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Jay Norris
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Jay Norris is a 20-year CBOT floor veteran, author of the Best Seller "The Secret to Trading Forex, Futures, and ETFs: Risk Tolerance Threshold Theory", "Mastering the Currency Market", McGraw-Hill, 2009, and "Mastering Trade Selection and Management", McGraw-Hill,... More
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The Secret to Trading Forex, Futures, and ETF's: Risk Tolerance Threshold
  • We Are Not Naturally Wired To Trade 1 comment
    Jun 14, 2013 5:43 PM

    Acquiring a trader's mind-set takes training because the brain is not naturally wired to trade, just as the brain is not naturally wired to deal with excess. Because of this we are all naturally at a mental and physical disadvantage when it comes to trading. This has a great deal to do with how we subconsciously view the possibility of accessing an endless flow of money that successful trading can provide. When you first found out about the existence as such a thing as trading you had the same rush that an addict feels when he sees his drug of choice. Oh you can tell us all different, but deep down you know what being able to make money any time you want with a couple of mouse strokes really means to you. And from that point on, you are on a slippery slope. We have very little experience from a historic standpoint with excess and the addiction it can cause. As our brain and bodies evolved there never was much consideration for anything other than food and shelter. We certainly knew temptation from a historic perspective. We got good at recognizing it, which was the key to controlling it. For most of us our family, or society, or even ourselves keep us in check. Take an addict; he can fight his affliction once he recognizes it. He also knows that if he does not oppose it he will lose the support of those nearest to him.

    When it comes to lust for money through trading however, most of us don't even know there is an underlying danger. And we certainly would not see it as something our family, or our materialistic society would look down on. People in the 40's and 50's did not understand the dangers of cigarettes, and people in the 60's and 70's did not comprehend the dangers of recreational drugs, and people today don't see the dangers of excessive coffee drinking, because the brain was not originally programmed to make the connection that a momentary pleasure could cause long-term damage. Nature would never do that to us.

    It is very natural for all of us to pursue something that makes us feel good, add in money and you have got the most powerful arousal of all. I never saw any sense in gambling. It's pure chance. While growing up we did a lot of poker playing. It made very little sense to me to stay up till the sun rose, playing cards in a basement with a group of guys, but that's what our crew did. I never lost or made a lot because I understood that if I bet small when I had a bad hand and bet big with a good hand that I would stay in the game until the luck came my way. I also came to realize that there are people who believe they are lucky, and those that believe they are smarter than everyone else. I saw that some of the crew took the whole poker thing way too serious. It was not just money with them; it was them needing to feel superior. And at 15 or 16 years of age that's normal. Reality is still a long ways off. And those were good lessons learned about money and tolerance of others. We did not know it but we were being programmed for the future.

    Proper programming, as you can imagine is very important. Ideally it occurs naturally over the course of life. Proper programming for a trader is essential, as is knowing what's really at stake, which should be nothing other than trying to make a living like everyone else. Or, in the case of beginners, trying to supplement a living while protecting your trading capital.

    One of the most important things about trading is that you first understand that it is a dangerous dance. The first step to achieving a trader's mind-set is understanding that no matter how good your winning percentage is, the more you trade the more you will lose. You will get better as a trader but you will always have losers. And if you don't know it already losing can hurt more than winning can feel good which can lead to irrational behavior. A trader needs to always understand the risks first and that starts with focusing on his limitations, and not dreaming about the access. Making money feels good, and can be good for you too, but you will have to plan for it. And that means proper programming first.

    The good news is learning to trade in itself is often a difficult, drawn out process that strips us of our false ego, leaving us humbled, and very much aware of the faults of a presumptuous mind.

    Jay Norris is the best selling author of The Secret to Trading: Risk Tolerance Threshold Theory. To see Jay highlight trade set-ups and signals every Thursday and Monday go to Live Market Analysis.

    Trading involves risk of loss and is not suitable for all investors.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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  • "We Are Not Naturally Wired To Trade" FEDS & Banksters are always naturally wired to f. y. up, take y. money and run. Market is a .Gov Casino. If they cannot tax you, they'll take your money other ways. Gold. Gold. Gold otherwise crooks will take everything.
    14 Jun 2013, 07:13 PM Reply Like
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