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YOUR PERSONAL TRADING SOFTWARE PROGRAMS
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In your personal trading software "file/' you have four differ­ent programs or "disks":

•  Self-preservation program;

•  Greed-structure program;

•  Confident trading program;

•  "Have fun" program.

Although you use all of them in daily living and trading, you can use only one at any instance (they can be switched very rapidly, however). In this section, we will look at the four pro­ grams in the order of the size of the group of traders using them on an average day in the market.

Your own individual belief systems will determine what software programs you run while trading the market. A later section presents a methodology for manipulating your own be­ lief system to improve your trading success.

To understand the market in terms of which software pro­ grams traders favor, we ran sample surveys of the trading pop­ ulation on both average and exceptional days. We found, for example, on an average trading day, 35 to 45 percent of the trad­ ing population were running their self-preservation program, 25 to 35 percent were running their greed program, 15 to 25 percent were running their confidence program and 5 to 15 percent were running their have fun program. Let's examine these programs individually and apply them to our own trad­ ing plan.

As noted in the previous chapter, the world is a mirror that tells us exactly which part of our brain we are using at the pres­ ent moment. We, in turn, by everything we do and say, tell the world which software program we are running. Let's look at each program, starting with the largest group of traders on an average day and working our way down to the smallest group. In taking this route, we are starting with the largest group of losers and working our way to the winners. Remember that most of us switch quickly from one program to another and an­ other, depending on developments, and that whatever program we are running at the moment determines our behavior and how we will present ourselves to the world and the market.

Self-Preservation (Fear) Program

On an average day, this is the largest group (35-45%) of traders in the market. The big mover within this group is fear. As fear traders, we demonstrate our concern with fear in everything we do or say. Whenever fear comes into our life, it propels us into the left hemisphere (our own in-house idiot), and our pri­ mary concern becomes protection.

The first physical signs of fear trading are: we start collaps­ ing in the upper chest area, and we start to slump forward. We are then in a poor position for trading: 44 percent of all our oxygen normally goes to the brain, and at just the time we need it (a perceived crisis), we are cutting it off. Why? The entire or­ ganism senses crisis, and our body responds by starting to­ ward a protective fetal position. Everything is done for protection, not profit. Our basic decision-making process is shut down in favor of frozen protectionism. If you are in a los­ ing trade and you find it difficult to get out, it is because you are running the fear program.

In this state, you will overlook opportunities for getting in and out and making a profit. This program resists any change, including getting out of a losing trade. The program has its valid purpose, but it certainly does not belong in the act of trading.

This is, by far, the most consistent of the four programs. Its drawback is you almost always buy the top and sell the bot­ tom—not a profitable strategy. I recommend keeping a diary of your trades and recording your feelings whenever you have a series of losses. From your diary, you can determine which part of your brain was being used when you initiated that losing trade. You will find that, most often, you were running this fear program.

In the methodology section, we will develop a procedure that makes use of this software's strengths to enhance rather than detract from our trading results.

Greed-Structure Program

On an average day in the market, about 25 to 35 percent of all traders are running a greed program and seeing the world through masses of dollar signs. A typical greed-structure com­ ment might go like this: "Say, that is a nice shirt you have on, how much did that set you back? If you ever need more of that kind, let me know. I know where you can get them wholesale."

While running this software, we are more interested in price than value. When the market moves, we know exactly what it is costing us or exactly how much we are making. This program makes us suckers for "get rich quick" schemes, and well buy underwater lots in Florida and $3,000 black box trad­ ing software. We are sucked in by computer backtesting and optimization. That is the bad side of this software.

On the good side, this software is the best for discovering the structure of the market. It is the best for seeing the Elliott wave, Fibonacci retracements, technical formations, and so on.

This is not good software to run while looking at the monitors. Its purpose, like the fear program, is in analyzing and getting ready to trade the markets.

Confident Trading Program

On an average trading day, about 15 to 25 percent of traders are running the confident trading program. They can be rec­ ognized by the air of assurance they have about making money and being in the market. Here are some behavioral in­ dicators that we are running this program: We want to make sure that everything is "appropriate." We say the right things, follow the right system, listen to the right advisers, wear the right clothes.

Users of this program tend to be name droppers and chronic interrupters. They communicate an urgent wish that you would finish telling your story because theirs is even better.

The important characteristic of running this program is that it exudes calm and sureness. There is little or no fear, and none of the damaging consequences of running the fear program. This is a noneffort program. You don't struggle to feel confi­ dent; in fact, if you struggle, you really can't feel confident.

Although this is a great program to use for trading, it isn't good for analysis. While running this program, we are literally "sharper and more intelligent" than when running any other program. We remember better and act faster.

At this level, we are beginning to use our core and our right hemisphere. The next program make even better use of those superstars.

"Have Fun" Program

This last and smallest group of traders (5-15%) are by far the most successful and happiest traders in the market! When you are running this program, you are interested in three things:

Sexual attractiveness;

•  Future promise;

•  New adventure.

These are the first traders to get into any new trend. This is absolutely the best program to consciously run while in the market. Like the confidence program, it is better at trading than at analysis. It is the opposite of the fear program: it is light, easy, and fun-loving. It creates a good time no matter what the situation. In this program, it is easy to change an opinion or a position in the market. Stopping and reversing are no problem at all. In the fear program, stopping and reversing are almost impossible. Where the "fear" program sees itself doing battle with the market, the "have fun" program sees it­ self being supported by and in sync with the market.

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