Thursday, October 28, 2010

The Daily Note - The Madness

There comes a time when you know what you are doing is part madness, but are unable to stop. The answer to why is what has plagued many but knowing the answer does not necessarily lead to the act of change. Why again? Why indeed!

The answer: "Better the known evil than the unknown good" has long been used and it is totally accurate. It is why so many hold on to losing trades with hope rather than cut loss, do a flip for a more likely gain. But there are other reasons why people hold on: it's familiar. The known gives "comfort" the unfamiliar is mysterious it's comfort, not guaranteed. It's been reported that people who are relieved of pain after having suffered long with it, have trouble functioning and sleeping without it.

But knowing it, again, does not assist in changing the habit and it's why we keep electing and re-electing people into political office even if we know that they do a terrible job for us and waste our resources. Some who know of their habit, admit to it, others deny it and come up with false reasoning for their choice.

Hence the madness continues, unbroken with perhaps a tiny fracture here and there when sanity shines through only to go into hiding again, when we seek the comfort of familiarity once again.

It takes more than just positive reinforcement to make a change for our good. It also takes consistent reward but most of all it needs assurance. Assurance is faith based because it 's not a guarantee. Assurance is what we discover within us and upon seeking, receive from others when going through changes.

In life as in trading, you must recognize patterns and rid yourself of destructive ones lest they become your comfort zone of madness. For trading, it is good to make a list of habits you have and put them in one of two categories:one negative the other positive. Then filter each trade you have made with that list and see where the madness takes over in your trading style.

Then, seek assistance to change it. In today's world it's not really difficult to find. There are very good blogs, and books. More directly there is the StockTwits and Twitter communities where like people can find each other in need and support. And finally there are trading rooms and coaches where traders are very supportive of each other. I am proud to say that members in my room fit this category very well.

The pattern of madness breaks when we realize that we are all seeking the same thing: we all seek to become better at trading, living and dancing. So come and join us today for a step or two around the dance floor, offering good music and good trades without madness.

Happy Trading, Living and Dancing

The Daily Pick - VRTX

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