Wednesday, 7 December 2016

Think and Grow Rich

Perhaps the biggest turning point for me as a trader was when I read the book "Think and Grow Rich" by Napoleon Hill. For those not familiar, this book was written way back in the 1930s following the American depression and was really one of the world's first "self help" books, going on to sell millions of copies worldwide. Originally intended to help Americans find a way out of the appalling economic mess caused by the Wall Street crash, which left millions of Americans homeless, penniless or in dire straights, it has become the grand-daddy of all self development books and is touted by all the big names in the self development field today as one of the key aids in their success. I know it was in turning me from a good trader into a wealthy trader.

The over-riding principle of this book is that the power lies within any person, no matter what their circumstances, to build the life that they want and achieve absolutely anything they put their mind too. In essence, by thinking in the right manner, you can become rich. Rich doesn't necessarily mean in monetary terms (although that is possible and a top reason why people are attracted to the book) but also rich in terms of every aspect in life: relationships, health, work etc. Most people attempt to find success by looking outwardly: to external factors such as other people and circumstances.Or they believe that they cannot change their own circumstances and use this is an excuse not to. I've written about this in recent posts but I believe that the main factor in how successful someone is as a trader has nothing to do with talent. It's about how much the person is willing to do to become successful. "Think and Grow Rich" really backs this up with a series of anecdotes about famous as well as ordinary, unknown people, who found success using the basic principles outlined by Napoleon Hill. Every one of them, whether consciously or unconsciously, adhere to the 4 main principles of success: Desire, Faith, Action and Persistence.

Hill states that you must possess not just desire for what you want to achieve but a BURNING desire. That might seem like a trivial difference but in reality there is a crucial difference. I think almost everyone who gets into trading has a desire to make a lot of money, be successful and/or do it professionally. But I can guarantee you that it is only the ones who have a BURNING desire who actually succeed. We all know the success rate in trading. The 5%. If we go by this figure, 95% of traders have desire to succeed. Which means the desire isn't strong enough. If it was, they WOULD be successful. No ifs, ands or buts. Well, that's not quite true actually. Because you also need to believe you can be successful.

I know traders who have that burning desire, usually because they are driven by their current circumstances not being good and really want to improve their life but deep down, they don't really believe they will succeed. They have a negative mindset. When that is the case, it usually means that the first sign of failure (and in trading, that is a 100% certainty to happen at some point) they give up. "Well, I didn't think I would be successful anyway and this loss just reinforces that, so why bother?". Every successful trader at first had to have faith that they would succeed. Not "might" or "maybe" but "definitely". It's OK to have doubts, perfectly natural that you will but you still have to believe for the majority of the time, that you will ride through the rough times and definitely get there eventually. I always knew I would be a successful trader. I didn't know at what point it would happen, I knew there would be setbacks and tough moments but I always had faith in myself and that it would all work out in the end.

This faith, twinned with desire, then makes it almost a certainty that you will be driven to action. This is the real meat of it all, where you make plans and get to work on them to produce the results you want. In trading terms, this is where you'll do your research, test strategies, analyse the market, read about psychology and dive deep into learning trading inside out. This can actually be a lot of fun and most of you reading this will have got to this stage. But unfortunately, most of you will be beaten by the 4th and final stage: persistence. In other words, you will give up.

Ladyboys (yes, they are!) - absolutely nothing to do with  sexual transmutation.

 Once the first bank is busted, most people never go back, too burnt by the experience. A sizeable proportion will refill the bank and give it a second shot but will eventually lose it again and give up. The number of returning traders gradually decreases until only a small band are left grinding it out. They might not lose any money but the majority of them will also give up, fed up of treading water or not getting the huge returns they desire. That just leaves a small but hardy band - the 5%. The ones who refuse to give up. The ones who always find a way to build that bank again for another shot, no matter how long it takes. The ones who never blame the market, or the software, or the players or other people in the industry. The ones who only say "How can I improve? How can I learn from my mistakes?". The ones who tweak their plans till they get the desired outcome. The ones who have absolute faith in themselves. The ones who have a burning desire to succeed. The ones who understand that they control their own destiny.

