Three Trading Personalities

Dominant Trader Dominant personalities want to be in control.

They analyze everything, looking for signs of weakness they can

exploit. They are intensely competitive and must win at all costs.

Business, golf, even parties are a contest. They need to make lots of

money, have the best golf score, and be the center of attention at

parties. They think of life as a vertical arrangement with themselves

being at or near the top of the order. Most dominant personalities

are status conscious. They are ambitious, tough, aggressive, manipulative,

somewhat closed minded and insensitive. To them life is a

contest that has winners and losers, and they can't afford to think

about abstract subjects like other people's feelings. This would distract

them from the only thing that matters to them: winning. Dominant

traders deny their own tender emotions, and denying these emotions prevents them from controlling their effects. They refuse

to admit they have weaknesses, need affection, and have certain

dependency needs. They dislike these aspects of their personality

so much that they overreact and behave tougher than they really

are. Because winning is so important, extremely dominant people

will do whatever it takes to win. Because they will do anything to

win, they assume others will do the same. As a result, they distrust

others.

Dominant personalities are independent and individualistic.

Taking orders, accepting advice, or following the rules are seen as

weaknesses. They insist on doing things their way and will break

the rules to do so. They are afraid of losing, of showing weakness,

and of admitting their fears. They overreact and become excessively

dominant. A dominant personality will display nonverbal

signs of communication, such as clenched fists and jabbing motions

with a finger, pencil, or pen. A dominant personality tends to be

very short tempered, raising his or her voice and becoming redfaced

and angry. The anger and nonverbal communication are used

in an attempt to dominate you. These people want and need to be in

control, and the one thing over which they have no control is the

market. This frustrates and confounds them. They yell and scream,

yet the market pays no attention to their raving. The market ignores

their roar, which frustrates them further.

Dominant personalities are impatient; they want you to get to

the point right away. They feel they know what you need and don't

have any qualms about telling you so. They tend to dominate conversation

by talking faster and louder than the person with whom

they are talking. Dominant traders never admit to being wrong without

blaming some external circumstance. They don't accept the fact

that they may have made a mistake or error, because doing so would

be admitting to weakness, and a dominant personality would rather

submit to a root canal than to say, "I was wrong."

Dominant traders are quick to become frustrated when their

routines are disturbed or when changes occur that they have not

agreed to. They like a controlled environment in which they set the

rules. This is why they react so strongly to the market. Dominant

personalities are poor listeners. They frequently interrupt conver180

the strategic electronic day trader

sations and don't like being asked the same question over again. "I

just told you," or, "Weren't you listening?" are their responses. They

tend to be insensitive on the surface and uncomfortable with emotional

subjects. Even though they are repelled by emotion in others,

they can't see their own emotional reactions. This is because they

don't want to face their real fear: an acknowledgment of emotions,

which they see as a flaw in their personality. To become a biomechanical

trader, all of us have to face our fears and understand ourselves.

Detached Trader A detached personality tends to put off dealing

with a problem, hoping that if he or she ignores the problem it will

go away. These types don't like confrontation and will avoid it

rather than face it. Detached personalities have a fear of intimacy,

dependency, and the uncertain and unpredictable. They tend to

want to live in their own world, a world of rational thinking. They

are more comfortable with machines, ideas, or numbers than with

people. Drawn to order and predictability, their homes and checkbooks

are in perfect order. Their desks or work areas may appear to

be in disarray to an outsider, but it is organized confusion. The

detached personality knows where everything is. Don't change anything

on their desks because if you do they become severely upset.

Minor deviations from their customary routines upset them. They

suppress their own emotions and ignore other people's. They tend

to be shy and aloof, putting up mental barriers to others and to

their own success. They tend not to want to get too close or personally

involved, fearing rejection.

Detached personalities are independent, yet readily accept

authority, rules, and procedures, though they avoid people who

attempt to control them. They are open-minded about impersonal

issues and pride themselves on their objectivity. When confronted

on a issue or opinion, they do not usually respond angrily. They

look at the facts objectively and will change positions if the facts

require it. They are thorough and are good listeners. They understand

the unspoken personal boundaries of others.

