One of the fundamental assumptions about trading (and life) that you are going to be exposed to in this book is that you and I (and the market) exist as possibility – not as facts or objects in space. You do not determine what reality is “out there”; rather you fuse with possibilities that you bring forth into the world – and this becomes your reality. And it is the particular observer of possibility you are that determines success or failure in trading the market. This is why it is so important to spot and change the familiar pat-terns that possibility has congealed into you called your sense of identity (as Steve did in the vignette). Otherwise you stay stuck in one particular organization of the self when other more effective possibilities also exist. Learning to observe the market through the eyes of possibility rather than through finiteness opens deeper positive potential for performances.
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It is into this infinite world of possibility that you (and that adaptive organ called your brain) are born. As a subset you are also born into your own particular history of influences that determine how you perceive the world around you (i.e. your life, your family, your situation). This is what you have to break out of to develop your potential as a trader. Long before you had the capacity to think or reflect, your central nervous system honed “you” into an organism that is built to survive in the particular environment in which you (your brain) are born. You came to embody the specific range of possibilities through this adaptation. Later, much later, your mind emerges – long after the historical narrative has been embedded into your neuro-circuitry. The very process of adapting to a particular world of possibility, by definition, also limits your capacity to perceive other ways of seeing and being in the world. Go back to the vignettes about Steve and Tom, and you will see this. This process all happens on automatic and we do not even notice it.
I understand that what I am presenting to you can be difficult to grasp. It runs against the grain of much of what you accept about yourself and what you see as “true” in the world. I also know that the vast majority of traders lose money every day attempting to stay the same and to not change their beliefs (that drive what they see as possible). I do not ask you to blindly believe what I am presenting here to be true. These are assumptions I am exposing you to about how perception and performance are interconnected. They allow me, and you, to make a new kind of sense of the struggle going on within the self – the struggle that is reflected in your trading.
The self (what you call your identity) becomes organized into a particular prison called your comfort zone (perceptual map for others). This automatic organization of the self becomes the “you” that trades. It is also this very automatic organization of the self that you (as an aware human being) had little license in creating. Based on environmental and adaptive pressures existing in your home life, in your community, and in your culture; your brain organized you into a particular set of beliefs that became “who you are”. This is your comfort zone. To re-invent yourself as a trader, you will have to break through the chains with which that adaptation has imprisoned you. Trading will force you to confront this historical conditioning if you are to become successful in trading. Changing this historical conditioning is another matter, for it is hard wired into the neuro-circuitry that is inseparable from your thinking and perception. We will be looking into the re-invention of the self later in the book. So hold on.
The point of this discussion is to help you understand how you got “stuck” in a particular way of seeing the world that you accept as “the way it is”. The truth is that you have been wired biologically to see the world through a particular framework that increased the probability of your survival. That biology of self (the perceptual map of the brain) creates the mind. The mind emerges from the brain. They cannot be separated. It is this bio-cognitive trap that you will need to deconstruct in order to build a new way of seeing and perceiving the world.
The biology that you are is organized primarily around fear and the motivation to survive. Until you become mindful of the way your brain has shaped your mind to per-ceive, you stay “trapped” in this perception and are blind to your limitations – this is called mindlessness. In this book you will be learning how to de-construct the confluence of the history of possibility and perception that causes you to see the world you automatically see and to believe what you believe (without examination) about yourself, the mar-ket, and the world.
What does this look like in trading?
Let’s examine how a master trader interprets the market and himself as a preparation to observe and act successfully in the market.
I separate the notion of reality from beliefs. However, beliefs are those things that I choose to rely on. I have consciously changed my beliefs in my life. My reality, on the other hand, is that part that is neurologically wired in me. I know this may sound like semantics, but it isn’t. In my e-mail (this is part of his instruction to a group of his trading students), I specifically tried to highlight the fact that I was “choosing” these beliefs (more about this in a minute). For example, I choose to use a particular trading methodology. But that belief is not neurologically grounded in me. It is simply a framework in which I choose to view market structure. I readily admit that the “market” has no knowledge of the existence of that structure.
In my trading work, I have done many exercises of simply removing all indicators from my charts to purposely change my perception. I also studied Elliott Wave for a year which is also a structure in which to view the market, yet very different from DG. I made a choice of which structure I wanted to apply to the market. I didn’t choose a structure that I thought actually was the market.
This is very important to my mindset and ap-proach to the market. I am under the perception that all successful traders have adopted some sort of belief system about the markets. I also think that these traders would readily admit that their beliefs may not necessarily be shared by others. Yet, it doesn’t matter. It is what they “choose” to adopt.
Notice in this excerpt that the master trader “adopts” his beliefs by choice. He has had to reorganize his beliefs based on feedback from the markets. This is the opposite of cognitive dissonance in the majority of traders in the market, who resist feedback that would cause them to re-think the core beliefs that they have about themselves or the market. What do you “choose” to believe about the market? Most likely, if you are reading this book, you have not chosen the beliefs you hold about the market or about yourself. First you have to wake up from the Mindlessness of not observing the thoughts, beliefs, and expectations that have congealed into conversations in your mind. Until that time you will always run into the wall and feel the pain. Wrestling your beliefs from the history that became embedded into you is exactly what this master trader has done.