HEURISTIC TRADING

The 4th Level of Trading

Psychology of Trading

Are you a Trading Robot? OR Are you a Robot Trader?

FCOG( SA )

Dr HW Lindeque MBChB(UFS) MMed ( O&G )UFS

Dipl. Fin Markets ( AFM )

Introduction And Background

Psychology Of Trading!!

2007

Mental Trading - 3rd Level of Trading Mark Douglas Thought process Discipline Power of Now

2008

Manifesting Money ( Metaphysics )

Subconscious Mind / Wealth Creation / Leverage of the mind

2009

The Tao of the Dow ( Tao Te Ching Lao Tsu ) Personality/Para psychology/Trans State/Behaviour Finance

2010

Japanese Candlesticks (Asian Charting )

Sexy Bodies / Shady Shadows / Candle Patterns

Heikin Ashi / Ichimoku Kinko Hyo Clouds.

2011

Heuristic Trading (SRS) - 4th Level of Trading

Heuristic Trading (SRS)

Heuristic = Simple set of rules = Simple Rules System Greek - Find / Discover

Experience based techniques

Common Sense / Gut Feel

Intuitive Judgement Simple Efficient rules Case by case Analysis Good Solution Action

HEURISTIC TRADING
SRS

Heuristic Trading

Decision Heuristic

4 Levels :

- Fundamental
- Technical - Mental

Heuristic
SRS - - - - SOS

Direct Shock Approach!! 1st Person Approach

1st Person(out of own eye)

2nd Person

3rd Person
NLP

Heuristics (SRS )

I must ask unending empowering Questions

Quality of my life is directly related to the quality of the questions I ask myself

( Anthony Robbins Personal Power II )

Heuristics (SRS)
1) Who am I ? ( Know Myself ) 2) Where do I want to be ? (Goal / Aim / Outcome ) 3) Why do I do it ? ( Reason / Emotion ) 4) What must I do ? ( Plan / Map ) 5) How do I do it ? (Action / Do ) 6) When do I do / change it ?( Time frame / Monitor )

Heuristic Moment
= Leverage Moment = Decision Taking Moment = Rule based (SRS) Moment

= Dopamine Moment
= Dependant Moment - Pain / Pleasure

- Emotions / Feelings

Wow Moment

Heuristic Definitions

Mind

- Thinking / consciousness / Intellect / Thought / Perception / Emotion / Ego

Spirit

- Spirit in us = Breath
Life / Truth / Non ego Birth / Life / Death

Soul

- Essence of a living soul Science of being

Body

- Physical / Individual
Energy / Observer see as solid

Psychology Of The Trader

How to know myself?

To Trade successfully

I must know : - Myself - Thought Process - Feelings / Emotions - Strengths / Weakness - Personality groups and traits - Wealth Profile

- Wealth Spectrum
- Energy Flow

Trade without Emotion ?

Am I human or Am I a Robot ???

- Behave like Robot (Industrial Era)

- Robots like humans (Information Era)
( Information / Workers Era )

What Makes Me Human ????

Human Or Robot ???

Why am I Human ?

Emotions

Can I Trade without Emotions ? Can I be disciplined to behave robotic ?

1673 Rene Descartes said:

I Think - Therefore I am

1995 - Antonio Damascio ( Texas ) 2011 Erik Du Plessis The Branded Mind Descartes Error

Human OR Robot ??

Emotional Human

I cannot trade without emotion Emotion (Feelings) in Limbic system Dopamine System / Neuro- Endocrine system See / Feel / Hear something Physical and emotional
Functionality

Not rationality / Emotionally

Emotions determine, control and assist Rational Thinking

Human OR Robot ?
- Discipline myself ( Control )

Emotions are not in conflict with rational behaviour Emotions cause rational behaviour ( Damascio )

Emotional human being

We -Think Charles Leadbeater 2005

Mass innovation / Mass Collaboration

We Think Therefore we are

New Paradigm New way of thinking- Mark Douglas - (1993)

Old
(Buy and Hold)
- No Define loss - No exit losing trade - Locked into opinion - Focus on prize - Revenge Trading - Ignore Market direction - No Trading rules - Immobilized - No act intuition