The detached personality can't get enough facts. They overemphasize

analysis and have to understand every single detail before they buy or sell. They think in logic and numbers and deal in facts.

Detached trader personalities are good at solving problems that

deal with logic. The detached trader is a rational thinker and thus

goal oriented. He or she uses facts and logic to decide on an appropriate

course of action to reach the goal. Unfortunately, the market

isn't always logical. This confounds the detached personality

because when something doesn't work, he or she tries to make it

work based on logic and rational thinking. A detached personality

may design a complex trading system but find it hard to trade that

system because of his or her inner battle with risk and the fear of

losing.

Detached personalities live by facts, logic, and laws (natural

and human). They tend to seek order and are repulsed by the

absence of it. Sometimes you can't find answers with logic and numbers.

You may have to accept something on faith. This is almost

more than a detached personality can stand because in their world

everything is quantifiable.

Dependent Traders The dependent personality is very social, wants

to be liked, and needs the acceptance, understanding, and approval

of others. These types are warm, friendly, and interested in people.

They tend to be good listeners and are sensitive to other people's

needs. Cooperative and compliant, they go along with other people's

ideas because they don't want to elicit confrontation or anger.

They are givers who want to help people, especially those who

reward them with gratitude and affection.

Dependent personalities are very popular. However, they can

be extremely insecure and needy of reassurance. Their demands

can become so exhausting that people withdraw from them. This

increases their insecurity. Dependent personalities are afraid of

being alone, of rejection, and of conflict. Jealousy can be a serious

problem for dependent personalities.

Dependent personalities will defy authority if they consider

the authority to be unfeeling and unjust. They think and act impulsively.

They are far more likely to place a trade out of impulse than

out of any analysis. They have a feeling of integrity and they understand

people. In fact, dependent personalities tend to be very empa182

the strategic electronic day trader

thetic of the problems of others. The words feeling and understanding

are very much a part of who they see themselves to be.

Dependent personalities have an even greater fear of rejection

than the detached trader, which makes them extremely risk conscious.

You would think that given this fear of risk the dependent

trader would be conservative, but this is not the case. Dependent

traders are drawn to the market because they are attracted to danger.

They are likely to have compulsive behaviors. They gather lots

of information but don't assimilate it well. In most cases, the dependent

personalities have problems with numbers and read slowly.

Their comprehension and focus is poor because they are easily distracted.

To compensate, dependent personalities are on an endless

search for the best trading system or the next new software. Ironically,

they tend to rely on personal verbal information and are usually

looking for hot tips. Dependent personalities would rather talk

about trading at a party than trade. They are attracted by social

interaction and the rush they feel when they trade.

Use this information to better understand yourself. You can

improve only by facing and accepting the truth about your nature.

Biomechanical traders use this information to improve on their

strengths and minimize their weaknesses. Recognizing your shortcomings

is the first step to making them strengths.

Negative Psychological Characteristics of Traders

Now let's take a look at some of the factors that could negatively

impact your trading. Forewarned is forearmed!

Foolishly Cheap Do you really think it is smart to put $25,000 into

an investment or trade without knowing what you are doing? Of

course not, but you would be amazed at the number of people who

won't spend $2,000 or $3,000 on an education because they think it

is too much. These same people end up losing $20,000 that could

have been avoided simply by spending $2,000, which doesn't seem

very intelligent to me. Oddly, intelligence doesn't have anything to

do with it. This is a psychological characteristic that many people

have—and one that can cost you everything. Never think you are

saving money by being foolishly cheap. You need tools, education, and software to be a success in the business of trading. Success

doesn't usually go to the lowest bidder. If someone offers to sell you

a diamond ring for a dime and you buy it, chances are that you just

bought a diamond ring that isn't worth a dime.

Using this same philosophy to buy stock is doomed to failure.

Buying or selling stock should have nothing to do with price. You buy

or sell based on facts, both fundamental and technical. If you are

undercapitalized you should not be trading. Individuals who are

undercapitalized seek out cheap stocks. Stocks that are under $15

may have liquidity problems. Remember, cheap stocks can go to zero.

Quality, on the other hand, may go down but it rarely goes to zero.

