Trading Zone

Question 1

Flashcard 1: Principles of Consistency
Front: What are the seven principles of consistency?

Answer 1

Back:

I objectively identify my edges.
I predefine the risk of every trade.
I completely accept risk or I am willing to let go of the trade.
I act on my edges without reservation or hesitation.
I pay myself as the market makes money available to me.
I continually monitor my susceptibility for making errors.
I never violate these principles.

Question 2

Flashcard 2: Objective Identification
Front: What is the first principle of consistency?

Answer 2

Back: “I objectively identify my edges.”

Question 3

Front: What is the second principle of consistency?

Answer 3

I predefine the risk of every trade.

Question 4

Front: What is the third principle of consistency?

Answer 4

I completely accept risk or I am willing to let go of the trade.

Question 5

Front: What is the 4th principle of consistency?

Answer 5

I act on my edges without reservation or hesitation.

Question 6

Front: What is the 5th principle of consistency?

Answer 6

I pay myself as the market makes money available to me.

Question 7

Front: What is the 6th principle of consistency?

Answer 7

I continually monitor my susceptibility for making errors.

Question 8

Front: What is the 7th principle of consistency?

Answer 8

I never violate these principles.

Question 9

Flashcard 3: Being Objective
Front: What does being objective mean in the context of trading?

Answer 9

Back: Being objective means there’s no potential to perceive any market information from a painful or euphoric perspective.

Question 10

Flashcard 4: Objective Mindset
Front: How can one become an objective observer in trading?

Answer 10

Back: One needs to think from the market’s perspective and understand that every moment in the market is unique.

Question 11

Flashcard 5: Illusion in Trading
Front: What is referred to as an “illusion” in the context of trading?

Answer 11

Back: When traders are not objective or connected to the “now moment opportunity flow,” leading to trading errors.

Question 12

Flashcard 6: Typical Trading Errors
Front: What are the common trading errors one might commit?

Answer 12

Back: Hesitating, not defining risk, refusing to take a loss, prematurely exiting a winning trade, and letting a winning trade turn into a loser, among others.

Question 13

Flashcard 7: Five Fundamental Truths
Front: What effect do the five fundamental truths about the market have on traders?

Answer 13

Back: They keep trader expectations neutral, focus on the present moment, and help eliminate trading errors, leading to increased trust and confidence.

Question 14

what are the five fundamental truths?

Answer 14

1. Anything can happen.
2. You don’t need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an
   edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over
   another.
5. Every moment in the market is unique.

Question 15

Flashcard 8: Market Perspective
Front: What’s the first objective in relation to the market’s perspective?

Answer 15

Back: Integrate as a dominant belief, “I objectively identify my edges.”

Question 16

Flashcard 9: Transformation
Front: How can a trader achieve a transformation to think from the market’s perspective?

Answer 16

Back: The transformation starts with a strong desire and self-discipline. A trader should have a clear objective and focus on consistency.

Question 17

Flashcard 10: Conflicting Forces
Front: What might conflict with a trader’s goal for consistency?

Answer 17

Back: Desires to impress others, be right about predictions, experience euphoria, or fulfill an addiction to random rewards, among others.

Question 18

Flashcard 11: Desire
Front: Why is desire crucial in this trading process?

Answer 18

Back: A clear, intense desire for consistency is an absolute prerequisite for the process to work. It’s necessary to overcome other conflicting motivations.

Question 19

Flashcard 12: Desire’s Force
Front: Why is desire highlighted as a force in the passage?

Answer 19

Back: Desire can be used to create a new dimension to one’s identity, shift energy between conflicting concepts, or change memories from negative to positive.

Question 20

Flashcard 13: Making up your Mind
Front: What does “making up your mind” imply?

Answer 20

Back: Deciding what you desire with such clarity and conviction that no internal or external barriers stand in your way.

Question 21

Flashcard 14: Time vs. Focused Desire
Front: How is deactivating internal conflicts related to time and desire?

Answer 21

Back: De-activating conflicts isn’t a function of time but of focused desire. However, clarity and conviction might take time.

Question 22

Flashcard 15: Self-Discipline Role
Front: How is self-discipline important in achieving consistency in trading?

Answer 22

Back: In the absence of extreme clarity and conviction, the technique of self-discipline over time can help integrate consistent trading beliefs.

Question 23

Flashcard 16: Obstacles to Consistency
Front: What might serve as obstacles to achieving consistency in trading?