New(Goal/Reason/Risk/Execute
Responsibility (Trader)
- Goal achievement - Recognize skills - Adapt Person - Determine risk - Execute Instant - Let market direct - Structure beliefs - Objectivity - Intuitive Multiple Systems

Mental Trading (Mark Douglas 1995 )

New Thinking Methodology

What you want not what you fear

How to know yourself + skills

How to adapt / Response

Determine the risk

Flawless execution methods How to structure your beliefs

How to stay objective

How to recognize to be truly intuitive

Do I Know Myself Know Myself ........... ??

When do I know myself?

Dark / Light ( Shadow process ) Love myself / Body / Honour myself Self Love = Humble grateful respect Respect others / Nature / Things / Markets Higher self / Force

I am you, you are me We are all , all are we -- What else is there
I am not my body or my emotions or my mind. I am an infinite part of the god-force, using The physical form to experience spiritual development through a special training called daily life. Miracles- Stuart Wilde

Decision making speed Intuitive ability Additional ability Emotional Flexibility

Psychometric Testing

Information Processing ability and speed Risk taking profile Concentration span Focus Realm

Wealth Dynamics Profile

Energy Frequencies
The 5 Frequencies
FREQUENCY SEASON ELEMENT FLOW

1) Dynamo 2) Blaze

Spring Summer

Wood Fire

Innovating Energizing

3) Tempo
4) Steel 5) Water

Autumn
Winter All

Earth
Metal Water

Connecting
Analysing Peak Flow

Invest in harmony with my strongest frequency Soon I will be in my zone / flow / River /peak energy
Peak Flow/Performance/Trading

Wealth Spectrum

Where are you on Millionaire Map ? 3 Prisms of Wealth :

Wealth Dynamic Spectrum

Legend (Ultra- Violet )

3.)

Alchemy

Composer (Violet )
Trustee (Indigo) Conductor (Blue)

( Magic Circle)

2.) Enterprise

Performer (Green) Player (Yellow) Worker (orange)

1.)

Foundation

Survivor (Red)

Victim ( Infra red )

Why should it be okay When it can be good? Why should it be good When it can be great? Why should it be great When it can be amazing? -SHAKIRA

Success

What is Success????

Rich / Wealthy / Known / Celebrity yourself ! !

Success : When you meet the standards you have set for

But : Do not set low Standards Set no Mediocre goals they have no power to raise man's blood.

Success in Trading!!

Success / Wealth / Richest / Lack / Poverty / Losses

Mind

Poverty / Unsuccessful Trading = Mental Illness

I am the ONLY thinker in my Universe

As Within -------- So Without

Failure of success!

Childhood programming

Life is a struggle

Not worthy of something

Abundance - not birth right Special Sin To get rid off.

Negative Self worth programming Repetition Compulsion Self Sabotage

Struggle

- Frustration - Non Performance - Procrastination ( Manjana Man ) - Homunculus Man - Unsuccessful

Poor Trading
Unfulfilled Desire Think worth VS Achieve

SRS

The main Purpose of thinking

To abolish thinking (2nd Nature )

Automatic pattern recognition system ( Subconscious)

- Lateral / Creative Thinking

Chart Patterns jump at you...without thinking

.......... just automatically there Engage in Probability thinking

APC ( Alternatives possibilities choices )

All Possibilities Either or / and both PMI ( Plus/minus/interrelated )

Can you give the collective conscious a slip!! - Can you be independent (Scurvy Elephant) - Can you be irritating - Can you be illogical ( Miracles) - Can you change your emotional state

How can I be a disciplined Trader?

Mark Douglas (Disciplined Trader 1993) Understand myself Tonights talk

Understand the markets

Understand the Trade = Absolute Finest detail.

- BE A SAGE

T.R.A.D.E. Into Discipline !! How to discipline Myself!!