Of course, it's not as simple as just applying those 4 rules. Most of us have limiting beliefs in our subconscious (which I delved into in my previous post) which make it very tough to make headway with trading. Napoleon Hill talks about how this can be overcome and uses concepts which at the time were revolutionary but that today are widely used yet still often frowned upon as being "new age" or "woo-woo". I'm talking primarily about hypnosis and meditation (which he refers to as "auto-suggestion"). I consider the two inter-changeable and that it's actually visualisation that is the most important aspect of both. It's something I do every day and I can only speak from personal experience (although if you read about pretty much every well known successful person in the modern era, they almost all meditate/visualise regularly) but it does work. Hill even talks about sexual transmutation, which does seem at first a bit out-there but really makes sense when you break it down: stop wasting your time jacking off to porn/chasing women on Tinder and use that time and energy to achieve something meaningful! Nicola Tesla remained a virgin his entire life and look what he achieved! Might be a bit too extreme for most men, granted!

I was initially put onto this book by Mark Iverson, who mentioned on his blog what an important factor this was in his success. Unfortunately, I only skimmed through it, believing I was doing fine and some of the concepts inside were a bit too weird for my liking. A few years later, I came back to it, read it thoroughly and crucially with an open-mind and applied the concepts with absolute faith. My profits sky-rocketed. That's all you really need to know.

Saturday, 26 November 2016

Money Doesn't Care What You Think!

Two years ago I wrote a post called "Guilty", where I explained how making large sums of money had triggered a guilty conscience within me. I began to ask myself the question "Is it morally OK for me to earn such huge amounts of money, when millions of people across the globe are living in poverty or working long, back-breaking hours whilst often contributing far more to society than I am?". It seemed at the time that I was pretty much answering my own question. There was no way I could justify what I was doing in the context of how valuable it was to society as a whole. I was struggling to find any kind of personal solace from my work as a trader. It bugged me enough to consider giving up trading altogether.

Since then, I've had a complete u-turn on this belief. In fact, I now realise that this was a limiting belief that was stopping me from being even more successful financially. I went through a period of deep introspection, where I basically pulled apart all of my views about the world: from perceptions of myself and other individuals and groups of society, to my views on major topics such as religion, race, science, politics and history to deeper views about the very nature of humans and our role in the universe. You see, I thought I pretty much had it all sussed. I considered myself to be well educated and had a staunch view on almost every subject that was fairly unlikely to shift without very strong evidence to the contrary. Yet at the same time considered myself to be extremely open-minded and non-judgmental. But once I started to dive deep into my thought processes and belief systems, I soon discovered that I was not as open-minded or non-judgmental as I thought. In fact, I found out that I had dozens and dozens of beliefs that were  not totally my own but appropriated from other people and were often totally misguided, downright wrong or worse still, limiting my capacity for growth i.e. they were screwing up my life!

Most of what we believe doesn't come from any objective research, where we actively study both sides of an argument and come to an unbiased conclusion. It comes from snippets of info here and there, often from biased or misinformed sources or from the same people (friends, family, work-colleagues, media outlets) who often have the exact same outlook as we do. Or they were forced upon us as impressionable children and become "fact" because that's all we know or because we automatically trust those closest to us. This is how religion is passed down from generation to generation. Very little to do with choice. Religion is almost always an unchallenged belief passed down automatically from parent to child. Pull apart all your beliefs that you have about the world and yourself and you'll no doubt discover most of them began in your childhood. You'll also discover that many of them have little reasoning or logic behind them and are actually damaging you.

One of my biggest limiting beliefs was around money. As an adult, I saw that occasionally I was getting labelled as stingy (usually by women!) and whilst I would always deny it and go to great lengths to argue that I had to be careful with my money because I didn't have much, I knew that deep down, I was always very conscious about how much money I had. I would obsess over silly little things, such as searching around for hours online just to get a product a few extra pennies cheaper, or timing my round on a night out to make sure that I had bought at least the same number of drinks (or less!) as everyone else. I didn't want to be like this - it wasn't fun and any satisfaction I got from saving a couple of quid soon evaporated. And I never seemed to have much in my  bank account no matter how much I scrimped and saved. But I now realise that I acted this way because I had a belief that I had to be cautious with money.

You think this money cares what you think?! Hell no!!

When I delved into where that came from, it didn't take long to settle at my father. He's one of those people who'd pick empty toothpaste tubes out of the bin that you'd thrown away because, if you struggled for 10 minutes squeezing the flattened tube with every fibre of your being till your fingers bled, you could probably still get out a pea-sized amount of paste for one last brush. But then, he is part of  a generation that grew up believing that we live in a world of lack and that it is noble to save and not waste anything no matter how small. I was always acutely aware that my family didn't have much money growing up and so was super conscious not to ask for any expensive labels or demand much for birthdays. This stayed with me right up to the years when I began trading and I believe were a key reason that I struggled for so long accepting losses. But even more so, I believe that when I did start becoming successful, they placed a ceiling on what I could accrue because I started to feel guilty. Once my limiting self beliefs about money were eradicated, I no longer felt guilty and my trading hit new levels of prosperity after that.

