 Welcome back to the Trade Hacker Mindset. In this episode, we are going to be continuing with a discussion topic from the book, Trading in the Zone by Mark Douglas. In the last episode, we started our topic of thinking like a trader. That was part one. In this episode, it's thinking like a trader. Part two. Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker Mindset. All right, so let's get back into our topic of thinking like a trader. Part two. And we're gonna be discussing the process of self-discipline. So Mark Douglas defines self-discipline as a mental technique to redirect, as best we can, our focus of attention to the object of our goal or desire when that goal or desire conflicts with some other component or belief of our mental environment. Now, the first thing you might notice about this definition is that self-discipline is a technique to create a new mental framework. It's not a personality trait. People are not born with self-discipline. In fact, when you consider the definition, being born with discipline isn't even possible. However, if it's a technique that can be used in a process of personal transformation, then anybody can choose to use self-discipline. Let me give you a personal example. So about 10 years ago, I would say, 10 or 11 years ago, I was pretty out of shape, right? I was getting a little heavier than I wanted. I was lazier than I wanted to be. I would find myself watching more television than I wanted to. And this is after being a pretty active person when I was in high school and college. I played high school football, high school baseball. In college, I worked out a lot, played intramural sports, and was always pretty active. So I had this desire that I wanted to get back in shape. I wanted to get back to an active lifestyle. So to do this, my first step was I decided that I was gonna start running. And so I'd get out and I'd try to go for a jog and this jog ended up kind of being a half-jog, half-walk for a mile or two. I mean, it was pretty insignificant. And this went on for months and months. I could never really get myself to do more or, most importantly, be very consistent. I might do it once a week or twice a week or then skip a couple of weeks. So I was never pushing myself to further distances to really get myself in shape and I was not doing it consistently. And at one point, it really occurred to me that from my sports days in high school and college, it occurred to me that if I didn't have a goal to work towards, then my desire, no matter how strong it was to get in shape, was not going to overpower my desire for all the distractions or excuses that I had for not doing it. So even though my desire to get in shape was very strong, what does that really mean if there's nothing, if there's no end goal to get to a point of getting in shape? Getting in shape is a very abstract term. There's no defined level of shape I was trying to get into. I just wanted to feel better. I wanted to look better. I wanted to be more active. So around this time, I was talking to a friend and she was actually getting ready to start training for a half-iron man. And so if you know what a half-iron man is, it's a triathlon. It's a 1.2 mile swim followed by a 50 mile bicycle ride followed by a half of a marathon, which is about a 13 mile run. Now keep in mind, I had never done anything close to that level of an event. Most I'd ever run, I think was maybe a 5K, which is about 3.2 miles. And I had never been a swimmer. So I didn't really know how to swim at all. But for whatever reason, I decided, I told her, I was like, you know what, I'm going to do this. I wanna do this because I know if I have a goal like that, it'll help me in my discipline to actually get out and start working out and ends up being running, biking and swimming, which are all three obviously very good exercises. So now I had a goal. But here's the problem is that even though I had this goal in mind, I still had these other conflicting issues going on that I had to deal with. You know, every time I would go to work out to ultimately get to this goal of competing in this half Iron Man, you know, you had all the normal excuses, oh, you know, it's too hot or it's too cold out today or I'm still sore, I'm still tired from the day before and you had all these different conflicting issues to deal with that would still not allow me to be consistent and diligent in working out for this half Iron Man. So how do you deal with this conflicting mental energy? Well, you have to make your desire stronger than the conflict. And these conflicts are hard to deal with. I mean, I would tell you at least 50% of the time, I would find an excuse of why I couldn't go train that day. And I had this conversation with my friend and you know, she was definitely better than me but what we ended up doing is finding a very strict 12 week training program, building up and working, you know, had laid out exactly what we needed to do each day and built on it up until the point of when we competed in the event. And so now we had this schedule and having a partner like that, we committed to this schedule and by having that kind of joint accountability, it helped us, you know, get up in the morning. I mean, we were getting up in the morning at 4 a.m. and going swimming for an hour and a half and then we'd run for 30 minutes or we'd get up and run for an hour and then bike for an hour. So it was a very, and this was, you know, started off in small increments and it continued to build longer and longer duration of these different exercises. And one of the other keys that was really a big component of this, of getting me to actually do it, not only the accountability of having a partner, but also I started to tell people that I was doing this triathlon, that I was a triathlete, that I was doing this half Ironman. And so now I had people asking me about the training. How's the training going? How far are you running? How far are you biking? How far, how's your swimming going? Can you swim? You didn't drown, you know, those kinds of things. So that kind of also helped with creating this desire to become stronger than these conflicts. And eventually this conflicting energy started to dissipate. So to make a long story short, I is eventually, you know, we got on this schedule and trained and it's a big commitment. And it was a big, not only time commitment, but effort commitment and getting over these conflicts and ended up going to Colorado and competing in this half Ironman and was able to finish. You know, I didn't break any records by any means, but I finished and that was my ultimate goal. So now if you take these experiences and you put them into context of what