Answer 23

Back: Other motivations such as trading for euphoria, impressing others, fulfilling an addiction to random rewards, or being right about predictions.

Question 24

Flashcard 17: Desire for Consistency
Front: Why is wanting consistency important?

Answer 24

Back: One has to want consistency enough to give up all other trading motivations that aren’t aligned with achieving consistent success.

Question 25

Flashcard 19: Achieving Transformation Front: What are the prerequisites for transforming one's trading mindset?

Answer 25

Back: A clear and intense desire for consistency, along with the willingness to refocus on that desire using self-discipline.

Question 26

Flashcard 20: Trading Desire's Power Front: How powerful is a clear desire aimed at a specific objective in trading?

Answer 26

Back: Such a desire can instantly shift one's mental structure, deactivate internal conflicts, and change the context of memories.

Question 27

Flashcard 23: Desire vs. Existing Beliefs Front: Can one's clear desire coincide with their current beliefs about trading?

Answer 27

Back: No, desire does not need to coincide or agree with current beliefs. It can create new beliefs and override the existing ones.

Question 28

Flashcard 24: Role of Clarity in Desire Front: Why is clarity in one's desire emphasized in the passage?

Answer 28

Back: Absolute clarity ensures that there are no lingering doubts, and the force of resolve can overcome any internal or external barriers.

Question 29

Flashcard 25: Meaning of "Make up your Mind" Front: What is the deeper meaning of "make up your mind" in the context of the passage?

Answer 29

Back: It refers to achieving such clarity and conviction in desire that nothing can hinder or distract from the set goal.

Question 30

Flashcard 27: The Force of Conflicting Motivations Front: Why might conflicting motivations prevent one from achieving consistency in trading?

Answer 30

Back: These motivations, such as seeking euphoria or wanting to impress others, might be so strong that they prevent one from even beginning exercises aimed at consistency.

Question 31

Front: What role does self-discipline play in overcoming challenges?

Answer 31

Back: In the absence of unwavering clarity and conviction, self-discipline can gradually align one's actions with their desire for consistency over time.

Question 32

Flashcard 29: Beginning the Transformation Process Front: What is the starting point of the transformation process in the context of trading?

Answer 32

Back: The trader must possess a powerful desire for consistency, so much so that they're willing to forsake all other conflicting motivations.

Question 33

Flashcard 30: Active Contradictions vs. Desire Front: Can active contradictions remain unchanged throughout one's life?

Answer 33

Back: Yes, unless there's a clear desire to change, the imbalance between conflicting beliefs can remain throughout one's life.

Question 34

The first principle of consistency is the belief, "I objectively identify my edges." The key word here is objectively

Answer 34

Being objective means there's no potential to define, interpret, and therefore perceive any market information from either a painful or euphoric perspective.

Question 35

The way to be objective is to operate out of

Answer 35

beliefs that keep your expectations neutral and to always take the unknown forces into consideration.

Question 36

Remember, you have to specifically train your mind to be objective and to

Answer 36

stay focused in the "now moment opportunity flow."

Question 37

Our minds are not naturally wired to think this way, so to be an objective observer you have to learn to

Answer 37

think from the market's perspective.

Question 38

From the market's perspective, there are always unknown

Answer 38

forces (traders) waiting to act on price movement

Question 39

from the market's perspective, "every moment is truly unique,"

Answer 39

even though the moment may look, sound, or feel exactly the same as some moment logged away in your memory bank.

Question 40

The instant you either decide or assume you know what's going to happen next

Answer 40

you will automatically expect to be right

Question 41

what you know, at least at the rational level of thinking, can only take into consideration your unique past, which

Answer 41

may not have any relationship to what is actually happening from the markets perspective.

Question 42

any market information that is not consistent with your expectation has the potential to be

Answer 42

defined and interpreted as painful.

Question 43

To avoid experiencing the pain, your mind will

Answer 43

automatically compensate, with both conscious and subconscious pain-avoidance mechanisms, for any differences between what you expect and what the market is offering

Question 44

h both conscious and subconscious pain-avoidance mechanisms,

Answer 44

will experience is commonly referred to as an "illusion."

Question 45

In a state of illusion, you are

Answer 45

neither objective nor connected to the "now moment opportunity flow."