T. Target/Transcend/Goal/Decision/Desire/

Plan/Outcome

WHERE

R . Reason/Emotion/Feelings/Readiness

WHY

A . Action/Aim/Plan/Map/Performance

HOW

D . Do/Deliver/Discipline/Repetition/Flawless
Execution WHAT

E . Evaluate/Monitor/Alter/Adjust/Analyse/Change/Adapt/
TAKE RESPONSIBILITY WHO

How do I loose discipline?

Situational - External Pressures.
- Desperation Mode

- About money / Not process

Personality - Personality Groups

- Ideal Performance State ( IPS ) - Ideal Trading State ( ITS )

How do you form a Financial Blueprint

PPT FAR

Past programming Subconscious conditioning Thoughts Thinking Feeling Decisions

Actions Actions in Trading

Results Outcome

Habits
Acquired Pattern of Behaviour often occurs automatically.
Instructive action through Discipline.

Negative Habits
Why Do I Keep Doing That........Keep doing that.......

Repetition Compulsion (Freud) Blind Impulse Recreate emotions in adult life- what they experienced as children. Childhood Neuro-programming. Low Self esteem / Self-worth Addiction / Rebellion / Masochism / Negative Habits Unconscious repressed feelings. Conflict Past / Present Conflict between blueprint / expectations

How do I collapse a old negative Habit and create a new Positive Habit?
1) Create new + Anchors
2) Fire off + and - Anchors Simultaneously. Desired Emotional State

Link a Trigger to this State

Swish Pattern -Identify old negative habits

-Create new pictures of new desired change

-Swish the two pictures. From small to big in 1 sec - Say WHOOOSH

-Speed + Repetition
NB!! Trigger / Speed / Anchor

Dickens Pattern
Charles Dickens / The Scrooge Rocking Chair Test

Autopilot

D
R E A M

Decide
Reason Emotion Act/ Anchor Monitor

____________________________________________________________________________ L I F E Liberate Intensity Focus Evaluate / Evolve

Anchor

Anchors
NLP

1. Unique stimulus
2. Intensity ( attention )

3. Pure ( Simple )
4. Time ( Precise )

5. Context / Content
Stack / Chain / Slide / Extinguish / Collapse

Energy

Energy / Body

Frozen Unit Cells / River Intelligence Finite Static / Infinite ever changing

Mind / Spirit / Body / Soul

DNA / Progenitor / Cells/ Molecules / Atoms / Receptors

Hydrogen / Oxygen / Carbon / Nitrogen

Brain cell function / Gut feel / Neuro peptides

In the zone / In flow / In Balance

Through balance or lack of balance You control every event / decision in your Life ( Stuart Wilde )

How Do I Increase My Energy??? R.E.F.S

REF up REFSRest / Relax Eat ( Healthy Stuff ) Fluids ( Water )

Stretch ( Movement / Motion )

Energy
Acidity
* Stress * Coffee

(Healthy Eating)

Alkalinity
* Think Green * Green Drinks

* Sugar
* Alcohol

* Green Veggies
* Green Salads

* Smoke
* Animal Meat * Diary

* Green Tea
* Bali Green * Wheat Grass Tea

Losses Mistakes Errors

How Do I handle a Loss???

( In Money Terms )

Business Like Take it like a real man / woman When enter the trade: Determine ( Decide)
Business cost( Capital outlay )-Trade size / Money Management
Running cost / Expenses ( Overheads + Taxes ) Risk ( Stop-loss) Target / Profit

Outcome = Certain No Fear / No Stress / No Anger

When in the Trade: Alert / Observe / Aware / Monitor

Exit -

A = Acknowledge (Awareness )
D= Decide / Release (Unemotional ) A= Act / Imprint it / Mentally / Rehearse / Discipline
No Failures- Only Learning Experiences

Resilience + Toughness

Resilience AND Toughness

Lateral Thinking Parallel Thinking

( Edward De Bono )

Scurvy Elephant

( Disturbing Element ) ( Dr Wayne Dyer )

Resilience / Toughness
Mental Toughness / Growth

Expand my Sphere

Pressure / Adversity - Dive/ Drive/ Survive/ Thrive

Adapt/Give up/Crumble/ Beaten down Do I get up to take the next trade, and the next, and the next......... (Jarred Martinez ) (Alexander Elder ) Am I Bitter / Better Am I grateful for opportunities