You see, money doesn't care what you think of it! Too many of us are too heavily invested emotionally with money. We don't understand what money really is, which is a piece of paper with a number written on it that serves a function. That's it! But when most of us think about money, we think about what we can buy with it: a house, a car, a smartphone, a holiday, a month's rent, pay off debt etc. So we are invested emotionally in the money. When you see that trading bank decreasing, that red figure getting larger on your screen, you are more than likely thinking about the things you wanted (or worse, NEEDED) to spend that money on. You have too much emotion invested in it. But it stems from a limiting belief about money, which is that money is more than just a piece of paper serving a function (to eliminate the need for a barter system).

Many people see money as the be all and end all of life. They treat it as a commodity, which it isn't; it's a tool which can help you to get commodities. They see it as the answer to all their problems, the one thing that will make them happy (which it definitely won't on it's own, although it can help get you closer towards happiness). Then there's the opposite end of the spectrum: those who see money as negative. They see it as something which you have to be ultra careful with because it's scarce, finite and tough to get (none of which is true). They may think they don't deserve to earn large sums or even fear having the responsibility of looking after it. They use sayings which are ubiquitous in society such as "Money is the root of all evil" and "Money doesn't grow on trees" and what they build is a self-limiting mindset which becomes stuck in their subconscious. And that controls +95% of what you do, so you are pretty much screwed! The sooner you realise money doesn't care what you think about it, the sooner you'll acquire more of it.

Once I realised that money isn't scarce (in fact, it's abundant), I started to change my beliefs. Once I realised that being stingy and scrimping and saving were not as necessary as I was making it out to be, my habits started to slowly evolve. Once I realised that rich people are not all morally bankrupt scammers and being wealthy is a blessing, I began to believe that I could make large sums of money. Once I realised that the more money you have, the more you can help others by giving to charity, being more generous with friends or building a business based on philanthropy (which is what I'm going to be doing in future) it got rid of all my guilt and opened up the flood-gates in terms of the amount of money I was making. Without those limiting beliefs, my subconscious was no longer holding me back and so my trading actually improved. And without that, I couldn't now be working towards something that is truly rewarding and gives me greater pleasure than any material thing I can buy.

Friday, 18 November 2016

Fear of Muslims and Fear of Markets

Fear is the most destructive force on the planet. Fear creates war: fear of other nations, other governments, other races, other religions. Fear separates and divides humans: fear of something different, fear of the unknown. Fear prevents people from achieving their dreams: fear of failure, fear of not being good enough, fear of moving out of their comfort zone. Fear prevents people from trying new things and taking on new opportunities, being spontaneous: fear of rejection, fear of embarrassment, fear of losing face. Fear prevents people from becoming a good trader: fear of red screens, fear of being wrong, fear of not making enough to satisfy friends (or forumites!), fear of the market. It all boils down to this one emotion. Think what could be achieved without it. You see, most of what people are fearful of is nowhere near as scary in reality. There's nothing to fear but fear itself.

These days, so many people (particularly in the west) live in fear of Muslim extremists. But in reality, how many people have been killed by Muslim extremists outside of the Middle East? Obviously any number is bad but some act as if it's happening every week or month in their country, when it clearly isn't. Some people fear Muslims to such an extent that they would like to see a total ban on them entering their country! In the United States, more American civilians have been killed by gun-toting US nationals on mass killing sprees than by Muslim extremists on the whole planet put together! Many thousands more Muslims have been killed by Islamic extremists than any other group by race, religion or nationality. If anything, it's other Muslims who have most to be fearful of! So why are people in the western world so fearful?

Of course it's only natural to have some fear: these people can strike unexpectedly at any time. But the levels of fear have been ramped up to obscene levels by the media and governments. It's our job to stop and think more rationally about things. The chances of any of us being killed in such an attack are tiny. But what the fear does is more than just make us worry, it makes us behave negatively towards others. Now that's the real issue here: people building up hatred and division, demonising entire sections of society for often tenuous links to a tiny minority of nasty people. This is what is happening to the Muslim community. Yet it's so absurd when you just stop and think about it.

