The Cybernetics Of Trading And Thinking

Cybernetics is a Greek term that means "steersman" or the man who controls a large boat with a small rudder. Today, that term has a scientific and market meaning: "leverage." It means that a smaller object can control and has the power to move a much larger object. For example, a commodity margin of $2,000 can control ~0 times that much in bonds. Options create large leverage in the stock markets. This same concept works in our thinking also. Words are rudders—small objects that control much larger concepts and processes of thinking or analysis. One of these larger objects is you and your potential performance in the markets. Notice the words that are used in any advertising in a newspaper or on radio or TV. These power words have the effect of taking you into the future and making you believe whatever you are hearing or reading. Advertisers know the power of words, and they choose them with extreme care. They know that you and I will react in predictable ways to these words and they (the advertisers, through their words) thereby control us. They can get us to voluntarily take money out of our pockets and give our money to them. That is the power of leverage. That being true, it becomes extremely important to examine the words we use to leverage ourselves. This leverage is even more important than the financial leverage we get with commodities and options. Our words to ourselves become habitual and therefore unnoticed and unexamined. We can divide our language into two categories: (1) inclusion and (2)

exclusion. For example, if a family goes to Walt Disney World and you ask the child for his or her reaction, the child will probably say, "It was great." That is the language of inclusion. Ask the parents and they will most likely respond with something like: "It wasn't bad—not as crowded as we expected, and the prices weren't really that bad. All in all, it wasn't a bad day at all." That is the language of exclusion. Notice how a child describes what is while most adults describe what isn~t. The chiid is more in touch with reality and is not as habituated as the adults. In our particular culture, the longer we live the more we become habituated to the language of exclusion: "The market didn't treat me all that bad today." The language of exclusion is a sure sign that Joe Gremlin is in charge. Speaking in the language of negatives, Joe G tells us what isn't instead of what is. He hates to stay in the present. He loves equally the past and the future, and finds ways of talking about what isn't. Remember when Richard Nixon said, "I'm not a crook." He never said, "I am innocent." Politicians are excellent practitioners of letting their Joe Gremlin run the show. Lately, political campaigns have turned totally to Joe Gremlin tactics. Each candidate talks about what the opponents are not instead of talking about what they are. "Joe Gremlin Speak" is also the language we most often use among ourselves. If we like a certain analysis, we say, "That isn't a bad setup." Does that mean it is a good setup? If we feel good, we say, "I can't complain about my health." Does that mean we really do feel good? "Nobody gives you a better deal than we do." Does that mean that you give a good deal? Who knows? What we do know is: that kind of language does not produce results because every exclusionary response is limiting and puts Joe Gremlin in charge, and Joe is not a winner. When Joe Gremlin speaks, we pay for it in attitude and performance. Joe is cautionary rather than compelling, self-limiting rather than expansive. Joe moves our focus from what is to what isn't. On the other hand, the language of inclusion is an accelerator when it comes to performing and winning in the market. Remember: Our words create our images and

Our images create our emotions and

Our emotions control our perceptions and

Our perceptions control our performance and

Our performance controls our prizes.

So let's get the order straight. When we start down the appropriate path, the results take care of themselves through the cybernetic principle of leverage. The language of inclusion moves from ideas and analysis to trading and profits. One of the main characteristics of winners is that they can take a bad situation with the odds against them and turn it to their favor. That happens because their underlying structure makes it so. No one wins all the time. If they did, there would be no game, including the game of life. Losers always have a large, fully developed Joe Gremlin who is usually ruining the show. From these losers, we hear Joe's voice saying, "This always seems to happen to me," "I always get in too late," "The floor always sees and runs my stops." A piece of priceless advice is: Keep Your Eye off the Prize.

How many Lotto players have you heard say: "This is the week I am going to win." Don't get me wrong. Winning is great. That's why they invented score cards and P & L statements. But keeping your eye on the prize lets Joe G sneak in and grab the rudder to steer you in the wrong direction. He creates pressure, and pressure makes you stupid. Being in the zone is the same thing as being in process. And being in process means being in the ever-present here and now. Success is learning and improving, more than winning the prize. Life itself is a journey designed to be enjoyed during the process rather than only when looking forward to the prize. To get into the zone, you must be enjoying yourself. The world, the market, you, and I all work through the same underlying natural principles of ~give and take," "advance and retreat." When you breathe, you inhale, take whatever oxygen your body needs, and then exhale. When you get into the zone and start to flow, you surge forward. When you get a setback, as we all do, you recover quickly and surge again. This is exactly what a market does, whether it is trending or range-bound. Trending markets surge, then move back, and then begin to surge again. In a range-bound area, the market surges and then turns around and surges in the other direction. The underlying structure of both is: surge-recover-surge. Surge means focus, awareness, and self-trust during and after the performance. Then Joe Gremlin shows up and wants to share the stage with you. That gives you the opportunity to recover quickly and get on with the next surge. Most of us do the opposite. We let Joe Gremlin run the show and then worry about why we can't win in this game. If that is your problem or even a part of your problem, we will outline a process of gaining control back and trading the market the way you know deep inside that you can. If you didn't realize this, deep inside, you wouldn't have spent all that money on lectures, courses, books, software, and other materials, to try to make it happen. If what you are iooking for could be found in the piaces you have been looking, you would not be reading this book. We are going to make it happen, in the ever-present HERE AND NOW. This is our game plan for handcuffing Joe and letting the real you come out and play. You'll play like a child, with the same intensity and the same enjoyment of winning. The first thing you need is an anchor to keep you in touch with reality.

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