we now understand about the nature of beliefs. Remember one of our past episodes, we talked about the nature of beliefs. So there are a few observations that we can make. Number one, initially my desire to run a half Iron, you know, be in a half Ironman had no foundation of support in my mental system. In other words, there was no other source of energy consistent with my desire, consistent with that goal. Number two, I had to do something to create this support. I had to believe that I was a triathlete. I had to tell other people that I was doing this event. I had to find a partner to keep me accountable. Remember that everything that we think or we say or we do, it contributes to this energy, to this belief in our mental system. And if we tell other people and then when people are asking us, it kind of tricks our minds, it tricks ourselves into thinking, yes, that's what we are. We are a triathlete. We are a football player. We are a baseball player. Whatever it is, whatever goal it is that you're trying to accomplish, you have to kind of trick your mind into believing that that is what you are. And when you draw energy to the belief that you are something, then that inadvertently draws energy away from those conflicting beliefs and starts to deactivate them. Now, when I was training for this half Ironman, I didn't understand this concept. I didn't understand the idea of conflicting beliefs or the nature of beliefs. So I didn't even have the techniques to do this. I'm just looking back and saying, oh, this is why I was able to do it is because I actually use these techniques without even realizing it. Number three, you've got to align your beliefs with your goals. So now I can say that, let's take it back to trading. I am a trader. Everyone that I know knows that I am a trader. And so you're aligning your beliefs with your goals and you're internalizing that and you are accepting that that is what you are. And number four, you've got to employ techniques to integrate beliefs. Beliefs can be changed. And if it's possible to change one belief, then it's possible to change any belief. Remember we talked about in the past episode, you wanna change your beliefs by understanding that you really aren't changing them, but you're just transferring energy from one concept to another. And this way to completely contradictory beliefs can exist within your mental system side by side. If you draw energy out of one of them and energize the other, then no contradiction exists from a functional perspective. The sole purpose of trading mechanically is to transform yourself into a consistently successful trader. If there's anything in your mental environment that's in conflict with the principles of creating the belief that I am a consistently successful trader, then you'll need to employ this technique or self-discipline to integrate these principles as a dominant functioning part of your identity. Once these principles become a part of who you are, you'll no longer need the self-discipline because the process of becoming consistent, it'll become effortless. Think about how many times you've seen somebody who's really good at something. Let's say it's a golfer. Think about if you're watching Tiger Woods on TV or some professional golfer in a tournament, it looks so effortless. And part of that is obviously a ton of practice, but a lot of that is they are golfers. They have driven themselves to become the best golfers in the world. And so now when they swing that club, it looks so effortless. And you might compare that to yourself if you're a golf hack like me where you're going out and you're gripping the club really tight and you're trying to muscle it and just trying to hit it really hard. It definitely doesn't feel effortless for me. And A, I don't think of myself as a golfer, but going back to trading, it's the idea of saying that you are a consistently successful trader and completely ingraining that in your mental process so that it becomes part of you and then becoming consistently successful, consistently profitable with your trades becomes completely effortless. For example, one of the things that you need to do in your trading is to pre-define your risk. That's part of being coming consistent as a trader. If it takes any special effort to pre-define your risk, if you have to consciously remind yourself to do it, if you experience any conflicting thoughts or if you find yourself in a trade where you haven't pre-defined your risk, then this principle is not dominant. It's not a functioning part of your identity yet. It isn't who you are. If it were, then it wouldn't even occur to you not to pre-define your risk. Once these sources of conflict have been deactivated, then there's no longer a potential for you to be any other way. So what used to be a struggle will now become virtually effortless. And when you get to that point, it might seem to other traders, to other people, that you are so disciplined, but the reality is that you aren't being disciplined at all. You're simply now functioning from a different set of beliefs that compel you to behave in a way that's consistent with your desires, goals, and objectives. All right, so creating a belief that I am a consistent winning trader is the primary objective, but like my intention to run a half Ironman, it's too broad, it's too abstract to implement without breaking it down into a step-by-step process without having a very disciplined schedule like I had to to train for that half Ironman. So let's break down this belief into very small definable parts and then give you a plan to integrate each part as a dominant belief. So as we break this down, this is gonna be seven different kind of sub-beliefs that build this thinking like a trader mental structure. So I would highly encourage you to write these down and write it in a way that is talking about you. So write down, I am a consistent winner because, number one, I objectively identify my edges. Number two, I pre-define the risk of every trade. Number three, I completely accept risk or I'm willing to let go of the trade. Number four, I act on my edges without reservation or hesitation. Number five, I pay myself as the market makes money available to me. Number six, I continually monitor my susceptibility for making errors and number seven, I understand the absolute necessity of these principles of consistent success and therefore I never violate them. So a couple of things that I have written down right here by my trading station is one is the five fundamental truths of trading. And if you don't remember what those are, go back to a previous episode, we talk about them in several different episodes. So I have those written down