I receive some pretty cool emails from a guy called Dean Whittingham (http://www.deanwhittingham.com/amember/go.php?r=26&i=l1) which I'd like you all to read. He has been consistently interesting - I think you'll agree.

What is the hardest thing a trader will ever have to do?

Visit forums, join memberships, purchase tuition with member areas for support, read books, talk to fellow traders etc and you can be guaranteed you will come across many who will be struggling with a whole host of reasons why. Some will even appear as experts but beneath the surface are struggling with some aspect of their own trading system or style. But do you know what the hardest thing any trader will have to do is?

1. Learn the jargon - no way, this is easy and it just takes time.

2. Find a profitable trading system - there are hundreds of thousands of them, in fact many are just given away for free nowadays.

3. Back test and paper trade - c'mon, I know many people don't like hard work but you're way off here.

4. Learning to read charts - kids like reading charts as they look at the green thing and they say, "Hey that's going up", or if they see a red thing they say "that's going down".

5. Setting goals - important because if you don't have a goal, you're floating aimlessly; but not the hardest.

6. Thinking successfully - no matter who you are or where you are there is always something you are good at. If this is so you already know how to be successful.

7. Being true to yourself - knowing who you are is indeed a quality that sets one apart from the rest and is therefore one of the hardest things a trader will ever have to learn, but not the hardest.

8. Cut losses short - it is hard to do this for many but it is definitely not the hardest.

9. Logging trades - as we are lazy this is done by a very few, but this does not make it the hardest, not by a long shot.

10. Keep emotions at bay - trading without emotions is very hard, but as we are humans the proper definition is more like managing emotions; but either way it is not the hardest thing a trader will ever have to do.

11. Remain independent - listening to other's advice whether it is a newsletter, internet forum, or just your buddy next door is very easy to do as we like to follow other people by nature so to do the opposite is hard, but not the hardest.

12. Sticking to the rules of a plan or system - this is indeed hard but not the hardest, and the reason is because this is too general a statement; many people trade with only rules for analyzing or entering or exiting, but most never have a complete set of rules for all three.

13. Sticking to the rules for all three (analyzing, entering and exiting) - getting closer but still not there just yet.

14. Holding on to winning trades - BINGO!

If we look back to points 12 and 13, I made about sticking to rules for exiting, this should start to open your eyes to the hardest thing a trader will ever have to do - hold on to winning trades.

Why is this so difficult?

For one, most place more emphasis on seeking opportunities and rules for entering than on anything else to do with running a trading business. And this is exactly how the whole "trading" thing is marketed. Very few traders have rules for exiting.

But even those that do have rules for exiting, only a small minority will stick to them, and this is because we as traders can not get past thinking about the money. Money rules us as traders and probably rules us in our lives too.

If you go back over all the points above I can tell you that all of them contribute in some way to the most difficult thing a trader will do; hold on to winning trades.

For example, if you think you're a successful trader then why would you cut your profits short?

Because if you thought you were a success you would know yourself and where you need emotional management, you would learn any jargon and how to analyze, you would have a goal, and you would have a plan to go with it, which means you would have a system with rules for analyzing, entering and exiting, and you would have a fair idea how this system performs, which means you would have back-tested or paper traded it, and you'd cut losses short and you'd log all trades, you'd remain independent, and finally you'd stick to all the rules.

What a trader will face is the situation where they cut a profit short and take a look at what they made for that trade; this will send out a good feeling throughout their body. What will compound this feeling is if they look a little later on to see their decision was justified because the trade would have resulted in a loss if they'd not closed it out earlier.

The problem is this good feeling we are experiencing is encouraging bad behaviour whether it's breaking rules, trading without a plan or whatever. To continue on this path will lead you to having to find more winning trades because the trades you do get wrong will cost you more than what you make from the profitable ones.

Now here comes the litmus test: If you cut a profit short only to see it would have been a lot more profitable had you held on longer or used your exit rules then this should hurt - I mean really hurt, but not because of the lost opportunity but because you see it as a failure on your part. If it doesn't then success means very little to you.

All traders will go through the process of seeing themselves in a winning trade only to see it end up as a loss. This is inevitable. Apart from having someone look over your shoulder to prevent you breaking rules or cutting profits short, the only person who can do this is you! If you find yourself cutting profits short then look for your weakest links in your trading business. I have given you many here to ponder.

