Module 12

Innerworth — Mind over markets

Chapters


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    1. Introducing ‘Innerworth – Mind over markets’

    Most people start trading the markets lured by the prospect of making easy money. But anyone with experience will agree that the stock markets are probably the toughest place to make easy money. You n ..

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    2. Accurate Perceptions of Loss and Risk Aversion

    Emotions often drive investment decisions. Trading lore is replete with examples of how fear and greed influence the masses to buy and sell at the wrong time. Similarly, behavioral economists have foc ..

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    3. Accepting Criticism

    Novice traders are infamous for needing to be right. This natural, human tendency is so powerful that novice traders engage in unproductive trading behaviors to avoid admitting that they are wrong. Th ..

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    4. Trading Capital: Size Matters

    How much capital does one need to start trading? Every person who is new to trading asks this question. It’s often the first question that pops up at trade shows and in trading-school classes. B ..

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    5. Action Oriented and Winning

    Trading isn’t easy. Indeed, the odds are against you. But if you succumb to hopelessness, you’ll never become a winning trader. You have two choices: You can wallow in self-pity or you can ..

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    6. Focus on the Action, Not the Prize

    It’s easy to falter while trading. Suddenly, you get distracted, panic, and make a trading error. When trading with an optimal mindset, in contrast, the winning trader is focused on his or her i ..

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    7. Detailed Action Plans: A Precursor For Trading Success

    In our everyday lives, we are used to doing things reflexively, on the spur of the moment. For example, we don’t consciously think about making a turn as we drive; we just do it automatically wi ..

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    8. A Trading Fable

    Did your parents read you fables as a child? Fables are often fanciful and improbable tales that have a lesson to teach. Here’s a thought-provoking trading fable. Once upon a time, there was a n ..

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    9. It’s Easier to Face Fear than Avoid It

    Jack fantasizes about becoming a profitable trader. He dreams of big wins and of amassing a great deal of wealth. In the back of his mind, he imagines that if he were wealthy, he could have a life ful ..

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    10. Regret: A Powerful Emotion You Must Face

    When trading the markets, one often faces actual harm: If you bet a lot of capital on a single trade, and it goes against you, you lose it. The harm isn’t imagined; the actual loss of money is p ..

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    11. The Unconscious Drive to Fail

    Ask traders about their reasons for trading, and most will tell you, “I want to make huge profits.” Although most traders get into the business to make a significant return on their money, ..

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    12. False Consensus Effects

    Suppose you decided to go long on Sears.  How many other investors would agree with your decision?  When people are asked such a question, they tend to over-estimate the number of people who will ma ..

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    13. Making Sense of it All

    Social psychologists are often fond of saying that people are “lay scientists.” Like formal scientists, they try to understand their world. They make hypotheses and test them. Rather than ..

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    14. Fear of a Sudden Turn of Events

    You have several positions open and things have been going well for the past few months. Suddenly, there is yet another interest rate hike right on the heels of a month of bad weather and natural disa ..

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    15. Refuting Core Beliefs: A Remedy for the Fear of Failure

    Our outlook and expectations dictate how we approach trading. For example, if we are extremely fearful, we will be reluctant to take risks, and at an extreme, we may even be afraid to even put on a tr ..

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    16. Paralyzed by a Fear of Failure

    Jack has just made five losing trades in a row. His confidence is shaken, and now he is reluctant to make another trade. He thinks, “Why should I try again. I’ll just lose again. If I lose ..

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    17. Getting Worked Up For Nothing

    Jack’s been trading for the past five years, and he has put in a heroic effort. He worked two jobs to build up enough capital to trade and have a realistic chance of success. He spent nights and ..

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    18. Loss is Feedback, Not Failure

    Like any challenging endeavor, trading requires a “thick skin.” One cannot be easily hurt by criticism. One must be completely open to criticism of any kind so that changes to one’s ..

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    19. First in Line and Ready for Action

    There’s security in numbers. Have you ever looked at a school of fish in an aquarium? They stay in a big clump because if a bigger fish is nearby and ready to eat one of them, a single fish is l ..

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    20. The Flexible Trader

    The winning trader is flexible. Flexible traders have a carefree attitude when it comes to executing a trade. They don’t over-think their strategy. They do their homework, develop a reasonable t ..

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    21. Flexible and Open to Possibilities

    Winning traders are flexible. They look at a trade from different angles and they are not afraid to explore every possibility. They know they may be wrong, but being wrong doesn’t bother them. I ..