel more powerful, in charge of yourself and your surroundings, happy and satisfied.

So My idea of Will Power and Discipline are that, will power could be a one time event or action. Then if you continue to use will power to basiclly force yourself to do what is in your best interest anyway then it will develop into disicpline. Which to me would be the skill of continually acting in your best interest . Not just one time you did the right thing but doing the right thing as a new formed habbit.

So how can we learn what so many feel is a genetic trait and not a learnable skill.

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I know many may find this stuff not relevant to trading then why do so many not make it. We can go to the journal section and find many consitentlly profitable systems or strategies. The wormhole, Buldcity's . Eo's thread Rufus, Anyone of dozens. One of the most agravating things for EO was the fact he would give trade call then ask who took the trades and almost no one had. We had a guy who with over 5 years trading exprience trading and running a bussiness full time trading one pair was making a minnuim of 20% gains a week. Yet we couldn't do what was in our best interest to do.

Everyone says they want a mentor someone to one on one teach them to trade. But would you do what they tell you to do when they say do it ?
or would you find some reason to be self defeating. 95% fail if that is accurate because of not knowing are having the discipline to manage thier trades correctlly.

I was looking at a few threads latelly where people had posted their trading and had nice gains for a decent period of time posting the graph that comes with some reporting software. nice upward movement thenBoom a downward spike that wiped out months worth of gains. Without knowing anything more than that you can see that discipline failed at that point.

This is also why we have successfull sclaper and longer term traders . As if you can act on pure will power for brief periods of time , Maybe scalping is a trading style better suited to you. But if you can develop that sclping will power to include allowing the correct entries to run a bit further it could be possible to build some discipline towards longer term trading.

The scalper entry with the major swing traders gain to me would be the ulitmate goal and is what EO and those guys were great at. Knowing when to hold and when to take the scalping gains.

So how can we learn discipline. next post..

The idea that we can learn a new way of thinking may not seem important to many. But think about it for a second. We all have the desire to be fulltime traders or we wouldn't be here,

Now also think have you ever tried another money making idea or business that also didn't workout, are you overweight or smoke or need to excerise. All these things can be helped with self discipline.

If you have read much of my stuff you know that i talk about self motivational things. ike meditaing and visualaztion. but even those will fail until we develop the discipline to do them on a regular basis.

I have had some great revelations in my life when i started to inderstand a bit more about the power we have over our own thoughts and feelings. Just learning to be happy all the time and the ability to deal with other people and not lose your cool. That alone is a great thing and can move us forward towards a better life. because once you learn to control your emotions others will find you more of a asset verses the one that flies of the handle all the time.

Anyway getting off topic. So how to learn discipline. Will Power and Discipline are the art of doing the right thing at the right time even if it is against our nature. If you read or have read mark Douglas . Trading in the Zone , It gives a bit of a insight to why we can do self defeating things due to the way we are raised and the society we live in. It is a undeinable lie that it should be hard to become wealthy and happy.

So we now know that we need to use Will Power to force ourselves to do what is right. In the little studying I have done on the subject the learning discipline carries over from one thing to the next. In other words let us say ou learn to use discipline to help yourself eat better or quit smaoking. Then having aguired that strength it is easier to use it to do the right thing in trading. As you start to learn that it isn't hard and it is the right thing to do and has no negative aspects.

So many times we don't try new ideas especially when it comes to how we thi8nk or behave as we believe that it is forcing our self control from us. but in reality it is teaching is more control and is of such a benefit it can amaze us.

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So to begin to learn to do what may be uncomfortable but is he right thing to do. Start by doing that in your daily life. : Here is a list from the siteb I got the defintions from on some excrises that could help to learn discipline:


Here are a few exercises:
1) You are sitting in a bus or train and an old man or woman, or a pregnant lady walks in. Stand up and give up your seat even if you prefer to stay seated. Do this not just because it is polite, but because you are doing something that you are reluctant to do. In this way you are overcoming the resistance of your body, mind and feelings.