Healing

Mastery of self Beliefs in Life and the Market

Life
Never Quit Losing is bad To be decisive Take control and charge

Market
Quit if things are tough Quit to cut losses Flexible with ever changing information Listen / Follow the market

To dictate
Stamp out uncertainty Want to be right all the time

Do not control
OK with uncertainty OK to be wrong

Healing Methods / Models

1.Passing over : CM hand over to SCM

2.Prayer Method : Higher self / Mind

3.Visualization 4.Manifestation

5.MMM ( Mental Movie Method )

6.Baudain Techniques ( Sleep but awake ) 7.Sleeping Technique ( Sleep) 8.Thank you Method (Gratitude ) 9.Affirmation Method ( Incantations ) 10.Argumentative Method ( Reasoning ) 11.Absolute Technique

12) Decree Method (Declare/ Document )

13) Syllogism ( Whatever he mind assumes to be True, is true.

14) Logo Therapy ( Victor Franklin)

Confidence

Evaluation + Analysis

Monitor / Journal
1) Write it down.

2)Logbook / Journal / App / Computer Diary / Spreadsheet 3)What do I count? ( Metrics )

How do I build Confidence ?

1) Know
2) Do 3) Discipline

( Learning )
(Experience) (Pos Reinforce )

4) Monitor
5) Journal

Adapt / Change )
(Documentation )

If your life is worth living Your life is worth recording ( Anthony Robbins )

Document Myself / Trading Journal

Trading Journal Why write it down ?
1. Black on white (Colours ) - (Six Thinking Hats Edward De Bono )
2. Distance 3. Control ( Look Smaller ) 4. Drive emotion towards rational 5. Break it up in pieces 6. Focus the Brain 7. Visualization / Kinaesthetic 8. Use More Senses (5 Windows )

She can see it in your eyes

Anxiety / Angst

Fear

THE 4 BIG FEARS PRIMARY fears

1. Fear of being wrong (Worse than death- Dr D Paul ) 2. Fear of losing money 3. Fear of missing out 4. Fear of leaving money on the table

Psychology Of The Market

Market(s)

Psychological Communication Between Millions Of People Based on their Emotional State How they feel

Their state of mind

Their State change

Decisions based on their Financial Blueprint Their believe system

How to think in probabilities!! NEW Mental Mindset - Mark Douglas

- Anything can happen. - You don't need to know what is going to happen next in order to make money. - Random distribution between gains and losses for any given set of variables that define an edge. - An edge is nothing more than a higher probability of one thing happening over another.

- Every moment in the market is unique.

Psychologically most of us prefer comfort and safety to risk taking Identify it ( Ari Kiev ) Determine it - Name it ( Give it a name and write it down)

Market Risk

- Stop loss / Variety / Adventure

- Venture Capital Enterprise - Daredevilry / Take the Plunge

Quantify the risk Document the risk (Journal )

Enjoy the Process ( Not outcome )

Control the risk / Challenge / Variety Control the trade Embrace it Gratitude

SRS
Survival in life / Trading
D.A.M. A.D.A.M. K.A.R.M.A. L.I.F.E.

D A M

Decide Act Monitor

How do I do Positive Neuroprogramming? (How do I change anything!)

A.D.A.M Process

A =

Aware (Acute Awareness)

D =
A = M=

Decide (Thought)
Act (Action/Map) Monitor (Reflect/Change)

Solution is in the Problem Answer is in the question

The Market Risk A.d.a.m. and E.v.e.

A D

Aim/Purpose Desire/Decide/ Emotion

Embrace/ Acceptance/ Excitement/ Define Verbalize/Verify/ Pattern Questions/Virtue(Do Good)

A
M

Act/Do/Map
Monitor/Change

Evaluate/ Monitor/ Change/ Adapt

L I

Liberation Intelligence
Freedom Emotion

( Thought ) ( Knowledge )
( Fear ) (Feelings )

F=
E=

How to Discipline myself ???

K.A.R.M.A

K Knowledge/ Know/ Key/

Kick-start/ Kindle/ Thought/Decide/Destiny

A Adam/ Change/Adjust/
Improve performance.