Never let price be a factor in your buying and selling decisions.

If you are planning to trade electronically, you are going to need a

minimum of $50,000 to $100,000. Electronic trading is no place for

the foolishly cheap.

Instant Gratification Our society has become programmed for

instant gratification. An impatience has seized our culture. We are

no longer willing to wait—we want it and we want it now! Whole

technologies have grown up around our insatiable appetite for

faster results. We see it everywhere: one-hour photos, one-hour dry

cleaning, and fast food. All around us are advertisements for the

fastest modem or the fastest data delivery service. Any way you

look at it, America is in a hurry. So let's all jump in our fast cars,

buckle our safety belts, and get in the fast lane, because we all want

to make money fast, don't we? This is one of the most destructive

personality flaws an individual can have. The only thing you are

going to get in a hurry is in trouble and broke. Electronic trading is

a magnet that attracts individuals who are looking for answers in

the box and want to make money fast. "Yep, step right up ladies and

gentleman. Today—and today only—I have the answer for you in

this attractive yet versatile box. It can buy on the bid and sell on the

ask, and it can make money fast. Be the first in your neighborhood

to lose money at the speed of light. You have done it the slow way—

now do it the new improved fast way. Ladies and gentleman, with

just a few clicks of the mouse you can leave behind the days of

secure, boring financial independence and experience the thrill you get when you roll the dice in Las Vegas—all from the comfort of your

own home or office."

Over many years of training traders and aggressive investors, I

have learned the one sure path to losing money is trying to trade

before you are ready. You need to know how to thoroughly analyze

a stock and the market before you jump into something as potentially

dangerous as trading electronically. You need to know how to

trade long before you start using this technology, and most people

do not. If you don't know what you are doing, the only thing electronic

trading gives you is the potential to lose money exponentially.

You must crawl before you walk and walk before you run. It is

just common sense that you need knowledge and experience to succeed

at anything.

I have witnessed firsthand people off the street trying to use

electronic trading technology without even knowing what a moving

average was or the most basic concepts of trend analysis. They did

seem to be having fun losing money—which is what 92 percent of

them will be doing, because they were shown only one method of

trading: scalping. Scalping is great for the electronic trading firm but

potentially dangerous for you. Typically, if you go back to that same

firm in three months, you will see all new faces. Losing money

wasn't so much fun after all. Slow down, get an impartial education,

and stop trying to cut to the front of the line. That line is the losers'

line, and there will always be space at the front.

Let's Get Rich Quick Just for fun, I recently attended one of those

get-rich-quick seminars. You know, the ones you hear about on

radio or TV that always include the phrase, "I made more money

than I did at my job." I now know that P. T. Barnum was right when

he said, "There is a sucker born every minute." It seems that in

America today people are grasping at anything that has any possibility

of making money, no matter how outlandish it sounds. Do not

mistake marketing for knowledge of the market. A rising stock market

has drawn people who held CDs just a few years ago and who

never before invested in stock. Now, these same people are trying to

make money trading, an endeavor that they are not psychologically

prepared for or trained to do. In their minds, the stock market always seems to go up. The thought of losing money never enters

their heads. Well, trading is not for the novice or inexperienced. As

I sat in this get-rich-quick stock seminar and looked around the

room, all I could think of was fresh food. No, I wasn't hungry, but the

market is a food chain in which the big, experienced fish devour

the fish of little experience. What I saw was a true feeding frenzy in

the making. Don't fall for get-rich-quick schemes, because if you do,

you could make some well-trained professional trading shark very

happy. The sweetest words a shark will ever hear are the words,

"Let's all get rich quick." It's like ringing the dinner bell.

People trying to get rich quick are usually gamblers, and characteristically

base their decisions on greed or financial desperation.

These emotions will distort your judgment and create huge losses

that will compound themselves. Your best chance of survival will be

in learning to trade like a professional trader. Professionals don't try

to break the bank and get rich quick. Professional traders know that

the shark who survives the day will be around to trade tomorrow. If

you try to get rich quick, you will only end up broke.

