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JAKE BERNSTEIN
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HOW YOUCAN TOO!
 $24.95
“Consistent success is not only difficult to realizebut hard to find, Itis the rarest of all commodities,”Says market wizard Jake Bernstein.
Whether you are a newcomer or a seasonedtrader, you'll find a Wealth of valuable insights inMarket Masters. Boost your profits and stay onthe winning track, Keep this timely new book closeto your desk to guide, inspire and motivate you tosucceed,
Play your own game. Don’t expect immediateresults, Do your homework. Don't force trades.Develop discipline, perseverance and a willingnessto accept lasses, These are just.a few of thedozens of winning tips you'll find in MarketMasters, What does it take to succeed? What dowinners have in common? How can their experi-ences help you succeed?
Learn from some of the most well-knowntraders ever!
* George Angell, day-trader, technical analystpar excellence
© Gerald Appel, father of MACD, one of themost widely followed timing tools
* Bruce Babcock, developer of trading soft-ware'and publisher of the Commodity TradersConsumer Report—the industry watchdog
© George Lane, father of stochastics and one ofthe most experienced technical analysts in theworld
* Conrad Leslie, the man whose crop reportsmove markets
© Robert Prechter, the preeminent Elliott Waveanalyst whose forecasts are followed bytraders throughout the world
* Welles Wilder, the man behind Delta and
RSI and developer of technical tools that have
revolutionized the trading world© Larry Williams, colorful, controversial-—a
legend in his own'time
Keep'your eye on the concept; act on opportuni-ties—-profits will follow, Find your niche in the vastworld of futures trading. The ability to think and actcontrary to the crowd will set you apart from therest—become your own market master!
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Be) utBern
 
 
ie Mark: 33.95
 While a great deal of care has been taken to provide accurate and currentinformation, the ideas, suggestions, general principles and conclusionspresented in this text are subject to local, state and federal laws andregulations, court cases and any revisions ofsame. The reader is thus urgedto consult legal counsel regarding any points of law—this publicationshould not be used as a substitute for competent legal advice.
Publisher: Kathy A. Welton
Associate Editor: Karen A. Christensen
Editorial Assistant: Kristen G. Landreth
Interior Design and Typesetting: Professional Resources &Communications, Inc.
Cover Design: The Charles Marketing Group, Ltd.
© 1994 by Jacob BernsteinPublished by Dearborn Financial Publishing, Inc.
All rights reserved. The text of this publication, or any part thereof, maynot be reproduced in any manner whatsoever without written permissionfrom the publisher.
Printed in the United States of America
9495 9610987654321
Library of Congress Cataloging-in-Publication Data
Bernstein, Jacob
Market Masters : how successful traders think, trade and invest and
how you can too! / Jake Bernstein.
p. cm.
Includes bibliographical references and index.
ISBN 0-79310-587-0
1. Floor traders (Finance}—United States. 2. Futures market—
United States. 3. Stock-exchange—United States. I. Title.HG4621.B475 1994 93-35779332.64'5—dc20 CIP
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Books byJake Bernstein
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Beyond the Investor’s QuotientThe Compleat Day TraderFacts on FuturesThe Handbook of Commodity Cycles: A Window on TimeHandbook of Economic CyclesHow To Profit from Seasonal Commodity SpreadsThe Investor’s Quotient
Market Masters: How Successful Traders Think, Trade andInvest... and How You Can Too!
MBH Seasonal Futures Charts: A Study of Weekly SeasonalTendencies in the Commodity Futures Markets
The New Investor's QuotientThe New ProsperitySeasonal Concepts in Futures TradingShort-Term Trader's ManualShort-Term Trading in Futures
Strategic Futures Trading: Contemporary Trading Systems ToMaximize ProfitsTiming SignalsWhy Traders Lose and How Traders WinJAKE BERNSTEIN
MARKETMASTERS
HOW SUCCESSFUL TRADERSTHINK, TRADE AND INVEST*
 
"ANDHOW YOUCAN 100!
aS DearbornFinancial Publishing, Inc.iis.