A Action / Plan / Map

R Repetition / Discipline / M Monitor / Revise /

Evaluate Autopilot/ Repeated/ Recurrent/ Flawless Execution

Lifestyle Design LD= Live I.D.E.A.L. Life

I=

Inner awareness (silence/Body)

What is not how I want it to be?

D=
E= A= L=

Decide /Purpose /Motivate

Thought /Feeling /Need

Emotion /Reason /Why Why do I want it like that?

Action /Plan/ Map/ Do/ How

Liberate /Monitor/ Adjust/ Change/ Improve/ Freedom/ Limitless time /Mobility.

to D.R.E.A.M. trading
SRS of acronyms

Decision Heuristics

D - Decide / Presence Now moment

R - Reason / Relevance

E - Evaluation / Progress Performance

A - Action / Advancement / Evolution / Benefit M- Monitor / Bonding

The Market How Can I understand The Market!

Unlimited potential.
Markets in perpetual motion. (Beginning /End-River of Live )

Unstructured environment.
Market is always right. Reasons irrelevant in markets.

Psychology Of The Trading Process

The Trading Process

Trading process

Trading Strategy = Edge Standardize/ Individualize (Market forever changing ) Find your magic/ Flow / Zone Magic Formula Holy Grail

System/ Style /Approach/ Edge

Trading Steps

Learning to be a Trader (Decide) Becoming a Trader (Plan) Being a Trader (Do) (Conscious)

(Unconscious Competence)
(Disciplined Robot on autopilot) Improving the Trader (Monitor)

(Continuous SPD)0

Trading Process
Planning / Prepare.

Decision / Discipline.
Flawless Execution. Evaluation / Analysis / Monitor / Improve Performance.

Trading Rules:
Not being right- Trading Right Individual Trades do not count Don't let a loosing trade become ....... I am a loser

There are no failures in life- only learning experiences ( Anthony Robbins )

There is no such thing as failure- unless accepted as such by the human mind.
Think and grow rich. (Napoleon Hill- 1929)

How to Create a High Performance Environment!

Trading Room Trading place / desk / computers Clothing / heat / seat Trading information Trading Team / Network Person ( Hunger / output / Headache )

Pay phenomenal attention to minuscule detail.

Be like an Athlete - I am a Market Runner!

How Do I Prep For Trading?

How do I tune in.

How do I get in the flow.

How do I enter the zone.

- But on what

- Always focus

- Moment

- Process

How to Tune in ( Into the moment )

-Relax
( Alpha state )

-Meditate ( Theta/ Delta state )

-Music / Touch / Smell / Taste / See -Breathing ( Energy / Meditative )

-Incantations
-Movement ( Motion creates Emotion ) ( Wooosh Technique )

How Do I Prepare Myself For Trading? P.R.E.P

P. Purpose / Plan / Prepare
R. Rehearse / Repeat / Reason E. Eventualities / Entertainment / Interruptions P. Positive State / Power - Ask powerful Questions -What is going well for me -What am I happy about. -Who do I Love. -What am I grateful for

Loss Of Discipline/Focus? (Distraction)

Awareness
Refocus PMT (Present Moment Techniques )
Time out Become aware Observe Surroundings 5 Senses focus Breath - 10 x Deep ( 5-10-5 Method) - Gap / Nostrils / Body

Visualise / Manifest / QFT

Re- Prep
3 Gateways into the NOW - Inner Stillness/ Body/ Acceptance

Practical Test to focus my mind

Sit comfortable Close your eyes ( cut out vision ) Inhale / hold / exhale Visualize / feel

Pause / Gap
Repeat 7/10 Times
Add Music / Sounds / Isochronic Beats

Discussion / Questions

Psychology of SPD Heuristics of SPD SRS of SPD

SPD In Trading!!

Deeper Meaning

Metaphysics

Science of being Inner knowing

Miracle maker in me
Energy- Force- Set me Free Energy=Money=Free No limitations / Unlimited possibilities No Scarcity / Only Abundance
The only limitations in life- are those that you put up In your own mind ( Napoleon Hill )

Metaphysics

I am the force within. I am beauty and strength. Abundance not how much- It's how you feel Strategy does not make money - people do.

