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Your Game Plan is Useless Without Knowledge

Discussion in 'Forex Discussions' started by painofhell, Aug 9, 2016.

  1. painofhell

    painofhell Content Contributor

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    In this "information-is-power" age, you need knowledge and skill to succeed at any goal. There is a tremendous amount of Fundamental and Technical minutia involved in successful equity, futures and currency trading. However, getting that knowledge can be a daunting task. Also, your attitude regarding your internal stories about your ability to learn and assimilate knowledge can be either helpful or harmful to the process. Often, you become your own worst enemy due to those internal stories. For instance, you determine what you need to learn and to do; then you play the story in your head about how difficult it's going to be, or how you "flubbed" it up the last time you tried it. This type of internal story is called a "negative feedback loop." In many cases, a negative feedback loop can disrupt and dislodge your ability to learn and stay on the learning course.

    Negative feedback loops most often are established in childhood and built upon the negative messages you received from authority figures, family and peers regarding your performance or worthiness. These negative loops go off like recorded messages that have been playing and replaying in your thoughts since very early ages — phrases like, "You can't do that," "You'll never make it," "You dummy," “You'll never amount to anything,” and other types of abuse. Statements like these are hurtful even as an adult, and may have left you with low self-esteem, a poor self-image and, in some cases, self-hatred. If you've swallowed these labels whole, they can't be digested. They remain stuck, deep in the psyche, leaving you frozen at that point in your childhood development with the same logic and reasoning abilities of a child at that age. Consequently, you react automatically when the stifled part of your personality is activated by events – like a bad trade - pushing the button on your recorder. However, with self-knowledge and learning how to successfully handle the circumstantial triggers when they surface, your self-image is lifted and the process of breaking the old negative loops has begun. As an example, most people wouldn't try to run a marathon without the appropriate preparation; it's a foolish thing to attempt. If you really want to do it, you will greatly increase the probability of success if you build up to it by running a little at a time, maybe a half-mile at first, then a mile, 3 miles, 5, then 10, 20, and so on. You also gain knowledge of how to train, and learn the importance of good nutrition. In other words, small steps build small but ever-increasing capacity and self-confidence while expanding strength and know-how. With each new item learned, and with each win in a trading demo account, this activity serves to support the effort to take that next small step and fuels the desire to take another.

    A famous 1968 psychological study entitled, "Pygmalion in the Classroom" by Robert Rosenthal and Lenore Jacobson, was done with two sets of children, one labeled "gifted" and the other labeled "slow" (only for purposes of the study). Those labeled as gifted were told that their potential was unlimited; those labeled as slow were left to their own devices. As you might imagine, even though the labeling was completely arbitrary, the 'gifted' children excelled, while the 'slow' children lived down to the expectations. Success breeds success, no matter how small, and breaks negative loops with positive achievements.

    An Approach to Learning New Skills and Abilities
    Identify the skills and knowledge you need by asking, "Will I succeed without this skill or knowledge?" In this way, you will begin to develop the parameter of what you "need to know." This helps make the process logical and easy to follow with one step after the other, and prevents you from cluttering your mind with unnecessary information.

    After you have identified what you need to know, design a flow chart or mind map; i.e., “a visual knowledge plan” with a start box and a finish box, outlining things to learn at the same time in linear boxes (one under the other) and those that come one after another in horizontal boxes. For example, if by asking questions you determine that you want to be an options trader, you would identify what knowledge is necessary to become a successful options trader. You would then chart out the visual knowledge plan, with the first box entitled Stock Trading and subsequent boxes in a column below you would include fundamental analysis, basic technical analysis and so on. At the top of another column, you might have a box entitled Options Trading and below this box, items to learn like puts/calls, strike price, the Greeks, historical and implied volatility and so on. Then moving toward the final box in the title row being, Options Trader.

    None of this is any use, however, unless you believe that you can learn. Negative belief loops established false assumptions about subjects you may have the aptitude for, but not the attitude; things like math, etc., which you "just know" you can't learn. Why? Because that's the way it happened in school at a very early age. Einstein did poorly in elementary school and flunked college math; however, he had a dream and vision of what he wanted to do, which drove him to learn math in order to explain his vision to others. Dr. Mimen, known as the father of the laser and widely accepted as a genius, flunked his Ph.D. orals and had to retake them. Learning did not come easy for him.

    Attitude is 90% of success. Rod Carew, the great former baseball player and coach, did not make his high school baseball team; his coach thought he wasn't good enough. But, through thousands of hours of practice, he became a professional player and went on to win seven batting championships and became one of the few players who achieved over 3000 hits in his career. Don King, who as a youth wanted to become a lawyer, became a numbers bookmaker instead and went to prison for manslaughter. While in prison, he read literature and philosophy and made the decision to rehabilitate himself. Through correspondence courses, he maintained an A average at Ohio University and went on to promote charity boxing after his release. Soon after he convinced Mohammad Ali to put on a charity match in Cleveland, he became a promoter and manager grossing several hundred million dollars and building an empire of televised boxing events. Malcolm Forbes, of Forbes Magazine, did not make the staff of his college newspaper. Les Brown, the famous motivational speaker, was told he would never amount to much; that he was dumb. He knew what he wanted and learned how to make speeches. Little by little, he acquired new knowledge and skill, and today commands several thousand dollars for a one-hour speech, all paid in advance. With this same asset-based thinking, you can accomplish what you previously thought you could not as a trader as you identify your Visual Knowledge Plan and acquire the know-how necessary as you raise the belief in yourself. The negative feedback loop is broken through step-by-step accumulation and application of knowledge.

    The next thing to consider in this learning approach is Patience. Einstein once said: "...the more I learn, the more I realize I don't know, and the more I realize I don't know, the more I want to learn." Learning new knowledge and skills is a systematic step-by-step process, acquiring knowledge fragment-by-fragment and building little by little on a cellular level. It necessarily takes time and starts off feeling very slow. Excellence is based on seasoned learning and sticking to it over a period of time. It is no different with trading. The quick fix rarely works; you must create consistency in both acquiring new knowledge and applying that knowledge.
     
  2. Mistalee

    Mistalee New Member

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    Strategies are the most important aspects that is required for Trading with Forex. It would be beneficial for each and every Forex Trader to change it from time to time.
     
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