Brought to you by Dean Whittington (http://www.deanwhittingham.com/amember/go.php?r=26&i=l1)

THE AMYGDALA

The little almond shaped organ that might be holding you back.

How many times have you set your self a goal to achieve something you've never achieved before; you've been highly motivated and really excited at first but in short time, you find you give up or quit? There is a small almond shaped organ in your brain called the Amygdala, which must share some of the blame.

The Amygdala is a small almond shaped set of nuclei that sits in the brain. Its job is to send out certain chemicals to the body when needed, that cause you to feel fear, anxiety, doubt and even depression. You may be wondering why on earth Mother Nature would equip us with such an organ; let me explain.

The Amygdala is alerted by other parts of the brain when you are in a situation that may be detrimental to your health or well-being, or that is not in line with what you want. As was the case with early primitive man, the Amygdala would send out chemicals to the body when danger was present such as a large carnivore, thus creating a sense of fear and hopefully preventing man from proceeding or getting any closer to the danger.

In modern day man the process is exactly the same; when we walk into the garden shed or a small walk or crawl space we are ever watchful in case a big spider is going to surprise us with their presence; the Amygdala is causing us to feel this way. However the Amygdala knows when we are out of our comfort zone in any aspect of our life and acts accordingly.

Being out of your comfort zone can mean all sorts of things. Just as you feel uncomfortable walking through a small dark garden shed, you can feel just as if not more uncomfortable doing something you've never done before, such as a new job, career, learning to invest, new diet or exercise program, giving up a bad habit, and so on. In fact, anything that you attempt to do that you've never done before.

To give you an example, one of the biggest fears we have is talking in public. Because we have a self-image of someone who is unable to speak in public, whether it is because you've never done it before, or you've tried it once and stumbled, it is a situation we'd rather avoid. The Amygdala is the very organ that is pumping your body full of fear as soon as you even accommodate the thought of speaking in public.

The list goes on: making cold calls, asking the boss for a raise, cutting out bad foods, doing exercise, saving money, creating a business, asking a person out for a date and so on. Whether its rejection or just plain having to change our ways, our comfort zone is being pushed by the Amygdala.

Because we don't like the feelings we feel when out of our comfort zone, we will make excuses and avoid the change. How many times have you done this?

Exercise:
Just to give you an idea of the Amagdyla in action, next time you are out, walk up to any stranger and just stare straight into their eyes - don't say anything, don't smile, just stare. Do you think you can do that?

How do you feel just thinking about it?

Does it make you feel uncomfortable? If it does, your Amagdyla is pumping out the chemicals giving you that feeling. If it doesn't you're one strange being! Only kidding. There are a few that could do it, but not many.

While you are thinking this exercise through, how many excuses or fears did you come up with? What if the person starts yelling at me, what if they hit me? Can you see the whole process in action now.

Now go through some other desires you have and see if you're getting the same feelings such as imagining making a million dollars in trading? Do you get the same feelings? If you do your self-image is saying you don't think you're capable of achieving this goal.

At the moment, just use this tool to help determine where your beliefs really are.

Brought to you by Dean Whittington (http://www.deanwhittingham.com/amember/go.php?r=26&i=l1)

HOW YOUR MIND PROCESSES TRADING OPPORTUNITIES

A filtering process in your brain is responsible for processing trading opportunities and whether or not you spot them.

Have you ever wondered how some people seem to find all the opportunities, they have the Midas touch, everything they touch seems to turn to gold, they have the perfect partner and great health? Why is this? What are they doing that everyone else isn't.

For one, they act, but that's half the process; the other half of the process is that they are able to see opportunities where others can't, and this is thanks to an organ in our brain called the Reticular Formation.

Inside our brain stem lies a formation about the size of our pinky finger, called the Reticular Formation. This connects to other parts of the brain and our body via millions of communication pathways. This whole system was named 'The Reticular Activation System (RAS)' by physiologist H. W. Magoun. Its job is to filter out information.

Every second of the day we receive over 10 million bits of information through our 5 senses. This is a lot of information and it should come as little surprise that if we had to consciously deal with all this information we'd simply explode. So it is the job of the reticular formation to filter out what is unimportant, and this is where it gets interesting.

