This is an extremely important question and one to which the majority of investors/ traders do not give sufficient thought. Successful traders understand with absolute clarity why they trade. Why you trade must be the subject matter of the mission statement in the trading plan you are going to write. Your purpose for trading is…

The ultimate goal for the trader and active investor is to reach the point where trading becomes automatic. At this level all trades are simply executed according to a plan and the rules of their system(s) have become internalised to the extent that they are adhered to flawlessly, consistently and objectively without hesitation or reservation.…

This week we begin to look at how to get from trading incompetence to trading competence. That is, moving ‘above the line’ on our competence matrix as shown in the figure below in order to achieve consistency and objectivity in our trading. Through trading in a disciplined and mechanical approach we are now able to…

Typical attributes of the Unconscious Incompetence level that we discussed last week include relying on the advice of others as the basis for making trading decisions (including brokers, the media, hot tips, chat rooms, newsletters and forums – typically referred to as ‘market noise’), and having no clearly defined and unambiguous strategy, system or trading…

Following on from the theme we have been discussing in the past 2 blogs on the differences between well recognised societal paradigms and how they differ from a market paradigm, let’s move on to discuss the development of trading competence. This topic will feature over the next 4 weeks as we examine the 4 stages…

Continuing from last week’s topic “societal paradigm vs market paradigm” I’ve used another 3 examples of how our social paradigm can deter us from success in the market. Whilst the societal paradigms that we learn and adopt as part and parcel of our involvement in society stand us in good stead to co-exist amicably (most…

“If you think you have discovered a great truth and it is not a paradox, I suspect you may be deceiving yourself.” – M. Scott Peck, author of popular self-help book, ‘The Road Less Travelled’ From an early age society, through our parents and our other experiences interacting with our social environment, teaches us fundamental…

There is natural rhythm in the universe. Day follows night, the tide ebbs in and out, the seasons change from autumn to winter to spring to summer and the fauna and flora all follow their natural processes during the season changes. Squirrels store acorns, birds and whales migrate, bears and snakes hibernate, trees lose their…

At this point in the stock market’s overall phase many people are blundering around wondering what both the market and they as investors will do next. Is the market in a consolidation phase, is this a dead cat bounce in a continuing bear market, or is the 15% rise from the recent trough the start…

Duality occurs in every part of our lives yet most people don’t recognise and understand this. This lack of understanding leads to too much significance being placed on one side of the duality equation which causes imbalance and disturbs equilibrium. There are positive and negative poles on either side of life’s equations that we deal…