disciplined trading - how to trade your way to financial freedom - van k. tharp

Traders Library Trade Secrets On-Line Manual Disciplined Trading How to Trade Your Way to Financial Freedom with Van K. Tharp, Ph.D. Why It's So Difficult for Most People To Make Money. z We have a limited capacity for processing information despite the fact, that the amount of information to which we're exposed doubles every year. z To cope with this limited capacity we’ve develo p ed a number of j ud g mental and decision makin g shortcuts. These shortcuts g enerall y hel p us, but the y also p roduce some serious p roblems when applied to the world of investing and trading. z Our emotions provide a background context in which all trading takes place. Emotions very seldom improve, trading performance, but they frequently take away from it. Key Elements of a Successful Trading Model Pa g e 1 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Pa g e 2 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Discipline Factors z Respond-ability z Beliefs z Low self-esteem. “I would feel much better about myself, if I were more secure financially." z Feelings getting in the way of trading or investing. Fear and anger are not useful to trading success. z Conflicts between internal parts of ourselves. For example, conflict might occur between your excitement part and the part that wants to make money. Pa g e 3 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Self Image Inventory Determine your own level of self-esteem by answering each of the ten questions below using the following scale: 0 - It doesn't apply to me 1 - It seldom applies to me 2 - It sometimes applies to me 3 - It mostly applies to me 4 It definitely applies to me _______ 1. I tend to take losses personally. _______ 2. When people give me gifts I tend to feel uncomfortable or feel I need to give something to them in return. _______ 3. I tend to blame others for what happens to me or for my problems. _______ 4. I don't really enjoy being alone with myself. _______ 5. I have trouble being open with other people and I tend to hold back. _______ 6. I often need to defend what I say or what I do. _______ 7. I feet put down when I'm criticized. _______ 8. I tend to have some shame, guilt and blame. _______ 9. I get jealous about the good fortune and success of other people. _______ 10. I need approval, attention and praise from other people to really feel good about myself. _ ______ Total Respond-ability List your four greatest problems Pa g e 4 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Trading Problems Life Problems Belief Heirarchy B eliefs are filters which help creat your reality. Pa g e 5 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html The Hierarchy of Beliefs A change at the deepest level would change the entire system, because anything at a more superficial level that was not supported by the change would not be stable. The Wizard Technique for Changing Your Behavior Pa g e 6 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Understanding the Importance of Mental Rehearsal Pa g e 7 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html You will be notified by Traders Library of new offers, changes, im p rovements and additions to our web site. Copyright © 2000 Traders' Library Pa g e 8 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html . Traders Library Trade Secrets On-Line Manual Disciplined Trading How to Trade Your Way to Financial Freedom with Van K. Tharp, Ph.D. Why It's So Difficult for Most People To. Pa g e 1 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Pa g e 2 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Discipline. wants to make money. Pa g e 3 of 8How to Trade Your Wa y to Financial Freedom 3/18/2003htt p ://www.traderslibrar y .com/tradesecrets/manuals/10990.html Self Image Inventory Determine your