2) There are dishes in the sink that need washing, and you postpone washing them for later. Get up and wash them now. Do not let your laziness overcome you. When you know that in this way you are developing your will power, and if you are convinced of the importance of will power in your life, it will be easier for you to do whatever you have to do.

3) You come home tired from work and sit in front of the T.V. because you feel too lazy and tired to go and wash. Do not obey the desire to just sit, but go and have a shower

4) You may know your body needs some physical exercise, but instead you keep on sitting doing nothing or watching a movie. Get up and walk, run or do some other physical exercise.

5) Do you like your coffee with sugar? Then for a whole week decide to drink it without sugar. You like to drink three cups of coffee each day? For a week drink only two.

6) Sometimes, when you want to say something that is not important, decide not to say it.

7) Don't read some unimportant gossip in the newspaper, even if you want to.

8) You have a desire to eat something not too healthy. For the sake of the exercise refuse the desire.

9) If you find yourself thinking unimportant, unnecessary, negative thoughts, try to develop lack of interest in them, by thinking about their futility.

10) Overcome your laziness. Convince yourself of the importance of what is to be done. Convince your mind that you gain inner strength when you act and do things, in spite of laziness, reluctance or senseless inner resistance.

Never say that you cannot follow the above exercises, because you certainly can. Be persistent no matter what. Motivate yourself by thinking about of the importance of performing the exercises, and the inner power and strength you will gain.

Trying to attempt too many exercises when you are still a beginner, might end in disappointment. It is better to start training yourself through easier exercises at first, and gradually increase the number and difficulty of the exercises. Practice will improve and increase your power, giving you a lot of satisfaction.

So maybe some of that will hit a note with one or two.. Next post I will give a idea to just use it in our trading.

If you have read the book , Emotion Free Trading or studied much from any number of sources going back hundreds even thousands of years. You will find a common thread and approach that many very succesfull ( Rich and wealthy) Men have and still use today.

You hear a lot of people say I need to get ready for a important meeting and need some time to prepare. It might supprise you that alot of those people are just running the meeting through their minds seeing the meeting having the results they hope to achieve.

In the book Emotion Free Trading he also suggest. seeing yourself in your minds eye as the succesfull trader you are . Actually watching yourself making the trades and correctchoices throughout the trade winning trades as well as losing trades.

What this does is not unlike any other professional skill or atheletic challenge. Yet when we mention doing this to achieve the greatest thing in your life total finacial and emtional freedom. Just think how Stress free your life would be if you knew without a doubt you had the everlasting ability to earn the money you need in life. In the Zurich Axoms they talk about traders that lose everything from time to time. But always bounce back because they know they can.

If your a doctor you run through a operation in your mind accounting for any mishap or contginciy that may come up. That way your prepared. if your a lawyer they spend countless hours going over the trial and learning it like it is a theatrical release. seeing each thing that could happen and having a direction to proceed.

Sports events study each others team so they know what to expect and have a counter plan to achieve their goal. So how can we even think that these things are not important. Training our mind to do what we want and not a emotinal respone is key to greatness.

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So if you find meditation a weird idea that brings up pictures of orange robbed flower sellers. Then just take a moment to write down a few notes that would greatlly improve your trading. I will not move my stop. I will wait for the entry to show itself. I will close my trades with a stop not take profit to soon. I will close any trade that doesn't move into profit on the next candle.

Whatever it is that is costing you the most. Shouldn't be to many things, Just the major and should take maybe 2 or 3 minutes to read. That way you can read it before trading and many times during your trading. Maybe add a goal. If I do this things correctly I will increase my account.

One thing should be if I become uncomfortable about a trade I should close it quicklly. We have to conquer our fears and becoming emotional is not a winning thought process.

If you do meditate I would suggest reading that section in Emotion Free trading.

To help in other parts of your life. Use the same idea. If your trying to eat better have a card in your car. That says what you should be buying at the grocery store and what should be avoided.