Question 46

" In a state of illusion, Instead, you become

Answer 46

susceptible to committing all the typical trading errors (hesitating, jumping the gun, not predefining your risk, defining your risk but refusing to take the loss and letting the trade turn into a bigger loser, getting out of a winning trade too soon, not taking any profits out of a winning trade, letting a winning trade turn into a loser, moving a stop closer to your entry point, getting stopped out and watching the market trade back in your favor, or trading too large a position in relationship to your equity).

Question 47

The five fundamental truths about the market will keep your expectations neutral, focus your mind in the

Answer 47

"now moment opportunity flow"

Question 48

. The five fundamental truths about the market will keep your expectations neutral, focus your mind in the "now moment opportunity flow" BY

Answer 48

disassociating die present moment from your past), and, therefore, eliminate your potential to commit these errors.

Question 49

When you stop making trading errors,

Answer 49

you'll begin trusting yourself.

Question 50

As your sense of self-trust increases, so will your sense of

Answer 50

selfconfidence.

Question 51

The greater your confidence,

Answer 51

the easier it will be to execute your trades (act on your edges without reservation or hesitation)

Question 52

The five truths will also create a state of mind in which

Answer 52

you will genuinely accept the risks of trading.

Question 53

When you genuinely accept the risks, you will

Answer 53

be at peace with any outcome.

Question 54

When you're at peace with any outcome,

Answer 54

you will experience a carefree, objective state of mind, where you make yourself available to perceive and act upon whatever the market is offering you (from its perspective) at any given "now moment."

Question 55

The first objective is to integrate as a dominant belief,

Answer 55

"I objectively identify my edges."

Question 56

The challenge now is, how do you get there? How do you transform yourself into a person who can consistently think in the market's perspective?

Answer 56

The process of transformation starts with your desire and your willingness to refocus on the object of your desire (self-discipline).

Question 57

Desire is a force. It does not

Answer 57

have to coincide or agree with anything that you currently believe to be true about the nature of trading.

Question 58

A clear desire aimed squarely at a specific objective is

Answer 58

a very powerful tool.

Question 59

You can use the force of your desire to

Answer 59

create an entirely new version or dimension to your identity; shift energy between two or more conflicting concepts; or change the context or polarity of your memories from negative to positive.

Question 60

You can use the force of your desire to

Answer 60

create an entirely new version or dimension to your identity

Question 61

You can use the force of your desire to

Answer 61

hift energy between two or more conflicting concepts;

Question 62

You can use the force of your desire to

Answer 62

change the context or polarity of your memories from negative to positive.

Question 63

"Make up your mind." The implication of "making up our minds" is that we decide

Answer 63

e exactly what we desire with so much clarity (absolutely no lingering doubts) and with so much conviction that literally nothing stands in our way, either internally or externally

Question 64

If there's enough force behind our resolve, it's possible to

Answer 64

experience a major shift in our mental structure virtually instantaneously.

Question 65

De-activating internal conflicts is not a function of time; it's a

Answer 65

function-focused desire (although it can take a considerable amount of time to get to the point where we really make up our minds)

Question 66

Otherwise, in the absence of extreme clarity and conviction, the technique of self-discipline, over time, will

Answer 66

do the job quite nicely (if, of course, you're willing to use it).

Question 67

De-activating internal conflicts is not a function of time; it's a function-focused desire, To get there, you must

Answer 67

"make up your mind," with as much conviction and clarity as possible, that more than anything else you desire consistency (the state of mind of trust, confidence, and objectivity) from your trading.

Question 68

you must "make up your mind," with as much conviction and clarity as possible, that more than anything else you desire consistency (the state of mind of trust, confidence, and objectivity) from your trading. This is necessary because if you're like most traders, you're going to be up against some very formidable conflicting forces. For example,

Answer 68

if you've been trading to get high from the euphoria of catching a big move, to impress your family and friends, to be a hero, to fulfill an addiction to random rewards, to be right about your predictions, or for any other reason that has nothing to do with being consistent,

Question 69

you must "make up your mind,", because you'll find the force of these other motivations will not only act as an obstacle making the trading exercise I'm about to give you veiy difficult, but

Answer 69

it could very well be strong enough even to keep you from doing the exercise at all

Question 70

To even start this process, you have to want consistency so much that you would be willing to give up all the other

Answer 70

reasons, motivations, or agendas you have for trading that aren't consistent with the process of integrating the beliefs that create consistency.

Question 71

A clear, intense desire is an absolute

Answer 71

prerequisite if you're going to make this process work for you