BarroMetrics Views: Perception of Reality – The Key
Before the blog, a comment on my schedule. I thought I’d have more free time this week. Nope! For example, tomorrow I have medical appointments lined up back to back from 8:00 am to 2:30 pm AEST
So, my blog posting will probably be inconsistent until I have recovered from the hip replacement.
Continuing from the last blog…..
One of the differences between successful traders and unsuccessful is the fact that successful traders align their perception with reality. You will recall that my view of the way we humans interact with reality is “out there as seen by the in here”.
There are three ways humans use their perception:
- Contextual: the Freud approach…we have unconscious responses built upon previous experiences, especially those from our childhood.
- Reframe: the NLP approach…..we reframe past experiences, so they provide empowering rather than limiting stimuli.
- Acknowledge and Accept: the ACT approach….through attention and awareness we accept our feelings so as to prevent the 3Fs (flight, fight and fear) from overwhelming our cognitive faculties. By developing value-driven goals, we engage in value driven effective action – effective because the actions lead to goal attainment.
In a recent session of Ultimate III, I saw just how important is ‘attention & awareness’.
We were running through the process which FX pair we’d trade last week. During the review, the reasons why the USD should prove strong, the AUD, NZD, EUR and JPY weak. The rest I’d rate as neutral.
One student traded the AUDCAD because I recommended it – notwithstanding that I specifically said I’d leave the CAD alone because it was neutral.
It’s important to understand that the student believed that I had recommended the CAD as a possible pair. Luckily I video all sessions, so I was able to check.
Now that was a minor issue. More important is the way this approach when trading – we’d continually reinterpret events to suit our analysis. Then we’d wonder why we can’t make money.
Success is dependent in aligning our perception with reality. The tools we use are attention and awareness to our emotions and behaviour.