Tuesday, July 22, 2008

THINKING LIKE THE HERD

DO YOU HAVE YOUR BEARINGS?
ARE YOU A COUNTER INTUITIVE THINKER?



I know I was annoying yesterday with all those emails to you but how else can I show you in real time what works and what does not. But today won’t be a annoying; you need time to digest “TRUTH”, so today I will just try to cook up a little food for thought cause trading is not just about numbers and lines, it is a way of thinking. And the truth is this…everything you already know does work BUT, only when integrated into the whole.

Any technique you are using as your primary technique you need to know how it fits into the scheme of motion.

Why isn’t a biologist a doctor? A biologist knows all about the actions of cells but cannot heal you. A doctor knows less about cell biology but the doctor knows how to integrate cell biology into the whole of the body. Are you studying to be a cell biologist or are you studying to be a doctor?

If you are simply searching for a trading system you are studying to be a cellular biologist and when things don’t go as expected you won’t be able to heal your account. If you are studying to learn how to trade then, you are studying to be a trade doctor.

LOST BEARINGS

This has happened to me a few times in my life. I know it’s never happened to you because you are way too smart. But listen.

I’m at a party in an area I don’t know very well. A friend asked me to drop him off at his girlfriend’s house after a party. We hop in the car and I ask him where his girlfriend lives.

Friend, “Just go to the light and turn left.
Me, “What’s her address?
Friend, “Just make a right at the next corner
Me, “What’s her address?
Friend, “We’re almost there just make another left at the next light

After going through these directions all the way to his girlfriend’s house he got out we said our byes and I left. But only one problem…!

I got a few blocks from his girlfriend’s house and realized. I DON’T KNOW WHERE I AM. I’m lost. You see, I was focused on turning right and turning left per my friend’s instructions, that even though I drove to the destination I didn’t really know how I got there.

I HAD NO BEARING ON MY LOCATION…

If I had some bearing I could find my way home. I first needed to know if I was north, south, east or west of my home. Once I found out from a gas station attendant that I was east of my home it was a simple matter to just travel eastward until I could recognize where I was.

That’s what I try to do for you in your trading. Not just give you some trading techniques (turn left, turn right); I give you your bearings.

I am like you. No matter how much I think I know about trading I am always scouring for more information to add to what I know. I have spent thousands over the years on books, seminars, etc…

Even the very worst of these I found some value in. See, here is where most think differently than I do. I find the most value in information that will keep me out of bad trades. I look for information that will save me lost pips rather than information that will earn me pips.

If I know all the times that I should not trade, all that’s left is when I should. If it is a situation that does not say, “Stay out”, all that’s left is to get in. There is a sign on the door that says, “Do not enter”. If there is no sign that say’s do not enter, then it is okay to enter.

Don’t lose money and making money will take care of itself. You should not be trading to win. You should be trading not to lose. FLAT OUT…DEFENSE WINS CHAMPIONSHIPS…

Just like war, sports, or any competitive endeavor, in trading, defense wins.

I bought a particular book on trading some years ago that I thought was the worst trading book I ever saw. Later that week I was about to make a trade and something I read in that book caused me to pause and reconsider the trade. While I was reviewing the information the market shot up 250 pips against the position I was just about to enter.

One tiny piece of information contained in that book paid for that book four times over. That terrible book. So, this is where we may differ, on how we evaluate value. Most people do not because this type of thinking is counter intuitive, but that’s exactly the type of thinking you have to have in trading…COUNTER INTUITIVE.

Really the term counter intuitive just means, THINKING OPPOSITE OF THE HERD…

You will find it hard to only think counter intuitive only when it’s time to make a trade.
This type of thinking is a state of mind not a trading event.

Counter intuitiveness must be in play when you consider where you get your information, and how you get your information/education.

I’m not saying that you have to obtain the information I provide but I am saying that you should never stop buying books, courses, and as well as any free info you can find. Forever…as long as you consider yourself a trader.

So, if you want to save yourself a lot of time, and time is money, you need to start looking at your trading education like a college education. Tell me…each semester, how much do you pay for books? I have to spend several hundred for each of my daughters each semester just for books.

So, we are perfectly willing to spend 15-30,000 per year to go to college for 4 years and then hope that the economy is kind enough to give us a job that pays just enough to keep us in debt. HMMMM…

However, most traders think they can readily get the information they need to make a killing from trading all for free. I’m here to tell you that you can do it that way if you have 3-5 years for your learning curve.

So, even if you think you cannot afford to purchase information I’m telling you that you cannot afford not to purchase information. Is that counter intuitive or what.

I’m not hyping you to obtain LCM I’m saying you should be obtaining something and never stop obtaining. Build yourself a trading library.

In fact. You should stay away from me. I want you to go and check out everybody else first. Then come back and see me. In that way you will appreciate that the free information I provide is more than you get when you obtain all these holy grail systems.

LCM IS NOT A SYSTEM. It is a method. And before you can understand what that really means you need to go out and try all those systems.

Just some food for thought in response to a couple of emails I received…


Cheers, Jerry
jerry@forextradingmajic.com
tradingmajic1@gmail.com




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