First, let me define a belief from my perspective. A belief is a feeling or concept, within any individual, about some future outcome, based on past experiences or memories. We all have past experiences from early childhood, all the way up to 5 minutes ago, that shape our beliefs about the future. From a personal point of view, we have beliefs about things external to trading such as, sanctity of marriage, killing is wrong, stealing is wrong, sharing is good, etc.

We learned certain beliefs about the way of living. The harder we work, the more effort we put in, the more money and reward we will make. The less we work, the less money we will make. The guy that works three jobs, will make more than the bum on the couch. In trading, this is not so. It takes virtually no effort to trade stocks. Anyone can buy and sell stocks, having winners and losers, with no effort at all. If you don't believe this, tell your 5 year old to press your buttons for you. They may ask when or how, but once learned, with no effort, they would buy and sell stocks with no reason or thought. Some of those trades would make money, some would not. You can see that in this example, on a winning trade, was it because the 5 year old thought through the TA lines and pivot points? No.

I started actively trading in 1997. It was a fairly strong bull market. It was easy to blow stops and still have most of them come back to make me whole. The tech sector was on fire. I could put on trades one day, take my daughter’s to the pool, come back and see where I was. I had no bad experiences. Nothing of a stock that was down, was down for too long, and eventually came back to make me profitable. I was creating a belief that all I had to do was, buy and hold. This is just so easy. Then in 1998, I was awaken to a margin call. This negative experience distorted my view that "trading was just so easy". With the same momentum of my portfolio to the upside, it crashed to the downside. It was at this moment, that I had to create a different belief and it was one I "chose" to change. I had to learn about deeper issues of market functions and eventually about trading psychology. Evidently, the game wasn't just buy, hold and hope. The market would find a way to take the money from those that traded in this fashion. And it cleared many out unfortunately last year that thought just like this. So what does my belief about trading entail now? Trading is a game that includes a funny circle.

• I started, making money with no effort.
• I continued, lost money with no effort (it doesn't take any effort to not press sell button)
• I continued, learning all I could about the market and myself (considerable effort)
• I am here now, trading again with basically minimal "effort".

The next major belief is "trading systems". We have seen so many out there, numerous texts on the subjects and I'm sure many more to come. "If I can just find the right system, trading will be piece of cake". We know this to be false, as everyone's system doesn't yield consistent winners from individual to individual. One trader makes more money than the other or doesn't make money at all. The system is the same, why are the profits different? Trading again is about you and the market is just a reflection of who you are at any given moment.

Let's go a bit deeper. The market moves up and down, as aggregate shifts of demand and supply lean to one side or the other. This happens at all kinds of price levels. This basis for movement is what we as traders try to define and profit from. Some see it on a tape reading platform, some TA, and some don't on anything (they make it up as they go). When I first brought up a chart of a stock, I saw a hill. I didn't see support/resistance. I didn't see capitulation events. I didn't see euphoric events. I didn't see accumulations. I saw a hill. Why? Becasue there was nothing from previous experience to tell me what that hill meant, what moves within that hill were made up of. I even went so far as to send my father a chart, detailing points of highs and lows saying,

"I'll buy here, and sell there, when I sell there, you short and cover at the low. Then I'll buy again, we'll make a killing."

I saw many others making money on their posts, so figured it had to be working, and "I" was just not figuring it out yet. My belief was the trading system was infallible, but I was not making it work right. Thankfully, at this point in my trading, Vadym began to buzz in my ear a bit more about personal accountability, seeing things at deeper levels, trading based on what is seen, not thought, etc. My beliefs began to change, not so much about the system, but about my place in it. I went from thinking "the system works, I suck" to "the system is just a system, I need to find out what in me won't allow it to work" You have to realize that anyone's trading system, no matter what "potential" it offers on any given day, week, month, is normally not realized by individual traders. You see trade performance for a week at +20 points. This assumes you trade every single trade, stop out at best price all the time, get in at best price all the time and sell at best prices all the time. Impossible.

