cle, in my next lietime, I would like to be born beau-tiul and talented.” Let’s see, she is very artistic. My wie has become a proessional painter, but my nieceactually completed the initial art course aster thanmy wie did – she was so good. She also sings like anangel and coming rom a liberal arts background sheearned a degree in biomedical engineering, graduat-ing cum laude. I think she passes the talent criteria with ying colors. As ar as beauty, I would describe her as one o themost stunningly beautiul women I have ever seen.Everyone that meets her comments on how beautiulshe is. Here was an incredibly beautiul and talented woman, who because o her belies, did not think she had those qualities at all. Your reality is shapedby your belies. By the way, I have been working onthose belies o hers since she has been living here,and she is nally coming around. Who you are is shaped by your belies about yoursel.In addition, you do not trade the markets. Instead,you trade your belies about the market. One o thekey aspects o working on yoursel is to examine mosto your belies to determine i they are useul. I they are not useul, then nd belies that are more useul.Tis is one o the key aspects to working on yoursel. You probably will never be ree o limiting beliesand some aspects o sel-sabotage during your lie-time, but I consider this step to be complete whenyou transorm about ve very limiting aspects o yourlie and you eel very diferent about each. Once youhave accomplished ve such transormations, then Iconsider you capable o generally overcoming utureroadblocks that might come up in your trading.
Part II – Developing a Working Business Plan
Te business plan part o trading includes step one.In act, a good business plan includes a thoroughexamination o the person who is doing the trading– belies, issues, strengths, weaknesses, goals – every-thing you can possibly think o about yoursel shouldbe included in this document.However, the plan should also include many otherimportant things:• Your assessment o the big picture and how you will keep up with it. For example, I wrote aboutthe possibility o a huge secular bear market in2001 when I rst started working on Sae Strate-gies or Financial Freedom. I decided that the bigpicture should include3. Develop several strategies that t your view o the big picture and understand how each o thesestrategies will perorm under various market types.Te ultimate goal o this step is to develop some-thing that will work well under every possiblemarket condition. Actually, it is not that hard todevelop a good strategy or any particular marketcondition (including quiet, sideways). It is very dicult to develop one strategy that works wellunder all market conditions – which is what mostpeople try to do.4. Toroughly understand your objectives and de-velop a position sizing strategy to meet those ob- jectives. Probably less than 10% o all traders andinvestors understand how important position siz-ing is to trading perormance and even ewer un-derstand that it is through position sizing that youmeet your objectives. Tus, the ourth step is todevelop position-sizing strategies or each systemthat will help meet your objectives.5. Monitor yoursel constantly and work to mini-mize the number o mistakes that you make. Idene a mistake as not ollowing your rules. Tus,or many people who have no written rules, every thing they do is a mistake. However, i you haveollowed the rst our steps, you will have rules toguide your trading and you can dene a mistakeas not ollowing those rules. O course, when yourepeat the same mistake over and over again, thatis sel-sabotage. However, by monitoring yourmistakes and continuing to work on yoursel, youcan minimize the impact o such mistakes. In my opinion, someone who does this will tend to pro-duce consistent, above average prots.
Part I – Working On Yourself
Tis part o the program is so important because eve-rything you do is shaped by your belies – in act, yourreality is basically shaped by your belies. What is abelie? Every sentence I have written (including thisone) reects my belies. Every sentence that comesout o your mouth reects your belies and your be-lies shape your reality. Who you think you are isshaped by your belies.Let me provide an illustration o how that works.My niece rom Malaysia came to live with us whenshe was 19 years old (my wie and I were putting herthrough college in the United States). One day shesaid to me ater living with us or about a year, “Un-
DECEMBER 2008 / VOL. 4 ISSUE 12