Ego Wall Street is paved with the bones of the traders who thought

they were smarter than the market. People with huge egos have little

chance of trading success. These people are usually the ones

who are pontificating about their analysis of the market and are

quick to anger when someone disagrees with them. They are always

right. Don't worry, you won't have to endure them very long,

because their big egos are going to attract big losses. The market

loves to take the money of individuals with big egos because their

money is the easiest to take. Being smarter than the market, they do

some things that are sometimes hard to believe. Many times, you

have to look twice at your screen because you just can't believe

what you are seeing. After all, who are you to argue with genius?

Just click that mouse and say, "Thank you very much."

Ego distorts rational thinking and causes people to take trades

and positions that are against trend, momentum, and logic. The

dominant personality is more likely to have a huge ego than is the

detached or dependent personality type. Don't mistake confidence

and experience with ego traders. Ego traders are trading out of emo186

the strategic electronic day trader

tional reactions or a knee-jerk response to an event. Ego traders

usually lack the skill of fluid traders, who adapt to changes in market

trend. Ego traders marry into a plan that is as fluid as cement

and stay with it even when the trend has changed. Why don't they

change? Because if they do they will have to admit to being wrong,

and they would rather lose money than admit they could be wrong.

Education You go to school, gain an education, become employed,

or start your own business. You learn basic month-to-month money

management necessary to perform outside the arena of the stock

market. You have been trained from childhood to think and to analyze

problems, and this training and reflexive thinking cause many

traders to fail. Success in trading or aggressive investing requires

far more than formal education, computers, and software. Nothing

in your education or work experience will prepare you for the psychological

stresses that you will experience as aggressive investor

or trader. Ninety percent of your success depends on the proper

development of a trader's state of mind known as the alpha zone.

You are going to learn about a revolutionary new training and mental

conditioning system that will change the way you think about

trading. Increased awareness and understanding will help you begin

to prepare yourself to achieve the mental state necessary to enter

the alpha zone, the realm of the biomechanical trader. The impact

of this information will change your concept of trading from this

day forward. From now on, you will view trading from a physiological

and mental perspective. Let us examine the first step in becoming

a biomechanical trader.

Dominant Trader Dominant personalities want to be in control.

They analyze everything, looking for signs of weakness they can

exploit. They are intensely competitive and must win at all costs.

Business, golf, even parties are a contest. They need to make lots of

money, have the best golf score, and be the center of attention at

parties. They think of life as a vertical arrangement with themselves

being at or near the top of the order. Most dominant personalities

are status conscious. They are ambitious, tough, aggressive, manipulative,

somewhat closed minded and insensitive. To them life is a

contest that has winners and losers, and they can't afford to think

about abstract subjects like other people's feelings. This would distract

them from the only thing that matters to them: winning. Dominant

traders deny their own tender emotions, and denying these emotions prevents them from controlling their effects. They refuse

to admit they have weaknesses, need affection, and have certain

dependency needs. They dislike these aspects of their personality

so much that they overreact and behave tougher than they really

are. Because winning is so important, extremely dominant people

will do whatever it takes to win. Because they will do anything to

win, they assume others will do the same. As a result, they distrust

others.

Dominant personalities are independent and individualistic.

Taking orders, accepting advice, or following the rules are seen as

weaknesses. They insist on doing things their way and will break

the rules to do so. They are afraid of losing, of showing weakness,

and of admitting their fears. They overreact and become excessively

dominant. A dominant personality will display nonverbal

signs of communication, such as clenched fists and jabbing motions

with a finger, pencil, or pen. A dominant personality tends to be

very short tempered, raising his or her voice and becoming redfaced

and angry. The anger and nonverbal communication are used

in an attempt to dominate you. These people want and need to be in

control, and the one thing over which they have no control is the

market. This frustrates and confounds them. They yell and scream,

yet the market pays no attention to their raving. The market ignores

their roar, which frustrates them further.

Dominant personalities are impatient; they want you to get to

the point right away. They feel they know what you need and don't

have any qualms about telling you so. They tend to dominate conversation

by talking faster and louder than the person with whom

they are talking. Dominant traders never admit to being wrong without

blaming some external circumstance. They don't accept the fact

that they may have made a mistake or error, because doing so would

be admitting to weakness, and a dominant personality would rather

submit to a root canal than to say, "I was wrong."