Same with smoking when it is smoke break time or time to buy more. Read the card that gives the reasons that will benifit you . the money saved the gained health. the freinds that avoid you because you stink.. LOL


I hope some find this information helpfull. if your already successfull maybe it sounds kind of sad. But I find almost everyone has something that they could improve in their lives. maybe your the best trader in the world stinking rich. Then maybe you can use some of these ideas to acheive the happiness you found that money didn't deliver..

Anyway Seems I am missing something but enough for now.. Hope your All having a great weekend and be happy. Ken

Thanks, Ken, for all of these posts. There's much to think about today and going forward.

Thanks for taking the time to write your thoughts down ken, allways appreciated

As far as self dicipline and willpower goes you definately hit the nail on its head. IMO its impossible to be successfull in anything you do without it. I used to work in sales and have also been a manager of a sales division. The average lenght of a new employer was probably under a month and that is something that wasnt just at our firm, it was for the whole industry. What it really came down to was a lack of dicipline and willpower. People would time and time again start of, just like in trading, full of enthusiasm, energy and high hopes, but when they meet that first inevitable uphill and got some resistance, they would take the easy way out, quit and throw in the towel, didnt matter how much we prepared them.

The sad thing is that absolutely everyone can become great in sales but it simply doesnt happen overnight, it takes time, dedication and a whole lot of staying power, and the part that is somewhat confusing to me still is that most people simply lack the ability to follow through. Something iv thought about alot and it really does suprise me how easily people give up, eventhough they fully understand the rewards that could come if they succeed they just drop off at the first sign of troubble. If one just could hit a switch and get people to really realize the potential that lies within us, man that would change so much for so many.

The correlation between sales and trading is amazing, and I bet anyone that has been in sales for a period of time can relate to that. So im extremely greatfull for the experience iv taken from it as its helping me significantly in growing as a trader and in learning this business.

A quote that comes to mind is that "people dont fail until they give up".

Just felt like writing a small rant as this is something that really hits home with me, hope you dont mind.

Have a great weekend all!

Thanks for your input it is always easier for more to believe if they see more that have a similiar veiw. Yes i agree it would be easier to give up, But that is never a option for me..

Take care and enjoy life. Ken

Good Morning All; I am always trying to think of things that relate to us that could help us to see that what we want to do is not hard just needs applied. I had posted the above stuff on Mikew's motivation thread.

And Supremechaos posted this motivational video of someone I am sure had many more things to overcome than us. Those are great to watch but like so much we read and see, we tend not to hold those thoughts very long or they don't relate to us, so we let them slip away.

But it got me thinking about the same sort of things ( on a smaller scale)
that I am sure each of us have overcome. I know that we all have some triumphs where we had a hard choice or physical challenge and choose the right path instead of turning away.

So my idea for you is to maybe make a list of your OWN motivational ideas. Things you have accomplished and triumphed over and when you feel that doing the right thing in trading is going to be painfull.

Just remember what you have conquered in the past and that it is almost always less a problem than you imagine it to be.

Imagine that is a key thought, our fears of failure of total losses and of being wrong , or looked at as a failure. They are always worse in our minds than in realty. Just like that trade that has developed into a monster you can't seem to do anything about, sitting there watching it gobble up your equity. The moment you close that trade you feel instantlly better.

Because the power has now been placed back into your hands. You now look for the next good trade that will start you to recovery. The key is to start to understand that our inaction is causing us the greatest amount of failing to achieve our goals.

Weither it be inaction of doing your setup, or analysing the charts , deciding on the trend. Or just letting bad trades run to far. It all boils down to not doing what we KNOW we have to do to become independent of the worlds troubles.

Think of how it will feel once you join the ranks not only of the best traders but of the small precentage of people that live life on their own terms. Not having to fear the next stock report or how their bussiness is doing .

So just remember you have survived worse , you know what to do. It never will be a action free lifestyle , you will always have to make choices better to learn now than when your account is huge then you choose wrong.