 
ContentsTAMER CER ON oscars sti cascahccoceciscorscbiaactbaconssctande ix1 @ The Market Masters .........0::cccccsssssssseeeessscessssnnes 12 ¢ Bernstein's Building Blocks of Success.....153 ¢ George AngellEPI ICE FID CH st issachuitosassauisiacioaccanennnvaiunnnaet 314 Gerald AppelOvercoming Your Emotions ......sssssessesssessessesssersnvees 39
5 « Bruce BabcockVACHS 18 EXITED socks sscvsisisesvbsandiouns sora ciuiluas vasa 47
6 « George LaneFATE SITIONS sacs cconnnneiah tin wanndnwan 59
7 « Conrad LeslieForecasts That Move Markets .......c.s:ssssssssscsesesssesssscees 69
viiviii ¢ Market Masters
8 « Robert Prechter
FRSAEAD Gio EMGORE VV GUE: sacscsscessereeysososantennersusnsiotsaresinets 859 ¢ Welles Wilder
The Man behind Delta and RSI w.ceessesssssssesessvesseeseenes 9910 ¢ Larry Williams
PAM PEH IE AN EMIS TITHE sess sonesesessvensexcabnasterssnersdenssecepenes 10911 ¢ The Keys to Success as a Trader................. 11912 ¢ The Psychology of Trading ............00.0000. 131FER ORCEIASNCVD . cccccesssncusssconscerpsuversavsonsssoveonansnssecines 145SRLOP TAA oo sisscis icici esseiecssecctaocataetiacdse 149RRR ccna crcensrcapecsseanviesh aeons ss eeseaeninarennsosioneopoevos neon 151
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Introduction
 
Without a doubt, the last bastion of capitalism is thefutures market. Few areas in today’s world of complexeconomics and investment strategies lend themselves asreadily to potentially successful use by the average indi-vidual than do the futures markets. Yes, it is a known factthat most futures traders lose money. Yes, futures trading isperhaps among the most, if not the most, demanding of allundertakings in the area of speculation.
Yes, it is a known fact that those who speculate in suchthings as futures options have even less probability ofsuccess than do those who trade futures contracts. It is alsotrue that the futures markets are extremely volatile andsubject to substantial price moves within a matter of min-utes. And, yes, professional traders have a distinct advan-tage over the average individual. Yet, given all the draw-backs, no other vehicle of which I am aware, offers as greata potential with, relatively speaking, such a limited amount
ixx @ Market Masters
ofriskas do the futures markets. I donot mean to imply herethat risk is limited. Certainly, the risk of loss in futurestrading can be substantial. However, given the potentialrewards, the risks are reasonable; given a method of well-defined risk management, futures trading is, to my way ofthinking, the greatest game in town!
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... given the potential rewards, therisks are reasonable; given a method ofwell-defined risk management, futures
trading is, to my way of thinking, theSvreatest game in town!
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Separating the Winners from the Losers
Vast fortunes can be amassed within a relatively briefperiod of time by trading futures. Naturally, the other sideof the coin cannot be ignored. Vast fortunes may be lost inarelatively brief period of time in the futures markets. Whatseparates the winners from the losers in futures trading?
This question has fascinated, intrigued, haunted, ob-sessed and frustrated traders since the first futures contractwas traded hundreds of years ago. While one is tempted totake refuge in a plethora of intellectual and defensive re-sponses, the answer to this question is indeed simple. Yet thesimplicity of the response fails to do it justice inasmuch asthe implementation of the response is, atleast on the surface,exceptionally difficult. Scores of seminars, books, articlesand lectures have attempted to cover the subject. But, aselusive as the keys to success may be, they are attainablethrough the use of various time-tested techniques.
Introduction @ xi
The keys to successful trading are not only attainable;they can be learned and taught. One of the most effective waysto learn is by example. The interviews that follow in this book,along with the analyses of these interviews, will help illumi-nate the path to successful trading by way of example.
Lessons Learned from W. Clement Stone
On a hot Chicago summer day in the mid-1980s, I wasfortunate enough to have an experience that changed my lifeasa trader. Ona whim, several weeks earlier, I had called theoffices of W. Clement Stone, the driving force behind Com-bined Insurance Company of America. Beginning with noth-ing more than determination and a vehemently positiveattitude, Mr. Stone, or “Clem,” built a vastinsurance empireas well as a tremendous fortune. The Stone rags-to-richesstory intrigued me. Given the close proximity of Mr. Stoneand his empire to my home, | asked if] could interview him.To my surprise, he agreed.
With several “attendants” at his side, Clem arrived at hiscorporate studios, perfectly dressed—suit, white shirt andascot, his imposing mustache curled and tailored perfectly.When Clem entered the room, | felt a certain respect that, tothis day, I cannot describe. The man exuded self-confidence;he made every movement with self-assurance and single-ness of purpose. He reached out his hand, and I took it. Hishandshake was solid, purposive and firm. He looked mestraight in the eye—a piercing, deep and all-knowing look.