If Muslims were all so evil and wanted to destroy western civilisation, trust me, we'd all be dead by now! There are over 2 billion Muslims. If they really wanted us erased from existence, they could do it easily. People tend to forget about the millions of Muslims living outside of the Middle East. Indonesia, for example, which has the largest Muslim majority population in the world - all living relatively peacefully. When's the last time you heard Indonesia or Indonesians mentioned in regards to Islamic terrorism? India, China, Indonesia and Bangladesh have 4 of the 5 largest Muslim populations in the world, yet of that top 5, most people would only associate the other nation (Pakistan, 3rd largest) with being Islamic or having obvious links with terrorism. None of these countries are even in the Middle East!

But I believe this fear begins from a personal perspective. So many of us are living our lives in fear because we are afraid to go for what we really want. The dream job, the perfect partner, the life-changing trip abroad, the move to another town, the activity or hobby that fulfills us. So many of us are stuck in a rut, often disguised as a "comfort zone", which we want to get out of but fear of losing that relative comfort prevents us from doing so. So we are doomed to a life of mediocrity and regret because we won't take a risk. And pretty much all good things that happen in life, come from taking some sort of risk.

The same can be applied to trading. That fear of taking a risk, which is the only real way to be successful at trading, means that the vast majority will fail. I saw it time and time again with students in my academy. People want to make vast sums of money but aren't willing to invest the necessary time or take on large enough positions or prices, in order for that to happen. Instead, they try to scratch around for pennies, dipping their toe into the market for a matter of seconds before jumping out in fright and expect to be a millionaire in a matter of months. Or they wait to see which way the wind is blowing before jumping onto a steam-train which has already left the station and is about to judder to a halt, too late to earn anything significant. Or they won't put the hours in, thinking a couple of trades a week will give them the experience required. No successful trader ever got there without taking a risk: in deciding to give trading a try, giving up their free time, not giving up till they achieved it and in doing things differently to the majority of the market.

The best traders understand that risk is a necessary evil and that to take on risk, you can't be fearful. In fact, if you take on risk in the correct manner (with a strong risk-reward ratio in your favour and a clear exit strategy) then you have very little to fear in the first place. Nothing at all if you've made the crucial step of trading with money that you can afford to and ACCEPT that you might lose. It's only when you start to see losses as a fearful situation, rather than a necessary and unavoidable part of trading, that traders start to behave irrationally and make errors. It's not the situation that causes the problem  - it's the fear that an individual ASSIGNS to the situation. And that is a choice that every individual makes. You choose to assign fear or you can choose to assign something more neutral or even positive to the situation. It's ALWAYS a choice. Just as it's a choice to fear another race or religion or culture or nationality.

Once you understand that the power is totally within you to decide, you will be in an almost unstoppable position.  Many people don't understand this though. They believe that external factors (such as someone shouting at them or the market flipping the other way) are responsible for their emotional response. That they have no control over that response because something or someone else was to blame. "They made me angry". But the truth is only YOU can make yourself angry or fearful. Many don't want to be told this truth because it means they can't blame anyone else and they want to have excuses for why they can't do this or that. No one is at fault, the blame game helps no one. But there are no legitimate excuses. If you want to be a successful trader, others out there are already doing it and they are no different than you. If you're not a successful trader, that is your choice (or you're on the way to becoming successful). Hearing that will upset some people but actually, it's the most positive thing you could discover because it means the power to get what you want is entirely in your own hands. It's just how much do you want it?

Saturday, 12 November 2016

Trump?! What the FUCK?!

This seems to be what most people are thinking this past couple of days. You can say that these are strange times in which we are living but in my opinion, there has never been anything but strange times! The whole world has been messed up for a very long time, certainly since humans have had the ability to record history, going back 5,000 years and who knows beyond that.  It would be nice to think there was a time when the human race lived in complete utopia (and some believe there was) but to think that this was any time in living memory or in recorded history, is a total fallacy.

Trump was elected with the slogan "Let's Make America Great Again" but when exactly was America great? Certainly not for the first 100 years, as no nation that allows slavery can be considered "great". The African-American Civil Rights movement didn't bring equal rights to all citizens until the late 1960s. So when was America truly great? The 1970s, when they destroyed Vietnam? Perhaps the 1980s when de-industrialisation took hold that was to eventually become probably the deciding factor (with the white working class in key swing "rust-belt" states demanding change) in Trump's "shocking" victory? It certainly is too recent to be the 2000s, though further destruction of Middle Eastern nations beginning in this period would make that a moot point anyway. And with mass shootings and police brutality and murder highlighted every passing month, it sure as hell ain't great now. But Trump would agree on that.

