 Welcome back to the Trade Hacker Mindset. We are going to be continuing with our discussion of topics from the book Trading in the Zone by Mark Douglas and in this episode we're going to talk about the market's perspective. 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. Okay, let's jump into our discussion of the market's perspective. So in previous episodes we talked about kind of your normal, your typical traders versus the best traders in the world and some of the differences between the two. For the most part, a typical trader's perception of risk at any given trading time or situation is really a function of the most recent two or three trades that that individual has taken. However, the best traders in the world, they don't really have any, there's really no impact on them and either negatively or positively by the outcomes of their last few trades. So for the best traders, their perception of risk of any given trading situation is not affected by their personal psychological variables. And this is a huge gap between the best traders and the typical traders that might make you think that the best traders actually have this inherent design in their minds that accounts for this gap. But that's really not the case. You see, every trader, no matter how experienced or how intelligent or how many years they've been trading, everyone can learn to rewire your mind to stay properly focused and stay in the flow of the market. Now it's not easy and it's a pretty universal problem amongst a lot of traders, but it has to do with the way that our minds are wired and the common social upbringing that we've found ourselves in throughout the course of our lives. So there are a lot of factors relating to self-esteem that might act as obstacles in your consistent trading success, but what we're going to talk about now is by far the most important fundamental building block to your success as a trader. And that fundamental principle is what we call the uncertainty principle. Depending on where you are in your trading journey, you've probably been trying to find this so-called secret to trading. What's the secret? Is it a magic indicator? Is it a magic guru who just has this inside information? What is this secret? Well, these four things are actually the secret that are part of this uncertainty principle. So, write these down, internalize these things and take these things very seriously. Number one is to be able to trade without fear or overconfidence. Number two is the ability to perceive what the market is offering from the market's perspective. Number three is the ability to stay completely focused on the now, moment, or opportunity flow of the market. And number four, the ability to spontaneously enter this zone, which is basically an unshakable belief in the uncertain outcome that you have with an edge in your favor. Now, we're going to talk about this a little bit more in depth in a future episode, but think about it from a casino's perspective. If you're a casino owner, you build your entire value proposition. You build your entire financial model. You build your entire profit model on the fact that gambling is an uncertain event. But if you have an edge, then you know over time that when you have a number of occurrences over and over and over, the casino knows that they are going to be profitable over time. So this idea speaks to the fact that we want to become the casino and think like a casino and not the gambler. Remember the best traders in the world have evolved to a point where they believe that without a shred of doubt or internal conflict that anything can happen in the market. And they don't just suspect that anything can happen. They have a deep rooted internal belief that they know that anything can happen. And when you have this deep internal belief that anything can happen, you understand that just the most recent trades, whether they're winners or losers, have absolutely no impact on the outcome of your trading over many occurrences. And when you have this type of mindset, it creates this flow. It creates this now moment. It creates this zone. And when you're able to prevent this association of the most recent trades by doing this, you're able to keep your mind free of this unrealistic and rigid expectations about how the market will express itself. So it gets you to the point where all you're doing is making yourself available to the market information. And then you're taking advantage of those opportunities whenever the market presents that information to you. So when you have this mindset of making yourself available, this is a perspective from which you understand that the framework from which you are perceiving information is limited relative to what is being offered. Remember, our minds don't automatically perceive every opportunity that presents itself in any given moment. Think about times that you've been in a trade and you've just been focused on your P&L or you've just been focused on some other aspect or distraction or you're trading out of fear or euphoria. And then as soon as you get out of the trade, you take a step back, you look at the charts and you're like, oh my gosh, I mean, that is just an absolutely clear, perfect trend. But you don't see that until you're already out of the trade. I mean, I can't even count how many times that's happened to me in the past. You see, sometimes there are opportunities that are invisible to us because we haven't learned to make the distinctions that would allow us to perceive them. Remember what we talked about a few episodes ago when we talked about remember the first time before you, you know, when you very first started trading, remember the first time you saw a price chart. And remember what you thought when you first saw that price chart. It probably didn't mean a whole lot to you. But if you looked at the exact same chart today, it would mean something totally different because of your knowledge of the markets or because of your perceptions of the markets or because of what you've learned about the markets. Now it would create a situation where you would probably form an opinion about the direction of that market. But when you first saw that chart, all your thoughts and feelings and perceptions of the market were invisible back then, but are now completely clear. So for example, you've built a mental framework that allows you to recognize a certain set of variables in the market's behavior that indicates when an opportunity to buy or sell is present. So this is part of your edge and something that you know. However, keep in mind what you don't know exactly how this pattern or variables will actually unfold. But with the perspective of making yourself available, you know that your edge places the odds of success in your favor. So this specific time it may not work out, but your edge over time, over many occurrences, will work out profitably in the end. So just like you learned something about the markets, just like you've