true relative to the possibilities that exist in the market at any given moment. Recall the example of the
boy and the dog.
The boy "knew" for an absolute fact that each dog he encountered after
the first was threatening,
because of the way he felt when one came into his field of awareness. These other dogs did not cause
his fear; his negatively charged memory working in conjunction with the association and his pain-
avoidance mechanism caused his fear. He experienced his own version of the truth, although that did
not correspond with the possibilities that existed from the environment's perspective. His belief about
the nature of dogs was limited relative to the possible characteristics and traits expressed by dogs. Yet
the state of mind he experienced eveiy time he encountered a dog caused him to believe thats he
"knew" exactly what to expect from them.
This same process causes us to believe that we "know" exactly what
to expect from die market, when
the reality is there are always unknown forces operating at every moment. The trouble is, the instant we
think we "know" what to expect, we simultaneously stop taking all the unknown forces and die various
possibilities created by those forces into consideration. The unknown forces are other traders
waiting to
enter or exit trades, based on their beliefs about the future. In other words, we really can't know exactly
what to expect from the market, until we can read the minds of all the traders who have the potential to
act as a force on price movement. Not a very likely possibility. As traders, we can't afford to indulge
ourselves in any form of "I know what to expect from the market." We can "know" exactly what an
edge looks, sounds, or
feels like, and we can "know" exactly how much we need to risk to find out if
that edge is going to work.
We can "know" that we have a specific plan as to how we are going to take profits if a trade works.
But
that's it!
If what we think we know starts expanding to what the market is going to do, we're in trouble.
And all that's required to put us into a negatively charged, "I know what to expect from the market"
state of mind is for any belief, memoiy, or attitude to cause us to interpret the up
and down tics or any
market information as anything but an opportunity to do something on our own behalf.
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