The United States has never been truly great. Only in theory and ideals. Even its claim to be the leading example of a democracy can only really be laughed at when you consider that more people voted for Hillary Clinton (winning the "popular vote") than the racist, homophobic, misogynist - yet here we are, with a man who once bragged about grabbing women by the "pussy" and who thinks it's fine to ban an entire sub-section of society from entering a country, as leader of the "free" world.
This is courtesy of an archaic electoral college voting system that makes absolutely no sense in the modern day. Even the phrase "the popular vote" is farcical. What does it even mean? Surely the whole point of true democracy is that the most popular vote should be taken as the true representation of what the nation wants? As it was with Brexit. Yet isn't with the UK's own ridiculous election system!

Not that I don't get why people voted for Trump. Of course, Trump's rhetoric will have attracted all the racist, homophobic, xenophobic scum, of that there's no doubt. But they didn't swing this election. It was that white working-class from the rust-belt that were decisive in the key swing states turning red when they had been blue for decades. When you have been neglected for decades and feel as though you have nothing to lose by going for something radical, why wouldn't you go for something that promised to shake up the status quo?

Clinton wouldn't have been my choice as leader, far from it. It's pretty obvious she's a very shady character and in my opinion, The Democrats lost this election  as much as Trump won it. If I was an American citizen (and thank god I'm not after all this!) I would have wanted Bernie Sanders in the hot seat but that was never going to happen because of the (also undemocratic) delegate voting system within the Democrat nomination process. And Sanders would have appealed to those disenfranchised rust-belt voters far more than Clinton and possibly Trump too. I saw an interview with a young woman who was asked who she was going to vote for. Her response was "I don't like Trump's comments about women but I love guns, so................" that just about says it all about Clinton's popularity! She is part of the problem, not only in the USA but all over Europe and the world: a rich, political elite who couldn't care less about the ordinary folks.

So it may seem as though I've turned into a cynical dooms-merchant in my time away from blogging. No sir, far from it! Quite the opposite. What I've come to realise is that this whole planet needs to take a step back and a deep breathe. We need to come together rather than divide ourselves over what are mostly superficial constructs, such as race, religion, nationality and political affiliation. At the end of the day, the vast majority of us, if not all of us, want the same thing - to be happy. And at its core essence than requires one thing: to love and be loved. Those who realise this, know that the changes required for this to manifest cannot come from a political party, or the economy, or even from the mass protesting we are now seeing from disgruntled Democrat voters. It can only come from within.

Every individual needs to look inside and seriously dissect themselves to find out what the hell they are thinking and doing and why! Real global change will only happen when enough people start to wake up to this fact and wake up to the reality of the world. Me? I've already done that. I used to be one of those angry political types, obsessed with the latest news to the point where it became entertainment to row over the latest disaster. Politics tends to bring out the worst in people in my opinion and those who let it dictate their mood, actions and ability to empathise with anyone of a different viewpoint, are as bad as the most myopic, tribal football fan.

So I refuse to feel downhearted about Trump's presidency. He's in: deal with it. Brexit has been voted for: deal with it. How do I do that? I control the only thing I know that I can definitely control in my favour - my own reaction. My own thoughts. My own actions. So even though I don't particularly like what's happened politically this year, it doesn't bother or affect me because I choose not to let it. It's that simple! Getting angry and fearful or hateful isn't going to change anything and it certainly isn't going to do me any good personally. The only thing to fear, is fear itself. It's a powerful force and once it takes hold, well, you get pretty much all the problems we now face globally.

Ultimately, I have the power to create the life I want, regardless of who makes the political decisions. That's why I chose to work my socks off until I became successful at trading. I made the choice to never give up and to keep trying no matter what obstacles were thrown in my path. Because I had the power within me to make it happen. Just as everyone else who has a broadband connection can do. No excuses. And you can make that same choice when you are actually trading. It's your choice to get angry when the trade turns against you. It's your choice to react negatively when a player doesn't do what you want them to. It's your choice to give up and say it's rigged or impossible to win long term or blame others for your failure.There's only one surefire way to be successful in life as well as trading - to take responsibility for your thoughts and actions, search deep within and react positively. Works every time.

So I wish Trump good luck. I hope he does make America great. Not great again, just great. That means for everyone, not just those of a certain race or background. But it won't happen through pedaling more fear, scapegoating sections of society and stirring up hatred. He's already showing signs of being conciliatory. But it'll take a lot more than that to heal the wounds of division which he is in part responsible for.