Dominant traders are quick to become frustrated when their

routines are disturbed or when changes occur that they have not

agreed to. They like a controlled environment in which they set the

rules. This is why they react so strongly to the market. Dominant

personalities are poor listeners. They frequently interrupt conver180

the strategic electronic day trader

sations and don't like being asked the same question over again. "I

just told you," or, "Weren't you listening?" are their responses. They

tend to be insensitive on the surface and uncomfortable with emotional

subjects. Even though they are repelled by emotion in others,

they can't see their own emotional reactions. This is because they

don't want to face their real fear: an acknowledgment of emotions,

which they see as a flaw in their personality. To become a biomechanical

trader, all of us have to face our fears and understand ourselves.

Detached Trader A detached personality tends to put off dealing

with a problem, hoping that if he or she ignores the problem it will

go away. These types don't like confrontation and will avoid it

rather than face it. Detached personalities have a fear of intimacy,

dependency, and the uncertain and unpredictable. They tend to

want to live in their own world, a world of rational thinking. They

are more comfortable with machines, ideas, or numbers than with

people. Drawn to order and predictability, their homes and checkbooks

are in perfect order. Their desks or work areas may appear to

be in disarray to an outsider, but it is organized confusion. The

detached personality knows where everything is. Don't change anything

on their desks because if you do they become severely upset.

Minor deviations from their customary routines upset them. They

suppress their own emotions and ignore other people's. They tend

to be shy and aloof, putting up mental barriers to others and to

their own success. They tend not to want to get too close or personally

involved, fearing rejection.

Detached personalities are independent, yet readily accept

authority, rules, and procedures, though they avoid people who

attempt to control them. They are open-minded about impersonal

issues and pride themselves on their objectivity. When confronted

on a issue or opinion, they do not usually respond angrily. They

look at the facts objectively and will change positions if the facts

require it. They are thorough and are good listeners. They understand

the unspoken personal boundaries of others.

The detached personality can't get enough facts. They overemphasize

analysis and have to understand every single detail before they buy or sell. They think in logic and numbers and deal in facts.

Detached trader personalities are good at solving problems that

deal with logic. The detached trader is a rational thinker and thus

goal oriented. He or she uses facts and logic to decide on an appropriate

course of action to reach the goal. Unfortunately, the market

isn't always logical. This confounds the detached personality

because when something doesn't work, he or she tries to make it

work based on logic and rational thinking. A detached personality

may design a complex trading system but find it hard to trade that

system because of his or her inner battle with risk and the fear of

losing.

Detached personalities live by facts, logic, and laws (natural

and human). They tend to seek order and are repulsed by the

absence of it. Sometimes you can't find answers with logic and numbers.

You may have to accept something on faith. This is almost

more than a detached personality can stand because in their world

everything is quantifiable.

Dependent Traders The dependent personality is very social, wants

to be liked, and needs the acceptance, understanding, and approval

of others. These types are warm, friendly, and interested in people.

They tend to be good listeners and are sensitive to other people's

needs. Cooperative and compliant, they go along with other people's

ideas because they don't want to elicit confrontation or anger.

They are givers who want to help people, especially those who

reward them with gratitude and affection.

Dependent personalities are very popular. However, they can

be extremely insecure and needy of reassurance. Their demands

can become so exhausting that people withdraw from them. This

increases their insecurity. Dependent personalities are afraid of

being alone, of rejection, and of conflict. Jealousy can be a serious

problem for dependent personalities.

Dependent personalities will defy authority if they consider

the authority to be unfeeling and unjust. They think and act impulsively.

They are far more likely to place a trade out of impulse than

out of any analysis. They have a feeling of integrity and they understand

people. In fact, dependent personalities tend to be very empa182

the strategic electronic day trader

thetic of the problems of others. The words feeling and understanding

are very much a part of who they see themselves to be.

Dependent personalities have an even greater fear of rejection

than the detached trader, which makes them extremely risk conscious.

