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Regarding the above topic and noticing an exerpt from Mark Douglas's book
"Immediately below" I thought I would add something. It may be of interest to
those still having problems after reading the recommended books for traders.
Mark Douglas (2000): If you believe that anything can happen and that you don't
need to know what is
going to happen next to make money, then you will always be right.
Mark uses "If you believe" a lot. In my original post I mentioned I know a
therapy called REBT. This stands for "Rational Emotive Behavior Therapy". It is
a cognitive therapy developed by Albert Ellis in New York. It is essentially
Belief Therapy. Beliefs are habitual and subconsious. Therapists in this most
practical of all Therapies use a technique called "Inference Chaining" to
determine what the beliefs are that are causing the emotional upset (fear,
anger, sadness, whatever). The therapists know the beliefs but they direct the
client to find the problem beliefs on their own. This is not the couch therapy.
This is very active and the therapists fully explain what is going on "educate".
Once the problem beliefs are uncovered new ones are developed and exercises are
given to install the new beliefs so they become habitual. Part of the work
involes "Just do it" or what they call "invivo exercises". Another technique
called flooding is simply "Just jumping in with both feet and doing it a lot in
rapid succession". In the case of trading it would be taking a lot of small
trades for as long as it takes. The reason for this is the belief habits become
so fast and automatic they get tired in with muscle responses. One has to adjust
the beliefs and just do it to get proper results. Again this isn't sit on the
couch and listen to the therapist talk stuff. It is get off ones ass and just do
it stuff. Part of the reason I thought the extract of Mark's book was good is
because it emphasizes "If you believe" all over the place. As I mentioned above
the therapists extract the bad beliefs and get the client in the habit of
replacing the bad beliefs with rational beliefs. Reading a book is not good
enough. One has to have an active program to adjust the belief habits and it
takes time. Doing provides feedback which reinforces the beliefs "Yes, I lost
money but I did not die therefore the belief must be true". "Yes I had a win
after a loss therefore the odds in my system are likely to be true". If one
tries to tippy toe into the problem there is a hidden subconsious irrational
belief under that being this "It's awful, I can't stand it, I have to build up
gradually". Studies have shown that this is completely false. If is more
efficient to believe that flodding isn't awful and that it is more efficient and
as a result just get in there and set up a special exercise to get rid of the
irrational belief as soon as possible through active work and move on.
John.
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