FUNDAMENTAL, TECHNICAL, OR MENTAL ANALYSIS?

• The problem with making trading decisions from a strictly fundamental perspective is the inherent difficulty of making money consistently using this approach.
• usually don’t have the slightest concept of the fundamental supply and demand factors that are supposed to affect prices.
• individuals develop behavior patterns, and a group of individuals, interacting with one another on a consistent basis, form collective behavior patterns. These behavior patterns are observable and quantifiable, and they repeat themselves with statistical reliability.
• keeps the trader focused on what the market is doing now in relation to what it has done in the past, instead of focusing on what the market should be doing based solely on what is logical and reasonable as determined by a mathematical model.
• technical approach opens up many more possibilities because it identifies how the same repeatable behavior patterns occur in every time frame—moment-
• huge gap between what you understand about the markets, and your ability to transform that knowledge into consistent profits or a steadily rising equity curve.
• There’s a big difference between predicting that something will happen in the market (and thinking about all the money you could have made) and the reality of actually getting into and out of trades.
• most of the time they are in a state of fear, anger, frustration, anxiety, disappointment, betrayal, and regret.
• most of the industry’s best market analysts are the worst traders imaginable. Intelligence and good market analysis can certainly contribute to success, but they are not the defining factors that separate the consistent winners from everyone else.
• If I had to distill all of the reasons down to one, I would simply say that the best traders think
• differently from the rest.
• At some point, everyone who trades learns something about the markets that will indicate when opportunities exist. But learning how to identify an opportunity to buy or sell does not mean that you have learned to think like a trader.
• winners have attained a mind-set—a unique set of attitudes—that allows them to remain disciplined, focused, and, above all, confident in spite of the adverse conditions.
• Everyone who trades ends up learning something about the markets; very few people who trade ever learn the attitudes that are absolutely essential to becoming a consistent winner.
• trading is chock full of paradoxes and contradictions in thinking that make it extremely difficult to learn how to be successful.
• many of the perspectives, attitudes, and principles that would otherwise make perfect sense and work quite well in our daily lives have the opposite effect in the trading environment.
• In other words, all trades are risky because the outcomes are probable—not guaranteed. But do most traders really believe they are taking a risk when they put on a trade? Have they really accepted that the trade has a non-guaranteed, probable outcome? Furthermore, have they fully accepted the possible consequences? The answer is, unequivocally, no!
• When you fully accept the risks, it will have profound implications on your bottom-line performance.
• the risks inherent in trading do not cause the best traders to lose their discipline, focus, or sense of confidence.
• Trying to avoid something that is unavoidable will have disastrous effects on your ability to trade successfully.
• How do we remain disciplined, focused, and confident in the face of constant uncertainty? When you have learned how to “think” like a trader, that’s exactly what you’ll be able to do.
• Learning to accept the risk is a trading skill—the most important skill you can learn.
• The best traders aren’t afraid. They aren’t afraid because they have developed attitudes that give them the greatest degree of mental flexibility to flow in and out of trades based on what the market is telling them about the possibilities from its perspective.
• Ninety-five percent of the trading errors you are likely to make—causing the money to just evaporate before your eyes—will stem from your attitudes about being wrong, losing money, missing out, and leaving money on the table. What I call the four primary trading fears.
• When you are fearful, no other possibilities exist. You can’t perceive other possibilities or act on them properly, even if you did manage to perceive them, because fear is immobilizing.
• Unless you learn to completely accept the possibility of an uncertain outcome, you will try either consciously or unconsciously to avoid any possibility you define as painful. In the process, you will subject yourself to any number of self-generated, costly errors.
• market analysis is not the path to consistent results. It will not solve the trading problems created by lack of confidence, lack of discipline, or improper focus.
• It will feel like you can’t trust the markets; but the reality is, you can’t trust yourself. Confidence and fear are contradictory states of mind that both stem from our beliefs and attitudes. To be confident, functioning in an environment where you can easily lose more than you intend to risk, requires absolute trust in yourself.
• trained your mind to override your natural inclination to think in ways that are counterproductive to being a consistently successful trader.
• As long as you are susceptible to the kinds of errors that are the result of rationalizing, justifying, hesitating, hoping, and jumping the gun, you will not be able to trust yourself.
• adjust your attitudes and beliefs about trading in such a way that you can trade without the slightest bit of fear, but at the same time keep a framework in place that does not allow you to become reckless.
• Many of the new ways in which you will learn to express yourself will be in direct conflict with ideas and beliefs you presently hold about the nature of trading.
• Your willingness to consider that other possibilities exist—possibilities that you may not be aware of or may not have given enough consideration to—will obviously make the learning process faster and easier.