Taking Yourself Out of Market Analysis

• Posted by derek
• on October 21st, 2010

I’m going to highlight this post because it reveals a line that decision makers in any field must try to remember.  The following from Eli Radke about knowing yourself  is a powerful one for traders, absorb it:

“Separate what is happening to you from what is happening” (italics mine)

I can’t do justice to the line in a short post, nor can I reveal 10 keys to making this happen.  You just have to do it.  Markets are not a person, and nothing “they” do should be taken as an affront to you.  If you can’t remember this line, at least remember this from The Godfather “It’s not personal, it’s strictly business.”  Charles at The Kirk Report offered a gem of a post on not taking anything the market does personally.

This is a very personal competition for dollars, but one in which we can’t take the market’s action personally.  It takes purposeful practice to make these ideas stick, but here are a few classics that might help you stay in the moment and act on what you see as opposed to what you want to see or thought you’d see.

Reminiscences of a Stock Operator, Edwin Lefevre

Trading in the Zone, Mark Douglas

Daily Trading Coach, Brett Steenbarger

Market Wizards, Jack Schwager and New Market Wizards, Jack Schwager

Trade Your Way to Financial Freedom, Van Tharp

On top of that, we are fortunate to have Phil Pearlman spending 30 minutes each Tuesday night illustrating specific prescriptions we can use to work through the very normal behaviors that often thwart strong idea generation.  To paraphrase an oft-repeated line of his, “Irrational response to markets is a normal biological reaction…to have a completely rational response is actually very abnormal”.  It takes work to get our emotions working for us rather than against us, but the tools and prescriptions are out there if we take the time to put them into practice.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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