Those who think that the market provides profit and loss are in my mind, mistaken. You, yourself, your choices decide this. To let the market dictate your profit and loss to any degree outside your parameters, you lose control of your trading. The market is neutral. It will go up and down regardless of your position. It doesn't know who you are, nor does it care. It goes up, making emotional longs happy and emotional shorts unhappy. Vice versa with shorts. I added "emotional" because I will discuss emotion a touch later. The idea here is that you, at this very moment, have some feeling within you about yourself, your trading. Either you made money this morning and are anxious to trade again, as you are confident or you didn't make money and are frustrated, ready to give up today. Or, you might be profitable and willing to rest this afternoon, or you lost money and are ready for revenge this afternoon. "I'll show this stupid market for taking my money".

I make my choices and after I make my choice, the market does whatever it wants, like it always does.

Many might think, "but if the market does what it does, and hits my stop or profit target, then how do I still have control?" The market moved to make me money or lose my money. You still have to hit the exit button right? How many times early on did we have a great profit, only to turn it to a loss? How many times did we have a small loss turned into a larger one? Even now, I still struggle with what I envision to happen, versus what I just did.

If the market can not hurt us, why is it that we feel other's opinions of stock movement can? How many times early in our trading do we enter a stock, someone says, market is moving in opposite direction, so we exit immediately? IF you have resolved to make a choice in entering that trade, knowing that market can not hurt you outside of your predefined risks, then how is it that one statement from someone you know can make you change your belief so fast? How many times are Vadym and I wrong? How many times does "x" person read the market wrong How many times do analysts downgrade the lows and upgrade the highs. You have to change your belief that other's opinions dictate stock movement to any great degree. Other's opinions are to define areas of interest. Reversal points, breakout points, breakdown points, range points, etc. Where I trade for 3/8 point, Vadym may hold for 1 point. The pivot was the same, the entry maybe different. But in the point I exit at 3/8, Vadym thinks I 'Know' something that he does not? When you do this, you lost control.

I'm long 'x' stock, and someone says, this stock looks weak, I'm shorting it. So I exit my long because I think he knows something that I don't? Nonsense, he just has a different perception. This guy just went short because why? Because something in the tape, something on the chart, something within him says, time to go short. This folks, is what makes the market work. Different beliefs about price action. If you begin to believe everyone else's, not trusting in your own, you will never progress into a successful trader. If you feel that "one guy's" contrary position creates a negativity in your position, unless this guy has millions, it's an argument that needs rectified.

The belief of one comment or one action by another individual dictates your view of the trade, needs to change to: "I believe in my perception of the trade, either the market does what it does allowing me profit, which I'll take, or it will create a small loss, which I'll take".

Market Outcomes are Uncertain. Creating Certainties is Not the Key To Success.

Last belief that I think is most important: Creating certainties will lead to my success. How many traders pour through endless charts/books/seminars/trade shows/etc., only to not trade 6 months later? The more I learn, the better I will do? The more I know, the greater my pool of resources will become.

Let me ask you this:

Trader A...#1 ranked Market Analyst in the world. Fears losing money. Never traded his own account.

Trader B...High school diploma, trusts himself to do the right thing, accountable for his actions. Willing to learn what he needs to succeed, but isn't quite there yet.

You have 10K to give Trader A or B. I'd give mine to B, who would you choose?

Trader A, knows all there is to know, but can't make a dime. Trader B, willing to learn and is accountable for his trading. To me, B has a much greater chance to profit my 10K on active trading. The major point is this. The more you know, yes, this is much better than being ignorant about the markets. Creating certainties, in the sense that, "this outcome has to happen", is not what we are after. We are about putting the odds in our favor, having an unemotional approach to taking the opportunities before us. If we want certainty, we won't find it in the market. We've already defined the market as uncertain, moving how it does based on factors of aggregate supply and demand. There is no way we could know from moment to moment, knowing when these shifts outweigh each other, offering us more or less profit on each tick.

You must shift your belief that if "I know everything there is to know about the market, I will succeed" to, "I will learn all I can about the market, but still realize that I have to know and trust myself, when signals present themselves."