I cannot control the market- but I can control myself

No one can take away my ability to think, decide and to choose. Impress on mind Express in life

Metaphysics

Wealth: What I have left after loosing all my money.

Abundance and gratitude

I am powerful, positive and beauty. This day is a day of balance and all that I pull to me is for my highest evolution and growth. All events are for my higher good. I am an expression of the god-force. I only see beauty in others and what I am only portraits and refreshes what they are.

The Ego and the Spirit

Ego says
Be afraid

Spirit says
There is nothing to fear

Separation from everything

Emptiness

Connection with all

Fullness

Striving and becoming

Needs competition 'look out!' There is lack and scarcity Withholding Attack and defend Fight and compete Must have by getting Defend

Already is now
No need for competition 'Look in!' There is an abundance of all we need Sharing, extending and giving No need to attack or defend No need to fight, argue or compare Have in our being, so give Surrender

What goes on in my life

Emotionally

Will I be magnified by the market

100x 1000x and more...............

NLP- MODELS

Perception ( Insight ) Perspectives ( Communication )

Behaviour Modulation
1st / 2nd /3rd Person Position Model Meta Model (Sage )

VAKOG

V
A

Visual

(Seeing)

Auditory (Hearing)

K
O

Kinaesthetic (Feeling/Touch)
Olfactory (Smelling)

Gustatory (Tasting)
VAKOG System Senses 5 Windows to the Soul

Lack and poverty= SCM not programmed.

SCM= I am worth it and I deserve it.

Wealth is of the mind SCM never short of ideas

Poverty= Mental illness.

Relax mind easy to program Success= Rejoice at the enterprise of living I am the ONLY thinker in my UNIVERSE

Change my Body/ Brain/ Life

Reduce stress / BP / Heart rate Increase relaxation / Peacefulness / Serenity

Increase sense of self / Empathy / Memory

Change brainwaves - Alpha Change Pre-frontal brain function

Change genetic expression / Impression

New connections / Cells heal / Prot / Enzymes Mindfulness (Believe / emotions)- Modify genes- cells ( neurotransmitters ) Spirit Mind Body

( 3 Income Models Bryan Franklin )

Sacrifiser

- Sacrifice life
- Trading is everything - Buy life back later - One day, honey - No progress / success

Blamer - Sacrifice Nothing - No Progress / No wealth - Successful - No responsibility - Blame others / System / Info / Markets - Look for sympathy

Metaphysical / Heuristic Trader

- In sync with herself / life - Discipline / Habits - Love life / love work / love people - Work / play / joy hard - Rules / value added / Energy

Brain function

Brainwaves Waveband (Mega Hz / sec)

Beta
Alpha Theta Delta Kappa

14-28 c/sec Awake state/ Daily life Conscious decision

7-14 c/sec Relax / Sleep state Stress management / Super alert Super learning / Super memory

4-6 c /sec Dream State / REM Subconscious / Motivational Super recall / OBE / ESP Lower BP / Nirvana state
0,5-4 c/ sec Unconscious Catatonic State ( K-Band) 30-33 (> 150 ) Spikes / Hyper Excited State

How Do I Change

Change me ( I ) Change my thoughts / emotions

Change my behaviour

The Problem Solving Questions!

1.What is great about this problem? 2.What is not perfect yet?

3.What am I willing to do to make it the way I want it?

4.What am I willing to no longer do in order to make it the way I want it?

5.How can I enjoy the process while I do what is necessary to make it the way I want it?

If you have trouble answering any of these questions, use the word could. Example: What could I be most happy about in my life right now? (Anthony Robbins-Notes from a friend)

Metaphysics
The only way to enjoy a higher level of success, including wealth, financial freedom, job satisfaction and richer relationships.
Find the higher self Bliss Inner Level of Being

Go with in BE still JUST BE

Income rarely exceeds personal development. To have more than you've got, become more than you are Unless you change how you are , you'll always have what you've got !!!

...

Jim Rohn

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