You would think that given this fear of risk the dependent

trader would be conservative, but this is not the case. Dependent

traders are drawn to the market because they are attracted to danger.

They are likely to have compulsive behaviors. They gather lots

of information but don't assimilate it well. In most cases, the dependent

personalities have problems with numbers and read slowly.

Their comprehension and focus is poor because they are easily distracted.

To compensate, dependent personalities are on an endless

search for the best trading system or the next new software. Ironically,

they tend to rely on personal verbal information and are usually

looking for hot tips. Dependent personalities would rather talk

about trading at a party than trade. They are attracted by social

interaction and the rush they feel when they trade.

Use this information to better understand yourself. You can

improve only by facing and accepting the truth about your nature.

Biomechanical traders use this information to improve on their

strengths and minimize their weaknesses. Recognizing your shortcomings

is the first step to making them strengths.

Negative Psychological Characteristics of Traders

Now let's take a look at some of the factors that could negatively

impact your trading. Forewarned is forearmed!

Foolishly Cheap Do you really think it is smart to put $25,000 into

an investment or trade without knowing what you are doing? Of

course not, but you would be amazed at the number of people who

won't spend $2,000 or $3,000 on an education because they think it

is too much. These same people end up losing $20,000 that could

have been avoided simply by spending $2,000, which doesn't seem

very intelligent to me. Oddly, intelligence doesn't have anything to

do with it. This is a psychological characteristic that many people

have—and one that can cost you everything. Never think you are

saving money by being foolishly cheap. You need tools, education, and software to be a success in the business of trading. Success

doesn't usually go to the lowest bidder. If someone offers to sell you

a diamond ring for a dime and you buy it, chances are that you just

bought a diamond ring that isn't worth a dime.

Using this same philosophy to buy stock is doomed to failure.

Buying or selling stock should have nothing to do with price. You buy

or sell based on facts, both fundamental and technical. If you are

undercapitalized you should not be trading. Individuals who are

undercapitalized seek out cheap stocks. Stocks that are under $15

may have liquidity problems. Remember, cheap stocks can go to zero.

Quality, on the other hand, may go down but it rarely goes to zero.

Never let price be a factor in your buying and selling decisions.

If you are planning to trade electronically, you are going to need a

minimum of $50,000 to $100,000. Electronic trading is no place for

the foolishly cheap.

Instant Gratification Our society has become programmed for

instant gratification. An impatience has seized our culture. We are

no longer willing to wait—we want it and we want it now! Whole

technologies have grown up around our insatiable appetite for

faster results. We see it everywhere: one-hour photos, one-hour dry

cleaning, and fast food. All around us are advertisements for the

fastest modem or the fastest data delivery service. Any way you

look at it, America is in a hurry. So let's all jump in our fast cars,

buckle our safety belts, and get in the fast lane, because we all want

to make money fast, don't we? This is one of the most destructive

personality flaws an individual can have. The only thing you are

going to get in a hurry is in trouble and broke. Electronic trading is

a magnet that attracts individuals who are looking for answers in

the box and want to make money fast. "Yep, step right up ladies and

gentleman. Today—and today only—I have the answer for you in

this attractive yet versatile box. It can buy on the bid and sell on the

ask, and it can make money fast. Be the first in your neighborhood

to lose money at the speed of light. You have done it the slow way—

now do it the new improved fast way. Ladies and gentleman, with

just a few clicks of the mouse you can leave behind the days of

secure, boring financial independence and experience the thrill you get when you roll the dice in Las Vegas—all from the comfort of your

own home or office."

Over many years of training traders and aggressive investors, I

have learned the one sure path to losing money is trying to trade

before you are ready. You need to know how to thoroughly analyze

a stock and the market before you jump into something as potentially

dangerous as trading electronically. You need to know how to

trade long before you start using this technology, and most people

do not. If you don't know what you are doing, the only thing electronic

trading gives you is the potential to lose money exponentially.

You must crawl before you walk and walk before you run. It is

just common sense that you need knowledge and experience to succeed

at anything.