learned something about these price charts that you didn't know when you first looked at them. Not only can you learn stuff about the markets that you didn't previously know, but you can also set up your mental condition to be most conducive to entering this zone that we all want to be in. So what does it actually mean to be in this zone? It's basically when your mind and the market are in sync. I mean, there are certain days when I come in and start day trading specifically because in day trading, because of the way that things move quicker, the psychological things that we're talking about, the mindset issues are just exponentially increased. And so, I mean, there are definitely certain days when I just feel in that zone. There's days when I feel in sync with the market. And there's other days when I'm just butting heads with the market. I feel like I'm just working against it, no matter what I do. It's kind of working against me. But remember, that could just be a situation where that just happens to be the day that I might have some losing trades that are a small percentage of the winning trades that I have over time. And again, it's not like the market is working against me. It's just a mindset thing that I just haven't happened to not be in the zone that day. I happen to be not in sync with the markets that day. And that's okay. That's called being a human. But we do want to set up our environment so that we can get into that zone as much as humanly possible. So there are really two mental hurdles that we need to overcome. The first is keeping your mind focused in the now-moment opportunity flow. So in order to experience this sync, your mind has to be open to the market's truth from the market's perspective, not from your perspective, from the market's perspective. The second hurdle has to do with the division of labor between two halves of our brain. So we've got the left side of the brain with the rational side. And we've got the right side of the brain that's creative and wants to take action based on inspiration, based on intuition, based on a hunch or a sense of knowing something that can't really be explained at a rational level. So there's an inherent conflict between these two sides, the rational, the logical versus the creative. And then there's this battle between the two. And you've got to be able to start to accept and trust both. So the question is, how do you stay creative but act rational at the same time? So here's the objective. To become a successful trader, you must develop a belief in uncertainty. And I'm not talking about just kind of believe that, yeah, I understand things are uncertain. I'm talking about a deep understanding, a deep belief, an unshakable belief that the market is uncertain. And the first step to getting to this objective is to get in sync with the market by completely accepting the realities of trading. And this step is really where most of the frustration and disappointments and kind of the mysteriousness associated with trading actually begins. And this is one thing that's going to separate the best traders from the typical traders is because very few people who decide to trade ever take the time to expand the effort to think about what it means to be a trader. You see, most people who go into trading think that being a good trader is the same as being a good market analyst. And we already talked about in the past that some of the worst traders are actually market analysts. Remember, the market is an environment that has qualities and traits and characteristics that are completely different from what we're used to. And it requires to make some adjustments. If we're going to operate effectively in this market that has no boundaries, we're going to have to make it to some adjustments to our mind, to the things that we do to start to become familiar with this environment. Think about if you travel to an exotic place. One of the first things you're going to do is you're going to start to want to try to understand the culture. You're going to want to start to understand the traditions and the customs. And that's going to kind of help you get into a little bit of sync, get at least get you a little bit familiar with that place that you've traveled. Well, it's the same thing with the market. Think of the market as this exotic jungle. Well, you've got to kind of figure out and understand how the market works and to adapt to that environment. And so a couple of reasons why you need to adapt is because, one, think about this. Actually putting on a winning trade takes absolutely no skill. Anybody can click a mouse, buy a stock, sell it at a higher price and claim that they're a trader because they made a winning trade. So it takes no skill of any kind to actually put on a winning trade. The second is that trading can be done in our normal personal environments, right? We don't have to go anywhere. We can sit on our couch in our living room with our laptop and place trades in our normal environment. So the fact that we can just take trades and place trades in our normal environment, it almost makes you think that you don't have to adapt. Like it's not a new environment, but you really do because even though we're trading in our own physical normal environment, we're in a completely different headspace that we have to adapt to. So to some degree, you're probably already aware of many of the fundamental, the psychological characteristics about the nature of trading, but having an awareness or an understanding versus actually having a deep belief are two completely different things because when you actually believe in it, when you actually accept it, completely accept it, then it won't be in conflict at all with any other component of our mental environment. Because when you believe in something, when you truly believe in something, you operate out of that belief and it's natural and there's no struggle, there's no extra effort. So if you're having any kind of a conflict in this environment, that just means that the degree that you are having this conflict, that means there's a lack of this acceptance. And so hopefully you're starting to see not as many people make it as successful traders because they haven't really truly accepted this risk, they haven't truly accepted this belief. And frankly, they just haven't done the mental work necessary to reconcile these conflicts that exist that what they may have not even been aware of. So in the next episode, we're going to dive into the topic of the market's most fundamental characteristics. I look forward to seeing you then in the meantime, if you want to join a community of like-minded traders, just go to community.navigationtrading.com. It's free to join. There's hundreds of traders interacting on a daily basis, not just about mindset, but sharing trade ideas with the whole purpose of helping each other become better traders. We look forward to seeing you in the next episode and we'll see you in the community. Take care.