Have a great day Ken

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Reminds me of the number one rule of sales,

"Don't Forget to ask for the order" ( how many do you want, would you like those shipped here. )

Same here don't forget to ask for the gains.. they are there for the taking.. ask and you shall recieve.

We read things like that we watch videos that get posted and we feel that we can conquer the world, So maybe spending a few minutes a day getting your mind in the right place wouldn't be so bad.

I am not preaching of any one thing , we can all us what is best for us. I like to go to breakfast and leasurely enjoy it not ruysh through because I am late. While I watch the people around me. I always think I am doing as well or better than most because I am at the very least happy.

Then I will run through my mind what needs done that day, and how I want the day to go. If I have to deal with some people I don't wnat to i change that in my head to it will go the way i want it. I used to have to go to managers meetings and at first really hated them.

But I always had a long drive to attend. So I would while listening to music go over how I thought the meeting should go. it was real strange because when I first started using that approach . All of a sudden you realize that things are happening the way you expect them to and the lack of suprises is very calming.

Sure at times something would come up not on YOUR script , but you now feel in control not a victim. Most of us do feel like victims anytime we aren't in control of our emotions. We feel that others have the power over us and that we have to bend to thier will. But if you have preprogrammed in advance what will happen and it does to the most part. It is easy to allow trouble to be dealt with in a reasonable fashion. Not panic or become defensive,

It has been so enlightening to me to realize that there really is hardly ever any reason to get angry or mad. Maybe you need to be firm and a bit overbearing to get someones attention . But not to lose control is a good thing. Orb to feel your being singled out or picked on, when in most cases it is just your Imagination.

So lets learn and remember that we are in control of our lifes and that by being in control of the moment we are then incontrol of our destiny.

chart

chart

chart

If you can only hold one thought in trading hold this one.

Chart

Call it what you will Trading Zone ( My favorite), Fib levels .
This is what it LOOKS Like..

The goal is to get the long leg, If you can get the short leg also more betta.

chart

Hope you noticed how the up leg green INVERSED ( reversed and upside down) green check marks. the entries also aligned with the Apex. the point where the chek mark turns , both legs join. In a perfect trend with 50% retraces that is the perfect entry point. Even with the little being off of a 61.8 or 38 level it will be very similiar. Then the target will a lot of times be the extension levels of your fibs . So if it was a 100 pip down ( short) leg for a long entry the long leg could be 200 pips. or 50 and 100. whatever twice as long .

So a little practice with your fibs or just watching close and thinking in fractions helps..

Awesome posts. I wanted to chime in briefly on the last 2 subjects of (1) how long it takes to learn something and (2) discipline.

I'll start with #2, because it flows directly into #1:

I'm a small business owner who is hoping to become proficient enough in trading to sell my business and trade full time. In my experience, the single most important thing in running any small business is a written set of policies and procedures in the form of an operating manual that is vigorously enforced. Even in businesses with only 5-6 employees, having everything mapped out in writing, exactly as it should happen during the course of the day, makes an incredible difference.

Of course, the carry over to trading is obvious. You want to have your entire game plan laid out before hand so you can focus on executing. That way there is no gray area, and there should be penalties setup for not executing correctly.

The tricky thing about discipline in retail trading is that the retail trader must be the one to setup and enforce the rules. That's an incredibly difficult feat, requiring an intense amount of preparation. The trader must (A) become as disciplined as possible, and (B) structure their trading in such a way that it requires as little discipline as possible to still achieve the stated goals. I know these sound contradictory, but the basic point is that we are human beings, not machines. We must discipline ourselves as much as possible and then structure our trading in such a way that acknowledges these "discipline gaps" will always exist somewhere. If a plan requires absolutely perfect discipline in order to succeed, take a guess as to what the failure rate is going to be.