I have witnessed firsthand people off the street trying to use

electronic trading technology without even knowing what a moving

average was or the most basic concepts of trend analysis. They did

seem to be having fun losing money—which is what 92 percent of

them will be doing, because they were shown only one method of

trading: scalping. Scalping is great for the electronic trading firm but

potentially dangerous for you. Typically, if you go back to that same

firm in three months, you will see all new faces. Losing money

wasn't so much fun after all. Slow down, get an impartial education,

and stop trying to cut to the front of the line. That line is the losers'

line, and there will always be space at the front.

Let's Get Rich Quick Just for fun, I recently attended one of those

get-rich-quick seminars. You know, the ones you hear about on

radio or TV that always include the phrase, "I made more money

than I did at my job." I now know that P. T. Barnum was right when

he said, "There is a sucker born every minute." It seems that in

America today people are grasping at anything that has any possibility

of making money, no matter how outlandish it sounds. Do not

mistake marketing for knowledge of the market. A rising stock market

has drawn people who held CDs just a few years ago and who

never before invested in stock. Now, these same people are trying to

make money trading, an endeavor that they are not psychologically

prepared for or trained to do. In their minds, the stock market always seems to go up. The thought of losing money never enters

their heads. Well, trading is not for the novice or inexperienced. As

I sat in this get-rich-quick stock seminar and looked around the

room, all I could think of was fresh food. No, I wasn't hungry, but the

market is a food chain in which the big, experienced fish devour

the fish of little experience. What I saw was a true feeding frenzy in

the making. Don't fall for get-rich-quick schemes, because if you do,

you could make some well-trained professional trading shark very

happy. The sweetest words a shark will ever hear are the words,

"Let's all get rich quick." It's like ringing the dinner bell.

People trying to get rich quick are usually gamblers, and characteristically

base their decisions on greed or financial desperation.

These emotions will distort your judgment and create huge losses

that will compound themselves. Your best chance of survival will be

in learning to trade like a professional trader. Professionals don't try

to break the bank and get rich quick. Professional traders know that

the shark who survives the day will be around to trade tomorrow. If

you try to get rich quick, you will only end up broke.

Ego Wall Street is paved with the bones of the traders who thought

they were smarter than the market. People with huge egos have little

chance of trading success. These people are usually the ones

who are pontificating about their analysis of the market and are

quick to anger when someone disagrees with them. They are always

right. Don't worry, you won't have to endure them very long,

because their big egos are going to attract big losses. The market

loves to take the money of individuals with big egos because their

money is the easiest to take. Being smarter than the market, they do

some things that are sometimes hard to believe. Many times, you

have to look twice at your screen because you just can't believe

what you are seeing. After all, who are you to argue with genius?

Just click that mouse and say, "Thank you very much."

Ego distorts rational thinking and causes people to take trades

and positions that are against trend, momentum, and logic. The

dominant personality is more likely to have a huge ego than is the

detached or dependent personality type. Don't mistake confidence

and experience with ego traders. Ego traders are trading out of emo186

the strategic electronic day trader

tional reactions or a knee-jerk response to an event. Ego traders

usually lack the skill of fluid traders, who adapt to changes in market

trend. Ego traders marry into a plan that is as fluid as cement

and stay with it even when the trend has changed. Why don't they

change? Because if they do they will have to admit to being wrong,

and they would rather lose money than admit they could be wrong.

Education You go to school, gain an education, become employed,

or start your own business. You learn basic month-to-month money

management necessary to perform outside the arena of the stock

market. You have been trained from childhood to think and to analyze

problems, and this training and reflexive thinking cause many

traders to fail. Success in trading or aggressive investing requires

far more than formal education, computers, and software. Nothing

in your education or work experience will prepare you for the psychological

stresses that you will experience as aggressive investor

or trader. Ninety percent of your success depends on the proper

development of a trader's state of mind known as the alpha zone.

You are going to learn about a revolutionary new training and mental

conditioning system that will change the way you think about

trading. Increased awareness and understanding will help you begin

to prepare yourself to achieve the mental state necessary to enter

the alpha zone, the realm of the biomechanical trader. The impact

of this information will change your concept of trading from this

day forward. From now on, you will view trading from a physiological

and mental perspective. Let us examine the first step in becoming

a biomechanical trader.