From Losing to Winning

This book is basically for traders who can't win for losing and for winning traders who want to improve their efficiency at winning. It is not for those individuals who have no interest in working through their power trips in relation to themselves, other people, and the market. If you are not willing to allow sweeping changes to occur in your life as a result of this material, you should not attempt the techniques described here in. Every trader is responsible for his or her own behavior. Part of maturation is the ability to draw the "honesty cards" about oneself to the forefront of awareness, in order to decide on a course of action. The consequences of immature judgment or of toying with trading can include psychosis, aggravation of neuroses, acceleration of disease processes, and suicide. On the other side, an awakening into certain states of consciousness can bestow gifts of such value that they are beyond price--and I do not mean only monetary profits.

The markets themselves are the most accurate and brilliant psychological mirrors in the world today. Trading can be the most naked and efficient psychotherapeutic growth program in which one could engage, if approached with an appropriate attitude. Here is a statement that many traders will hoot at: Making profits is not the most important reason for trading. Read well--I did not say unimportant, I said not the most important. To us, the primary reason for trading is the most important reason for doing anything: TO FIND OUT WHO YOU ARE.

That perspective makes all the difference. The intention of this book is not to please. Its purpose is to tilt you from the limited possibilities for experience that you now have. The material is offered to those who are ready to begin an awakening process--those who know at the deepest level of their awareness that they are ready for a change. Your desire to change your unfulfilling life and unsuccessful trading patterns into a state of consciousness is vital to your success. In this chapter, I want to deliver a truly believable message from a true believer in your trading and investing success. As you know, there are basically two kinds of traders: the successful ones, and everyone else. Michelangelo once pointed out that there are two ways of creating a statue. The first way is to create a statue from a piece of material.

The second and more masterful way is to see that the statue is already inside the material, and sculpting is merely a process of getting rid of the material that does not belong there. Another equally famous philosopher pointed out that there are two ways of becoming enlightened: (1) by building on your good qualities and (2) by eliminating what doesn't belong. Robert Frost wrote,"Two roads diverged in a wood,and I took the one less traveled by, and that has made all the difference." In this book, we are going to take a journey on a road less traveled by eliminating much that isn't true about trading. We are going to unravel some tangled ideas and win for a change. I want to share with you our truth about trading. Let me hasten to add that I am not much enamored by the concept of TRUTH. Actually I have very little interest in The TRUTH. I am much more interested in lies that work than I am in The TRUTH. The reason is: Truth (with a capital T) doesn't last. In fact, it seems to change with each generation. Truth once was that the world was flat. All of the intelligent people in the world agreed on that "fact." Mapmakers made a good living by believing that Truth.

Truth once was that Zeus ruled the world from a mountaintop in Greece. Truth once was that bleeding was a cure for many ills; check with our first President about that Truth. It cost him his life. And let me state here that some of the Truth you know about the market today is costing you your financial life. Let's look at the Truth of the current situation. If you are attempting to categorize this material, you would most likely classify it as an unpopular trading guide because it contradicts what I call the popular guides to trading success. Any popular guide to trading will tell you exactly what you want to hear. That's why the guides are popular. They have titles like BigBucks NoRisk! They are worth their selling price because the publisher always promises:

An easy to understand, proven system for turning little or no initial investment capital into a fortune, in virtually no time whatsoever.

Wouldn't it be great if we really could make a fortune like this without working? Well, we can't. These things could never be right. Be real; if we are raking in all that money, who is going to supply the losers? Who is going to lose all that money to us? And if it really works that well, why doesn't the publisher of BigBucks NoRisk take its publishing budget and put the money to work in the markets? There, "with little effort and absolutely no risk," it can make vastly more money than by publishing a competitive book that has skinny profit margins. The only sure thing about popular guides is that you are going to lose your money following their advice. If the popular guides tell you what you want to hear (so they can sell you books) and we tell you what is actually true about trading, then this must be an unpopular guide to trading.

The Truth is that a limited number of talented, rational people who know what they are doing can beat the market consistently. This is not just a game, it is life. And one of the primary purposes of the business of speculation is to make money. These are turbulent times. Past generations were not as turbulent. Remember when real estate was a fortune-building safe haven? Bonds were safe as the government. Savings and Loans were safe depositories, and heaven knows there could never be a problem with Insurance companies. If you chose to hold cash, it could never make you poor. As a hardworking trader/investor, you probably know about seminars, tutorials, books, systems, hotlines, and soon, that are supposedly designed to give you an edge in the markets. Maybe you have even attended a few, and perhaps you feel guilty about the ones you did not attend.

Tell me, have you ever known anyone and I mean anyone who has gone to a weekend seminar as a losing trader and, from something learned there, has become a consistent winner? I have spoken to over 25,000 traders, and I have yet to find the first one. Nor did I~o from losing to winning by attending workshops. Does that mean that they are useless or not worth the money? No, not at all. Workshops are great places for getting ideas but are simply no good at changing behavior, which is the topic of our discussion here. If you change your beliefs, you will change your results. Let me ask you two questions. (1) If I gave you $10,000 and a ticket to Las Vegas and asked you to go there and lose that $10,000, do you honestly feel that you could do that for me? (2) What if I gave you the same money and ticket and asked you to go there and double my money?

These are quite serious questions. If you really understand why you answered both of them the way you did, you are very close to understanding why you are not a more consistent winner. Let me throw a different concept at you. Whichever way you answered the questions and whatever you did when you got to Las Vegas, you would be successful. In answer to the first question, you would be a successful loser because you did exactly what you expected to do. You were successful at losing. You were a winner at losing, and there is no difference in being a winner at losing and a winner at winning. You get whatever you set up for yourself. Trading is a self-discovery process and a very personal experience. To make money in the markets consistently, you must know what your job is. Let me tell you the most important words you will ever hear about speculation and trading:

Speculators get paid for buying what nobody wants when nobody wants it and selling what everybody wants when everybody wants it.

While we are at it, here are a few things that speculators never get paid for: fundamental analysis, technical analysis, overbought/oversold analysis, Elliott Wave analysis, Gann analysis, cycle analysis, pattern analysis, oscillators, relative strength, econometric models, seasonal analysis, profile analysis, value analysis, sunspots, star positions, and a dozen other vogues, fads, and fantasies, except to the extent that they happen, by luck or design, to cause their proponent to demand the supply or supply the demand.

(Excerpts from New Trading Dimension: How to Profit from Chaos)