So, the point I'm trying to make: Make the plan as easy and clear cut to follow as possible. Then, if you want to trade differently, you have to change the plan first. If you don't, then you've failed to follow the game plan, and there are predetermined penalties, whicih you plan for from the beginning. Don't get me wrong -- the PDF on EO's thread is great. And there are plenty of other great tools, like his trading work sheet. But would you run a multi-million dollar business on the basis of those documents? Of course not. In my opinion, those documents were meant to help each individual come up with their own, detailed, thorough operations manual for trading -- they were never meant to be the manual itself as they are only 10-20% complete for that purpose. Here's some examples of other things to include:

- You would want far more detail: Exactly what is your SL for each setup, and where will you TP? This of course depends in large part on whats going on with the higher time frames, so you've got to break all this down. Distinguish between a quick scalp vs a trade that has the chance of bouncing off a 4HR trendline.

- You would want extremely detailed checklists for each setup: Laminate these, keep them by the desk, etc. Maybe get one of those expo markers so you can keep reusing them over and over. The point is, if you deviate from your check list, you have failed to trade correctly.

- You would want penalties predetermined for failures to follow the plan: Maybe you reduce your lot size for X hours, or maybe you redo that particular setup on a simulator (like the vhands2 one) 10-20 times. Or maybe you just stop everything your doing and go run a mile.

- You would want some "proactive" discipline work built in: Ken has already mentioned a lot of this. Personally I find meditation very helpful, even if its only 5-10 minutes a day. Daily exercise would not be a bad choice either.

This is just scratching the surface but I think it illustrates the point I'm trying to make. I'm sure there are many very successful traders that do not have a thoroughly organized and well laid out plan, but I'd bet a lot of pips that they did have some sort of thorough plan when they were learning (maybe it was just a large microsoft word file, or a giant collection of marked-up charts and some excel spreadsheets showing goals). And I would argue that they could have learned even faster if their plans had more clarity and direction to them.

This leads me into topic #1 (starting a new post in case this one truncates)..

Okay, my apologies on the length of that last post, I ran on for quite a bit. That topic is fresh in my mind because I've been working on putting together my own "operating manual" for trading for the last few weeks. It's taken quite a bit of time but it's been extremely rewarding, and it is far from complete.

The next topic I was going to comment on was "the learning curve", as discussed by Ken. I'll keep this as short as possible.

I agree 100% that different traders progress at different rates. I think in any field involving (A) individual performance and (B) self-directed study you are going to get incredible differences in rates of progression. As noted by Ken, a lot of people compare trading to professional fields like law, accounting, and medicine. They conclude from this comparison that trading should take just as long to learn. I disagree. All of these share the trait of individual performance, but not self-directed study. In law, accounting, and medicine there is of course plenty of study, but not truly self-directed study. There are classes, tests, grades, and ultimately certification exams. The individual is required to move at the pace of the program -- no faster, no slower. They are free to learn the particular material at hand in whatever depth they want, but they cannot progress beyond it (and they must eventually learn it to a particular depth, or they will fail).

Trading is self-directed study. In the beginning, you don't even know what material you should be studying. There are no tests or certification exams. You attempt to validate everything directly through the market. But, the main point is that the individual is free to learn and use whatever they want -- maybe that's several indicator systems, or maybe it's price action trading. They are also free to learn poorly if they would like. No one is going to "fail them out", as long as they have additional money to throw at the market (real or demo money).

In the professional fields you can't move faster than the program, but they will keep you from moving too slow (by failing you). In trading, you can progress as fast as you would like, but no one is going to prevent you from progressing too slowly (or even reversing in your progress).

It is up to the individual trader to impose the discipline required to ensure progression. I don't think it's any surprise then that there are huge differences in the individual learning curve -- some people are willing (and able) to put in 40-80 hours of week on their trading, and some people struggle to put in 5 hours a week. There will also be huge differences even amongst those 40-80 hour/week traders. Some of them are not willing to trade and study as effectively/intensely as they possibly can, and some are. Everyone surely knows someone who is willing to commit the time to something but not the energy.