and you know what, I used to have these and I'm gonna do this with you. So I'm going to rewrite these down and I'm gonna keep them posted by my computer and refer to them every morning before I start trading. I think it's critical to get in that mindset before you start trading every morning and get these seven sub beliefs ingrained in your brain. And this will help you start thinking like a trader more and more to the point where it becomes fairly effortless. So the first principle of consistency is this belief. I objectively identify my edges. The key word here is objectively. Being objective means there's no potential to define, interpret, and therefore perceive any market information from either a painful or euphoric perspective. The way to be objective is to operate out of beliefs that keep your expectations neutral and to always take the unknown forces into consideration. Remember in a previous episode we talked about be very strict in your rules and be very flexible with your expectations. Be very strict with your rules but flexible with your expectations. Most traders do the opposite. They're flexible with their rules. They break the rules all their time but they're very strict on what their expectations of what the market owes them. You've gotta be the opposite. Be very strict with your rules, flexible with your expectations. Because remember from the market's perspective there are always unknown forces that are going to put pressure on price movement one direction or another and these are unknown. Therefore from the market's perspective every moment is unique. We've talked about this a lot. Even though the moment may look or sound or feel exactly the same as what we've seen before as some moment in the past, every moment is unique. The instant that you either decide or assume you know what's going to happen next you will automatically expect to be right on that trade. However, what you know at least at the rational level of thinking can only take into consideration your unique past, which may not have any relationship to what is actually happening from the market's perspective. Any market information that's not consistent with your expectation has the potential to be defined and interpreted as painful. So to avoid experiencing this pain your mind is going to automatically compensate with both conscious and subconscious pain avoidance mechanisms. And to avoid this pain you're gonna become susceptible to committing all the normal trading errors, hesitating to get in, jumping the gun, jumping into early, not pre-defining your risk, letting a loser turn into a bigger loser, getting out of a winning trade too soon, not taking profits from a winning trade, letting a winning trade turn into a losing trade or the worst trading too large of a position relative to your account size. The five fundamental truths about the market will keep your expectations neutral, help you focus your mind in the now opportunity moment, the now opportunity flow, and therefore it'll eliminate your potential to commit these errors. And when you stop making these trading errors you'll start to trust yourself. You know, I know I can remember specific times where I kind of lost trust for myself because I would make these stupid errors, either I'd put on a position size too big or I would let a loser that I should have cut off and been just a kind of a normal losing trade, let it snowball into this massive loss, and I would beat myself up. I'd be like, you freaking idiot. Why did you do that? Again, you know, and that kind of thing. So you start to lose trust in yourself. So when you lose trust in yourself you also lose trust in your self-confidence. And not only do you lose self-confidence but you lose trust in the strategy or you lose trust in the methodology or you lose trust in your edge. And then it can get you on this cycle of going to look for a different strategy or look for a different indicator. But all of it is right between your ears. It's based on your decision-making process. These five fundamental truths will also create a state of mind that will help you genuinely accept the risk of trading. When you genuinely accept the risks you'll be at peace with any outcome. And when you're at peace with any outcome you'll experience a carefree, objective state of mind where you make yourself available to perceive and act upon whatever the market is offering you from its perspective at any given moment. All right, so here's your challenge. How do you align your way of thinking with the market? How do you transform yourself into a person who can consistently think from the market's perspective? The process of transformation starts with your desire and your willingness to refocus on the object of your desire, your goal, your self-discipline. Desire is a force and it does not have to coincide or agree with anything that you currently believe to be true about the nature of trading. If you have a very clear desire, if you have a very clear goal, a very clear objective, this is a very powerful tool. You can use the force of this desire to create an entirely new version to your identity. You have to accept this though. You have to shift that energy between these conflicting concepts. You have to change the context of these things from negative to positive. If there's enough force behind this desire, behind this objective, it's possible to experience a major shift in our mental structure virtually instantaneously. It really just comes down to making up your mind. To deactivate these internal conflicts, it's not a function of time, it's a function of desire. Now it can take a considerable amount of time to get to the point where we really want to make up our minds. Otherwise, once you make up your mind, you can make this happen in a very short period of time. To even start this process, you have to want consistency so much that you are willing to give up all other reasons, all other motivations, all other agendas that you have for trading that are not consistent with the process of integrating the beliefs that create this consistency. A clear, intense desire is an absolute prerequisite if you're going to make this process work for you. I hope this episode was helpful. If you want to join a community of like-minded traders, just go to community.navigationtrading.com. That's a link that is an invite to our Discord community. It's free to join. We have hundreds of traders interacting on a daily basis, not only about the mental mindset and support, but also sharing trade ideas with the sole purpose of helping each other become better traders. I look forward to seeing you on the inside and I look forward to seeing you at the next episode. See you then.