We have at both a primal level (evolution, passing on of genes etc), and the self-image (and belief) level a list of importance, and our reticular formation filters out information according to this list. To demonstrate this at the more primal level, I once witnessed my wife sleep right through a siren that had gone wailing down the street at 5am in the morning, yet 20 minutes later she
awoke to the cry of our daughter who paled considerably in comparison to the volume of the siren.

At the self-image level, the process is exactly the same. We have a list of importance based on our self-image which is based on our own belief systems. If your self-image and belief system is one of someone who thinks they attract bad luck, you'll have this ranked very high on your importance list. You reticular formation then filters out any information contrary to that belief.

A test was done in the UK where 100 people were gathered and assessed for their general outlook in life. They were listed into extremely optimistic, optimistic, pessimistic and extremely pessimistic and were then asked to walk down the road and around the block.

Along the route was left a 100 pound note. Of all the 100, only 6 found the 100 pound note, and not one of these six came from either the pessimistic or extremely pessimistic groups. I might add at this point, the optimistic and extremely optimistic groups made up only a small minority of the whole 100.

So the reticular formation is allowing those that believe in themselves to see what others can not. Whether it's money, health, relations, attracting the ideal mate, finding great opportunities, or simply being able to make better decisions, you can only be privy to the information you want if you believe it exists, and if you believe you are worthy of receiving it.

And this all comes down to your self image and your beliefs at the sub conscious level.

Exercise:
By now you should be clear about what it is you want from trading. You should also have a good idea of your weaknesses, your bad habits and beliefs you have that are not inline with your desires.

You should now allocate some time every day to change your self-image, it doesn't have to be much around 10 to 15 minutes is sufficient, but if you want to do more that is okay.

Spend some of that time just sitting and relaxing your mind. Don't worry about what comes into your mind just for now, just learn to relax.

Then for 5 to 10 minutes, play the scenes in your mind of the achievements you want, and allow the discomfort, don't fight it. See yourself achieving but also being the opposite to any bad habits you have, like being calm and rational after a loss.

The more you become aware of your own self-image the more you are able to change it. Your results in life and the actions the mechanisms in your brain take are all connected to the self-image through the brain's automating process built in us since early man.

But you have the power to change the self-image. For traders especially, this also means removing bad influences.

As I have said before, forums are a great place for certain things but they are also a trap because a lot of very negative people spend a lot of their time in them. These negativities will have the same effect on your sub conscious as watching the news does. They create unwanted feelings which can become addictive over time, creating an automated process in your brain to seek out more negativity and to filter out opportunities that will benefit you.

Spend some time now looking at any negative influences you have or are exposed to and remove them.

Brought to you by Dean Whittington (http://www.deanwhittingham.com/amember/go.php?r=26&i=l1)

Yes, I agree. Consistantly interesting. I've added his weblink in my favourites. I have so many 'favourites' I've added a 'Bill's Favourites' so I know it's what you've recommended.

From bull to bear: why markets correct.

Markets move up because market participants believe in the fundamentals behind the market. At a certain point it is seen that the fundamentals change and the market corrects, however the reason fundamentals change is not because of some external event, but because of the participants themselves. In other words, an excess of bullishness creates bearishness; it is the participation itself in the market that creates the shift and thus the correction or bear market.

To understand this phenomenon, we must first look at how commodity cycles occur.

When commodity prices are high, there is an attraction to produce it, because the high prices offer high profits. When they are low, the opposite happens, because who wants to put all their money into producing a commodity if it is so cheap there is no profit to be had.

If we start at the bottom of the cycle, we'll be able to understand this better.

Let's create a commodity called 'X'. X is a commodity that is used every day by people the world over. X is very cheap, at around $1 a parcel. Because it costs about $3 a parcel to grow, no one is producing it; however this doesn't stop people consuming it. At this time there is a mound of X in Farmer Joes warehouse and so there's no need to produce it either.

As months go by, the pile of X is stating to diminish, and so Farmer Joe who recognizes that the consumption of X is still constant starts to raise the price; which doesn't seem to affect consumption all that much, because X is a necessity. After a few more months, Farmer Joe recognizes that he is able to sell X at $7 a parcel without any impact on consumption.