Attitudes Versus Luck
I told Stone that I was indeed privileged to interviewhim, and I stated my purpose for the meeting, which was togain some insight into his business philosophy and more-over his psychological techniques for maintaining a positivemental attitude throughout the years. The question on mymind was whether Stone’s attitudes were truly major forcesxii ¢ Market Masters
underlying his success or whether he just happened to be inthe right place at the right time. This question is alwaysasked of those who are successful, but it can be answeredonly after an examination of the pertinent facts. Some trad-ers claim success is based on having a “lucky break.” Othersclaim that success is based on knowing the right people. Stillmore claim that success is based on positioning. I do notagree, nor would W. Clement Stone.
Positive Mental Attitude
In addition to Stone’s vast wealth and business empire,he is most recognized for his preaching of positive mentalattitude (PMA). Along with such notables as Og Mandino,Norman Vincent Peale and Napoleon Hill, Stone claims thatthe power to achieve comes from within and that positivemotivation overcomes all obstacles to success. Those whomaintain the PMA point of view argue that to be at the rightplace at the right time, one must have the correct attitude torecognize the opportunity for success.
The PMA group has given the world numerous books,tapes and publications—all designed to educate the U.S. onthe benefits and techniques of positive mental attitude.While I believe that PMA is truly valuable and that it shouldbe studied by all who are interested in achieving and main-taining success, many feel otherwise. Positive attitudes can-not be replaced by such vague and fleeting concepts as luck,positioning or political influence. I do not claim that othermethods of achieving success are not effective; rather, tofacilitate the functioning of these other techniques, one mustfirst have a solid base of positive mental attitude. Theindividual who seeks to succeed by creating opportunitiesthrough political manipulation must be confident in his orher abilities, or success will not come.
Whether we agree that positive mental attitude facili-tates and enhances success, the fact remains that in thestruggle for success in futures trading, a negative attitude
Introduction @ xiii
easily spells ruin, just as the lack of a positive attitude easilyinhibits success. Recognizing this fact, I found what followsin my interview with W. Clement Stone not only exception-ally interesting from an academic point of view but ex-tremely powerful and helpful in my futures trading.
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... in the struggle for success in futurestrading, a negative attitude easilyspells ruin just as the lack of a positiveattitude easily inhibits success.
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1 asked the pertinent question: “Mr. Stone, you areamong one of the most successful individuals in Americanhistory. What contributed most to your success?” Whatfollows is a very close approximation of his response.
Think, See and Do
“To be successful, you need to cultivate and practicethree important elements. When I was 7 years old, I had myown newspaper route. When I was 11, I had my ownnewspaper stand. When I was 16, I began to sell insurance.I wentto the bank building in town and approached the deskof the bank president. I said, ‘Sir, may I take a moment ofyour time?’ He looked at me and said, ‘Son, are you here tosell me something?’ I answered, ‘Yes.’ He said, ‘Then don’task for a minute of my time. Take it!’ ” At this point, Stonelooked me straight in the eye as if to say that he had madeasignificant point. I replied with a look of acquiescence toindicate that I understood exactly what he meant.
Stone continued, “To be successful, you need to incorpo-rate three elements into your plan. First, you must think. Youmust think about what you want to do and how you will doit. Next, you mustsee an opportunity asit develops. And last,xiv « Market Masters
you mustact when the opportunity presents itself. You mustthink, see and do. Those are the important elements tosuccess.” These important words unlocked a new and effec-tive strategy for my career as a futures trader. I realized thatThad not achieved even a small fraction of my potential as atrader since I had approached my market work haphazardlyand without a predisposition to success.
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“You must think, see and do. Those arethe important elements to success.”W. Clement Stone
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To begin with, I wasn’t really thinking; rather, I washoping. I hoped for success and in vague terms; I organizedforit. However, when it came to visualizing a plan of attack,I was sorely lacking. Secondly, I did not visualize opportu-nities when they presented themselves. Because I was sointent on not missing opportunities and unsure about whatopportunities I was looking for, I failed to see them whenthey presented themselves. And, failing to see opportuni-ties, I could not act in a fashion that yielded successfulresults. In other words, I was sorely lacking in all three ofStone’s elements to success. Knowing this, I altered signifi-cantly my behavior and opened the doors that eventuallylead me to success as a trader. Without Stone’s words on that
fateful day, my path to success would have been difficult, ifnot impossible to follow.
 
What This Book Can Do for You
Ido not claim to be as motivational a speaker or writer asW. Clement Stone or his PMA colleagues. Nor do I promise
Introduction @ XV
that this book will change your life as a trader. However, Ican make you some promises about the value of this book:
¢ Studying the interviews and, in particular, the analysisof the interviews in this book will give you importantinsights into the thought and action processes of indi-viduals who, through their efforts and motivation, havebecome respected figures in the field of stock and com-modity trading.
