How To Make Money Trading With Charts

perceive it as an opportunity. This applies to all walks of life, including
trading. Interpretation of stock prices may be biased by certain opinions.
Which is why all successful traders gather all the information they can to
have the most factually accurate and unbiased view possible. This ensures
that their action is not dominated by their personal emotions. It is
interpretation that causes market moves as well, so it would help to buy into
fear and sell into greed to get the best results.

Belief Systems

Belief systems are possibly the most important factors when it comes to
trading, because they shape our perception of the world around us. We are
raised to believe in certain ideologies that carry us through life and influence
all our decisions. It is extremely important to recognize this factor in trading
so that you are able to neutralize any negative or unhelpful beliefs that you
may have.

For example, often people are raised to believe that money is bad, or that
wealth is not well deserved if it’s not earned as a reward of strenuous work.
Our beliefs limit what we perceive and confine us to go on thinking the way
we are used to thinking. This, then, becomes a selfreinforcing cycle. If you
are to make money in the stock market, you cannot have self-limiting beliefs
interrupting your train of thought.

Our beliefs also create expectations; we expect results consistent with the
things we believe in. It is quite simple to stop self-limiting beliefs from
hampering our success by methods of visualization that will be discussed at
the end of this chapter. If you can take away the energy reinforcing your
negative beliefs and make it strengthen your positive beliefs, it becomes
easier to reject thoughts that cause a lack of conviction in our actions.

For example, for long the Pakistani cricket team has never won a World
Cup cricket match against India. And while lack of preparation and training,
and not adapting to different playing conditions contributed to their losses, a
negative belief system may well also have set in. After consistently losing to
India six times in a row, it was not inconceivable that a negative belief had
been reinforced that they couldn’t win. If so, the team will then play in a

manner consistent with that belief.

Accept the Randomness of Every Trade

Accepting randomness of trades is perhaps the most important thing to come
to terms with, because one does not have control over what happens in any
particular trading session. This acceptance is needed to get through the high
and lows of the stock market without letting them get to you. Not accepting
such randomness is the same as trying to predict which team will win a match
even before it starts.

Laws of Human Nature

Brian Tracy discusses these in great detail in his seminar on self confidence
(https://www.youtube.com/watch?v=4TWH7tlHt-Y&spfreload=10). These
laws were taught in mystery schools in Egypt, and have been rediscovered to
carve a path to success.

Law of Cause and Effect

We hear the saying “everything happens for a reason” around us everywhere,
and this law states exactly that. Each thing has a cause and there is something
it affects. Our thoughts are causes. We think about something or doing
something and it affects what we do, leading to a particular result.

Law of Belief

This law holds that whatever you believe, with feeling, becomes your reality.
You see things that agree with your beliefs and act on them accordingly, and
you ignore things inconsistent with your beliefs. This is taught to us over
time and gets reinforced by emotions and experiences. As mentioned before,
beliefs can be controlled. You can decide what belief to put your energy into.

Law of Expectations

We all have expectations from various aspects of our lives. Now, what is the
significance of these expectations? Our expectations are things we want to
achieve sometime or the other in our lives. Therefore we start to act in a
manner consistent with meeting these expectations. And so, expectations
become our self-fulfilling prophecies. Which is why it’s important to expect
the best. That way you will act in a manner that fulfils your positive
expectations.

Law of Attraction

According to this law, each person is a living magnet, and we attract the
things we desire. This is because everything in our environment is in
vibration. Even our thoughts vibrate because of the emotion behind them.

To make this law work for you, it is important to think about what you
want. Think about it, visualize it, write it down, tell people about it. Wanting
something enough makes things fall in a way that makes a path for you to
achieve it.

Law of Correspondence

“As within, so without.” This means that whatever is going on in our external
environment is a reflection of what is going on inside us. Wherever you look,
you see a part of yourself. If you struggle with negative emotions, you will
see negativity in your external environment. To control this, you must alter
your thought patterns and focus on positive thinking. This law is not very
different from the law of attraction — you attract what you feel on the inside.

Law of the Subconscious Mind

We’re all programmed to behave in a certain way. Our subconscious mind
keeps balance of this in the body and takes actions and words consistent with
our programming. There may be some negative programming in our minds,
but it is possible to reprogram. We will discuss this later when we discuss
visualization.

Law of Habit

This law states that habits can be changed and developed, because you
become what you think about.

Self-Concept

Our self-concept is our internal programming — it consists of our ideal self,
self-image, and self-esteem. Our self-ideal consists of our hopes, values and
dreams. Self-image is the way we see ourselves, and our self-esteem tells us

how much we like ourselves. These come together as our mental make-up,
and that obviously includes comfort zones. Comfort zones are areas of work
we are comfortable doing; things that don’t challenge us. The big news is
that while comfort zones are comfortable, they prevent us from
succeeding. If you don’t challenge yourself, you don’t make progress. If you
don’t make progress, you don’t like yourself. If you don’t like yourself, your
self-image deteriorates, and so on. It is most important to like yourself.
Everyday, whenever you get time, you should tell yourself that you like
yourself.