Farmer Joe sees this as an opportunity so he decides to plant some seeds and grow some more X. The only problem is it takes 12 months for X to mature, all the while the mound in his warehouse gets smaller and smaller, and the price at which he is able to sell keeps getting higher. In fact he is now able to fetch $12 a parcel.

Other Farmer's around the area see what's going on and decide they are going to grow some X too. Several months ago there was just a large mound of X and no X farms; now there is a small mound of X and plenty of X farms in production.

As Farmer Joes farm matures he is able to fetch a nice $12 a parcel for X, and so he is smiling, however not long afterwards, many of the other farms begin to mature also. All of a sudden there is a massive glut of X, which drives the price of X right down, back below $3 a parcel. The farmers who were last to grow X find that they will now have to face a loss.

In this situation, it was the farmers who created the cycle, and not the consumers; who just consume X, and pay what ever the price is on the day. However the price was dictated by the amount of X available, and this was due to the farmers. When there was plenty of X around, the price was low, and when there was very little around, the price was high; however it was the rush to produce more X that created the glut.

The fundamentals around X was simply supply and demand, and this supply and demand was created by the market participants themselves; the farmers.

All financial markets are the same. Investors and traders may go to many lengths to work out the fundamentals behind a stock or market, but the real driving force is the supply and demand equation, which is created by the market participants themselves.

If everyone on the planet is bullish and long on a market because the 'fundamentals' suggest that this market is sound, they have affected the supply and demand equation of this market irrespective of the fundamentals behind it. They have in fact created an energy that will force the market the other way, simply because there is no one left to push prices higher.

The same is true the other way. If everyone is bearish a market, irrespective of the fundamentals, they will effect the supply and demand equation to the point where there are simply no sellers left. Price will then head up; which will seem to contradict the fundamentals or news at that time.

To jump on a stock or market at the top is to buy when everyone else has bought. If you base an investment decision on information made available to everyone, i.e. the front page of a newspaper, you are in effect the last farmer to plant X seeds. The front page syndrome is the symptom that tells you the supply and demand equation has now turned around, regardless of the fundamentals.

All turning points in markets are created by an extreme in supply and demand of the market participants. All trends are the transferring of one to the other. In other words, when there is extreme bearishness, the market will head up, and keep heading up until all the bears turn into bulls.

Are you going to be the last farmer who plants his X seeds?

To your trading success,

Brought to you by Dean Whittington (http://www.deanwhittingham.com/amember/go.php?r=26&i=l1)

From the desk of Dean Whittingham (http://www.pentagonaltrading.com/cmd.php?af=823942)...

Do you struggle with pulling the trigger even when everything lines up?

I recently spoke to a guy from London called David, who is a visitor to my site and who wanted to have a chat. We both had been students of a particular forex trader and so it seemed like a good idea to have a chat about where our trading is today.

David made an interesting comment, which is not unique, I've experienced it and so have most other traders. He said, "I see a set up I like such as a hammer and everything else lines up, but I just don't have the balls to pull the trigger". I proceeded to tell him why this occurs, and I hope it will make a difference to his trading.

Pulling the trigger comes with a variety of emotions, and I'm sure you know what I'm talking about. One of the more powerful emotions is fear, and this emotion alone will prevent traders from entering a trade, despite having everything line up, exactly how they'd like it.

The fear is of course, the fear of loss. Once we lose money on a trade, we fear having the same thing happen again. If this is happening to you, it means you haven't researched your system enough, or don't know it's probabilities of success.

If someone told you that a certain system had 70% probability of success, and you had complete and utter faith in their word, or you knew deep down with 100% belief that a trading system will bring a 70% success rate, you would never have a problem with pulling the trigger.

I'll use a bought system as an example. Let's say you've paid $500 for a trading system. It came with all the books, DVDs and so on and it promised to deliver a 70% success rate. The issue then comes with how much faith you have in the system's designer. You see, if you have any sort of doubt, or even approach the system with the 'I'll give it a go and see' mentality, you may find it hard to pull the trigger straight after a loss.

I use a bought system as an example because I've seen time and time again where a perfectly good system only seems to produce around 5% of successful traders. It's not the system that's at fault, part of the problem is the users faith in the system. With no faith, there is no discipline to stay with the rules, and this creates more doubt when coming to pull the trigger.

