Every trade has an uncertain outcome. Don’t try to avoid something that is unavoidable. I accept the risk.
Trade without fear or overconfidence, perceive what the market is offering from its perspective, stay completely focused in the “now moment opportunity flow,” and spontaneously enter the ‘zone’ – a strong virtually unshakeable belief in an uncertain outcome with an edge in your favor.
Freedom requires Free-Will Rules and Discipline for Success
Trading offers a gift (freedom to trade) and a risk at the same time. We are in complete control of everything we do, but there are no external boundaries to guide our behaviour, as with NLHE.
The structure we need to guide our behavior originates in our mind, as a conscious act of free will. Eliminating fear is only half the equation. The other half is the need to develop restraint.
Accept complete responsibility for the outcome of any particular trade. The market is full of opportunities. Developing a winning attitude is the key to your success.
Forget results and focus on the process
- Stop system hopping, chasing the holy grail. View trading for what it really is – a process of possibilities and probabilities
- Define your edge and follow the process of skill development and execution
- Trade a style that fits your personality and risk tolerance.
Take responsibility for everything that happens
- The market will do whatever it wants. I stop avoiding and start embracing the responsibility and risk.
- Your only two jobs are: trade selection and trade management
Trading is all about thinking like a chess player – anticipating all the possibilities and probabilities. Think in terms of probabilities
Trading doesn’t have anything to do with being right or wrong on each individual trade. I don’t try to predict outcomes.
I commit to taking every trade that conforms to my definition of an edge. By taking every edge, I increase my sample size of trades.
I Pre-define the Risk before Getting into a Trade
The best traders are in the “now moment” because there is no stress. There is no stress because there is nothing at risk other than the amount of money I am willing to spend on a specific trade. I completely accept what the market is offering me.
5 fundamental truths
- Anything can happen.
- You don’t need to know what is going to happen next in order to make money.
- There is a random distribution between wins and losses for any given set of variables that define an edge.
- An edge is nothing more than positive EV over a medium sized sample. Examine results in samples of 20 trades.
- Every moment in the market is unique.
The 7 Principles of Consistency
I am a consistent winner because:
1. I objectively identify my edges.
2. I predefine the risk of every trade.
3. I completely accept the risk or I am willing to let go of the trade.
4. I act on my edges without reservation or hesitation.
5. I pay myself as the market makes money available to me.
6. I continually monitor my susceptibility for making errors.
7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.
Carefree state of mind
When I am in a carefree state of mind, I won’t feel any fear, hesitation, or compulsion to do anything, because I have eliminated the potential to interpret market information as threatening. To remove the sense of threat, I accept the risk completely. I am therefore at peace with any outcome.
Embrace the mayhem (James 040620)
- Appreciating and accepting market noise – the “mayhem” – is the key to trading enlightenment.
- I realise that simplicity and robustness are essential to give myself a chance.
- I realise that good trading always “feels dumb” – because the short term results are dominated by randomness.
- I realise I will never and can never “figure out” the market. I realise I don’t need to figure out the market. It appears I can identify bets with a reasonable chance of being +EV. I systematically bet on many of those.