Law of Forgiveness

There must be things you are angry with about yourself, or matters you are
angry with someone else about. To start your journey to success, you must
forgive. You must forgive yourself, and forgive everyone else who ever did
you any wrong. This is because having grudges promotes negativity, and
your mind must be in a positive state to think, innovate, and concentrate. It is
a fact that 80% of the obstacles we face are internal and only 20% are
external. Your internal obstacles have to stop bothering you in order for you
to overcome external hurdles.

The reason why these laws are relevant to trading and should be followed is
that it is very easy to get overwhelmed by negative emotions in the market.
Our programming also causes us to blame the market, rather than accept
responsibility, for our losses. Following these laws and applying them to our
daily lives helps us keep a balanced perspective not only with regard to the
stock market, but of other areas of life too.

Qualities of a Good Trader

We have discussed in some detail about what a trader should not do. In this
section, we will talk about the qualities you must develop to become a
successful trader.

Creativity

By creativity we mean you should constantly be able to innovate and try new
things to improve your trading system. There are endless signals and entry
techniques, and you should be able to find something that best suits your
personality and maximizes your returns.

Emotional Stability

This chapter has discussed emotional stability in detail. It is important to be
emotionally stable because the market is very unpredictable, and anything
can happen at any point of time. You must be emotionally neutral at all times
to deal with this and take the right action as and when required. The market
does not test you on how well you can enter a trade. Rather, it tests you on
how you handle your wins and losses, and that’s where many people stumble.
On the cricket pitch this translates to the batsman keeping his cool no matter
how well or badly he’s doing, because emotional instability harms focus and
jeopardizes victory.

Acceptance of Changing Market Conditions

The markets are always changing, there is always something new happening.
To be successful as a trader, you must be open to these conditions, and adapt
to every change. It is unwise to be fixated on one idea as the underlying
market conditions may change and the same idea might not work anymore. In
order not to blame the market and accept whatever happens, you have to be
open-minded.

Passion

The most important quality needed to succeed in this business is passion. You
have to love what you do in order to do it well. If you get frustrated with the
market and cannot deal with the highs and lows, you won’t be able to make
money.

Self-Discipline

The only way to succeed in the stock market is to have unshakeable self-
discipline. Selfdiscipline means following your rules no matter what, doing
your analysis everyday, not getting carried away by fear and greed, taking
responsibility for your profits and losses and being emotionally neutral.

Visualization to Improve Your Trading Performance

Visualization is a deep-breathing technique where you visualize your desired
outcome, as clearly as possible, so that it becomes your future reality. You go
over what you want in your mind so many times that paths start to open up
that will lead you there. In this section, we will briefly go over some of the
core aspects of this form of meditation and discuss its uses.

Visualizing outcomes and solutions is one part of this, but you can also
change your habit patterns and mental programming through this method.

Just visualize the habit you want to change, cross it out mentally, and
imagine the new habit you want in its place. Doing this over a period of time
will change your mental programming and remove the bad habit.

In trading, this can be used to desensitize yourself to negative emotions
that you may be prone to. For instance, if a person is fearful of dogs, he’ll
freeze every time a dog comes near. Considering how many stray dogs are
out there on Indian streets, it would be very hard for such a person to step out
at all! But through visualizing this fear, and eliminating it, people can
desensitize themselves and the fear will stop bothering them.

One may also look at cricketers. Along with physical training, they play
their upcoming match mentally and win it over and over again. So, when they
actually get on to the field to play, they find themselves in a zone of complete
focus.

Our minds are divided into two hemispheres — the left and right brains.
When we are conscious, our left brain is dominant, because it is the logical
and rational part of the brain. Our right brain is the creative and intuitive part,
which is usually less active. These hemispheres also determine the inclination
of a person; if they are good with organizing and logic-based work, they are
left brained. If a person is creatively inclined and good at performance
disciplines such as music, art or dance, they are right brained. However, in
both cases the intuitive quality of the right brain is not very active, and
meditation can be used to enhance this quality and develop what is
commonly known as “gut feel” or “instinct.”

When we are awake, our mind runs at 21 cycles per second, and when
we’re sleeping, it goes down to 4 cycles per second. Through self-hypnosis
(deep breathing techniques), you can slow your mind down to 10 cycles per
second. All you have to do is, take three deep breaths and visualize your
desired outcome. You can modify this method to suit your needs, but this is
the core concept of visualization.

In this chapter, we have gone over some basic ideas on how to think when
trading. We have also discussed meditative techniques to help the process.
Due to the broad nature of this subject, all the issues discussed above apply to
all walks of life, and are not strictly limited to trading. Without fail, a good
attitude guarantees a successful life.