If you're struggling with this phenomenon, you may need to do some homework. If you're trading your own system, you need to research the set ups you are looking for to see how often the system produces successful trades. If you can do this and see that over time your own set of rules will indeed produce a satisfactory outcome, your fear of pulling the trigger should disappear.

If you've bought a system, back test it and determine how it performs, without having the 'I'll give it a go and see' mentality. This only causes your mind to focus on something you don't want, and believe me, when you focus on something you don't want, you get more of what you don't want. Know that your system works and you shouldn't have an issue with pulling the trigger.

Brought to you by Dean Whittington (http://www.deanwhittingham.com/amember/go.php?r=26&i=l1)

Hi Bill and all,
Thanks for the comments and the posting of my articles. I went through a period where I was writing articles like mad - everything just flowed through my fingers. I've laid of a bit lately but next year I think I'll be writing some more - the recent financial crisis (or so called as a lot of it is fear mongering LOL), will make for some great content to relate to.

The ones of most use I believe, are the ones related to the mind, and the science behind our thinking and thought processes. A client of mine who had bought my 'Reprogramming the Mind' program wrote to me recently telling me she had just had her first $10K month ever. She was extremelt happy, and here was the upshot...

She didn't change anything related to her trading system,style or method. It all came down to a change of her neural mapping which influenced her decision making process, and also her emotional responses - which we all know makes up 80% of our trading. An important part of mastering this area is to actually be aware of yourself.

I like a story I was told about a man who is sitting on the river bank, and he is watching boats sail past. But what he then finds is that all of a sudden he is on one of the boats, mingling, partying, doing anything, and basically getting involved in all of what is happening on the boat. But he then remembers he was on the river bank and wants to go back and as soon as he thinks this he returns to the river bank.

Another boat sails past and again, all of a sudden he finds himself on the boat, not knowing how he got there, just knowing that although a huge part of him feels drawn to stay on the boat, he is supposed to be on the river bank.

The point to this little story is that we as humans are sitting on the river bank and the boats sailing past our our emotions and responses to events in our life. Our job is to prevent ourselves getting caught up in our emotions and jumping on the boat, but rather to observe them instead, and just watch the boat sail past. It's fine to 'know' what the boat is about, like knowing the emotion you are feeling, but to not get caught up in it as if you have to experience something you don't want to - just observe and you'll clear many a pathway in your mind for greater things in life including clarity and peace of mind.

Brought to you by Dean Whittington (http://www.deanwhittingham.com/amember/go.php?r=26&i=l1)

Really good stuff here. Can relate very well with this for improvement and the traps.Have felt them along the way.

Hi all ODW's,
I found this guy to be very switched on with chart patterns. I bought his book and found it to be very good. Hope it helps. Cheers www.suriNotes.com
p.s Bill no affiliates here mate :1tu:

Here is Dean's latest email I received this morning. The ebook is a pretty good read and exercise to work through. Hope you all enjoy it.

Dean here from Reprogramming the Mind for Success

One thing is certain.

Without self-confidence it is impossible to
achieve great results.

High self-esteem is so powerful that it can
literally open any door for you. Confident people
have CHARISMA, a personal magnetism and charm.

Having self-confidence is like having a magic wand
in your pocket.

I recently received a free mini-Ebook from Sasha
Xarrian that I want to share with you:

http://www.outrageousmastery.com/cmd.php?Clk=2877455

It reveals 7 powerful techniques that can make
you a confident and charismatic person.

(I personally loved "how to stop criticizing
yourself" trick on page 11!)

You'll also find out:

- what exactly stops you from feeling
self-confident

- how to learn to honor and love yourself on a
completely different level

- how to put a smile on your face first thing in
the morning (it works even if your alarm goes off
at 5am!)

- anti-fear techniques

- how to gradually expand your comfort zone

- how to get rid of the guilt-baggage you're
carrying around

- one action that you have probably never heard
of before that will drastically change your
self-confidence (if you're in a hurry I would
recommend you reading this one technique on page
21! It works.)

The report is a quick 20-30 minutes read, there's
no fluff, just great usable information. I can't
recommend it highly enough:

http://www.outrageousmastery.com/cmd.php?Clk=2877455

To your success
Dean

Wow, I am loving the content of this thread! Thank you.