Meditation -- i.e., sitting still and trying to clear your racing mind -- isn't for everyone.
It's hard enough even for 30 minutes. In fact, after attending a ten-day meditation retreat myself, I wouldn't wish an extended Zen course on my worst enemy.
However, learning self-discipline and emotional regulation are not exclusive to Eastern mysticism -- and, according to many technical analysts, the ability to control one's reactions to the outside world is a necessary skill for becoming a successful trader.
Our EWI office here in sleepy Northeast Georgia is far from the hustle and bustle of a trading room floor at an investment bank. It's an idyllic setting for our analysts to remain cool, calm and collected. And to make technical analysis work for you, it's imperative to do the same when trading.
While it's hardly an original thought, it's the one that bears repeating. As EWI president Robert Prechter puts it in Prechter's Perspective (emphasis added):
Most [subscribers] take my input, add input from one or two other people, and ultimately make up their own minds. That's all I really want to provide: an adjunct to someone's thinking. All I do is take Elliott's observations and, using those patterns and guidelines, rank the probabilities for the likely paths of the markets. It's just a matter of memorizing the patterns and their implications and having the discipline to apply them without letting your emotions or extraneous information cloud your judgment.
Prechter's thoughts are echoed by a friend of EWI, 40-year veteran S&P trader Dick Diamond, who teaches aspiring traders three times a year at his intensive 4-day trading course* (This year's final course is November 6-9). A colleague who attended the course a few years ago reported that on the very first day, Dick told the class
“Most of you will not succeed as traders. I can teach you everything I know, but most of you will not follow my advice. And those of you who will try won’t have the emotional discipline to stick with it. Learning to trade is like learning about weight loss. Every weight loss book out there says basically the same thing, yet only 12% of dieters lose weight, and only 2% will have the discipline to lose it permanently. For futures traders, the success figure is roughly 5%. Main problem for dieters and traders alike is not the lack of knowledge -- it’s the lack of discipline to do the right thing.”
Dick Diamond's trading course assistant Roberto Hernandez shares Dick's sentiment:
"[Trading is] not all about oscillators and wave counts. If you have no discipline and control over your emotions, forget it. You can have no control over your emotions and be a good analyst, but you'll never become a good trader until that happens. Even now, I sometimes look at the Dow and get excited, but Dick tells me to stay calm. Wave analysis doesn’t teach you emotional control, but Dick in his course does."
Personally, having gone through ten days of mind-calming training, I know that you can learn emotional discipline. Held at a sleek, contemporary hotel in downtown Chicago's Financial District, Diamond's "informal and stress-free" tutorial is a far cry from my un-air-conditioned, painfully monastic Zen retreat -- all the more reason to attend!
Obtaining the discipline needed to achieve "trading enlightenment" will be refreshing, educational, and insightful with Dick Diamond's Market Mentor Trading Course.
Join Dick Diamond and Roberto Hernandez November 6-9 in Chicago for this action-packed, intensive, four-day seminar and learn how to "close the gap" between theory and practice to take your trading to the next level.
Hurry, the early-bird discount expires soon. Learn more now!
*NOTE: Dick Diamond's 4-day course does not focus on Elliott wave analysis. Mr. Diamond teaches his own methodology, which is extremely technical but not Elliott-wave based.