NAC. Neuro-Associative Conditioning Programing your Trading Mind. Wednesday, March 9, 2011

Transcription

1 NAC Neuro-Associative Conditioning Programing your Trading Mind

2 NAC gets it s foundation from NLP NLP or Neuro-Linguistic Programing was the primary psychology and language strategy utilized by Dr. Milton Erickson to shift the internal representations and therefore, the experiences and behaviors of patients.

3 NAC Defined: The science of Neuro-Associative Conditioning is a SYSTEM that describes the PRCESS of change in human beings and is based upon the premise that there are two determining reasons for human behavior. 1: The need to Avoid Pain 2: The desire to Gain Pleasure Ask yourself right now, How is pain avoidance affecting me every day in the market?

4 Have you EVER... Exited a trade when it moved against you thinking you were going to avoid the bigger loss of your stop getting hit, only to find out your stop DIDN T get hit and the trade hits target? Why did that happen? I traded outside of my ROE and allowed myself to break the rules. Simply Put? Pain Avoidance! AND this will continue to be your pattern until you CONSCIOUSLY DECIDE to change! So, if you re not satisfied with your current trading performance STOP TRADING immediately and decide to make the change...

5 How the Brain Works See Signal - Trade Signal In order for the brain to efficiently evaluate how to rapidly accomplish these two tasks you must create Neuro-Associations Associations within the nervous system that are used to instantly determine the meaning (pain/pleasure) of situations, people, things, sounds, emotions, etc. These neuro-associations are the directing force of all human behavior AND your trading decisions. Right now if you THINK about losses you are more than likely manifesting/creating those losses real time.

6 Between Stimulus and response lies our freedom to choose -Stephen Covey- We are all literally 6 inches from success...assuming your trading model has a positive expectancy. The STIMULUS for a trader is visual Market puts in a double top Bearish divergence on the RSI Doji candle The RESPONSE is executing the trade

7 Trading is SIMPLE but it s not EASY I know some of you are shaking your heads right now but it really is true. When you have specific rules that dictate your RESPONSE to what you re seeing on the chart (your stimulus) it really comes down to only one question. Did you follow your ROE? If the answer is YES then congratulate yourself Regardless of the outcome. Trading systems have losing days! It s OK.

8 What are your Rules of Engagement Defining the rules... Consider the IF - Then Conditional Statement... IF...this occurs then look for this IF...this is in play then go here IF...this also happens... THEN...take action

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10 Developing Your Trading Syntax Rules for entry Setup Rules for STOP Placement: The Point at which you KNOW your analysis is wrong... Signal Rules for PROFIT taking: When your analysis is correct, when do you take your position off?

11 How Traders THINK THEIR WAY to a Successful Trading Career Is it possible to remove emotion from your trading? Develop a trading syntax using IF - THEN Create Neuro-Associations to the VISUAL patterns that we all watch EVERY TRADING SESSION Train your mind to take the SAME ACTION on EVERY OCCURRENCE... Rinse and Repeat...with consistency One more thing...the power of your mind and repetition can work AGAINST you as well. If you re losing money right now and choose not to change then you ll probably continue to lose as it has become habit... Programming works BOTH WAYS!

12 The Past DOES NOT Equal the Future -Anthony Robbins- This is one of the most powerful statements a person can commit to memory. But you must truly believe it. Remember we act on our consistent Thoughts and these thoughts are not always constructive and empowering.

13 Beliefs and Controlled Focus Focusing on only that which WE CONTROL allows us to stop wasting mental energy on those things we can not. Markets are not living, breathing things that are out to get us. As a screen-based trader you can be an invisible warrior taking advantage of the fact that NO ONE knows your position.

14 Guided Imagery There was an experiment conducted at the Olympic training center involving 30 golfers. They broke the golfers into 3 groups and gave them the following instructions. Group 1 Visualize Sinking the Put Group 2 Visualize Narrowly Missing the Put Group 3 Practice Putting on the Green The Results are in...

15 Guided Imagery Of the 3 groups the results break down like this: Group 1 Visualize Sinking the Put: Increased their Accuracy by 30% Group 2 Visualize Narrowly Missing the Put: Accuracy DECREASED by 21% Group 3 Practice Putting on the Green: Increased their Accuracy by 11%

16 Guided Imagery I know, I know you still NEED more proof! A study published in The Behavior Therapist found that when a tennis player was trained for ONE WEEK to transform his pessimistic self-talk INTO positive phrases such as stay cool and concentrate on the next serve, his winning percentage in deuce games improved from 29% to 60%!! TRADERS! The body believes the mind! RE programing your mind takes TIME and CONVICTION but will absolutely have a positive impact on your trading and your bottom line. HOW do you apply this to your trading???

17 Think of a Time When Everything Happened Perfectly... The signal set up just like you had seen in your testing. The market did exactly as you expected it would You enter the trade...place your stops...place your targets and the market went to target. A ONE WAY Train...NO PAIN just profit...now... How did you feel? What was your posture? What was your breathing like? WHat was your hand doing on the mouse? Your feet? How did you react when the trade hit target.

18 Are you starting to feel some of those feelings again NOW? Through NAC we can re-create those feelings by recalling the associations...now have there been times when the EXACT same setup presented itself and instead you hesitated...the market moved in your direction...hit your would be target for your imaginary profit... WHY DIDN T YOU REACT??

19 Were you LESS capable? Did you know LESS about the markets that day? More than likely it was a result of your STATE...your trading state and your ability or IN-ability to call on the resources we used when we took the first trade...the WINNER.

20 Our Trading STATE is the Result of the interplay of 2 key Elements What we choose to mentally focus on, and just how we choose to focus on it. (think internal dialogue) Our physiology (meaning the use of our posture, our breathing and our patterns of movement.

21 Discipline Paves the Road to Accomplishment If we all did the things we are capable of doing, we would literally astound ourselves. -Thomas Edison-