Vol 5: How to make sound decisions

...continued from yesterday...

Earthlings at the present point of evolution cannot make sound decisions for reasons explained by Van Tharp in Volume 5 of the Peak Performance Course for Traders and Investors. Ironically, Vol 5 is entitled “How To Make Sound Decisions”.

Van advises that traders should use a system as a substitute for having to make trade-by-trade investment decisions. Unfortunately, most traders don’t know how to use a system. Van has discovered that to use a system effectively and consistently, the proper mental syntax should be as follows:
1. See the setup signal
2. Recognize that it is the one required by your system
3. Feel confident and convinced that you should act on it
4. Act on the signal

What traders do instead is sabotage their success by using a variation of the foregoing mental syntax that disables them from using their system. For example, after seeing the setup signal, they add an audio component such as “What could go wrong?” That prevents them from going into steps 2, 3, and 4.

Tomorrow, I’ll talk about what Van had to say about systems for trading.

...cont'd tomorrow...

Copyright 2007 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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