¢ Comparing your behaviors and attitudes with those ofaccomplished market analysts and traders will eitherconfirm or negate your orientation and may thereforealert you to changes you may want to incorporate intoyour behavior and trading.
¢ Reading this book will give you important tools to assistthe developmental process that tends to typify thosewho have been successful in the markets.
A Book for Individuals
As you read Market Masters, make comparisons to yourown situation and seek out behaviors, attitudes and meth-odologies that appear to fit yourneeds and personality. Insodoing, remember above all that what you do in the marketsmust fit your temperament. The stock and futures marketsoffer many opportunities. Vastly different styles of tradingmay yield success, but not every avenueis suitable for everyindividual. Just as life itself offers a multiplicity of differentexpressive avenues, so do the stock and futures markets.While one individual may be well-suited for the demandingposition of a floor broker, another person is at ease tradinglong-term positions and infrequently checking the prices.Either avenue may lead to wealth. Then again, neitheravenue may lead to wealth if the skills necessary for successhave not been mastered. Remember, above all else, that thisbook is not a Holy-Grail, perfect-trading-system, get-rich-quick, never-lose, isn’t-futures-trading-great book.xviii ¢ Market Masters
orientation. I did not wake up one day and decide that mytheory of market success must be based upon trader psy-chology. Rather, I studied successful traders and analystsand extracted common elements in their behaviors, whichthereby allowed me to construct a theory or explanationwith the advantage of factual support.
The information in this book should not be taken assupportive of a scientific or quasi-scientific theory of traderbehavior. In fact, much of the information is anecdotal andunsupported by hard evidence other than the experiences,results and considered opinions of those who have thecredentials of success to justify the value of listening to theirideas and learning from their experiences.
Understanding Failure
It has been said that we learn more from our mistakesthan we do from our successes. Although success is impor-tant, understanding failure and its role in shaping traderbehavior is equally important. E.L. Thorndike, the father ofAmerican Psychological Learning Theory, observed soinsightfully that millions of behaviors are wrong, but only ahandful of behaviors are right. By punishing for tradingerrors, either our own or those of others, we are not reallylearning anything. Because traders may do many wrongthings and so few right things, to punish for those wrongthings would simply open the door for something else thatis wrong. The idea is not to punish or ridicule that which wasdone wrong but rather to understand it, correct it and to doit right so that the rewards of being right may solidify thewinning behavior.
The Weak Link
The markets offer fortunes without limit to those whomaster the few simple rules of profitable trading. As I stat-ed before, the rules are simple but their implementationis difficult because human beings ultimately are the ones
Introduction xix
who must implement trading decisions and market timingsignals. The weakest linkin the chainis, has beenand alwayswill be the trader. Do not fall victim to the same perceptionthat has proven to be the downfall of so many traders beforeyou and that most assuredly will prove to be the undoing ofmany traders after you. Do not fall victim to the belief that abetter trading system will make you a better trader. The mostsophisticated and potentially successful trading system inthe world will prove to be nothing more than a tool of self-destruction.
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The weakest link in the chain is, hasbeen and always will be the trader.
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The world’s best trading system in the hands of anincompetent, undisciplined and unsophisticated trader willprove to be the vehicle for consistent losses. I do not implythat a good trading system cannot help you succeed. Indeeditcan! Yet, no matter how good your trading system may be,you are the only one who makes that system work as it wasintended unless, of course, you hire an experienced anddisciplined professional. i ‘
Consider a trading system that is so profitable it gener-ates, within a short time, thousands of dollars. Then, con-sider a period of drawdown, which is a necessary part of alltrading systems. The drawdown is really what makes orbreaks a trading system. If the individual who is trading thesystem limits drawdown to what it should be, based on thetrading signals generated by the system, then the systemwill recoup and move on to bigger and better things. How-ever, if the individual is undisciplined, unwilling to acceptlosses when they should be taken according to the system,the drawdown period will either be longer than intended
 xvi ¢ Market Masters
Market Masters is for individuals who are individuals. Itis for those who do not wish to follow the crowd but whowish to follow the lead of a few successful individuals whohave achieved success through hard work, persistence andconsistency.
Think, see and do—wealth will follow. Although manycontemporary books on personal growth and psychologystress the importance of keeping your eye on the goal, I feelthat keeping your eye on the concept and acting on oppor-tunities are more important. Jesse Livermore, legendaryspeculator of the early 1900s, said, “Profits take care ofthemselves; losses tend to get worse.” And so itis with one’spersonal orientation to the markets.
Success Follows
Success tends to take care of itself if you provide theproper psychological and behavioral backdrop for it tooccur. Goals are indeed wonderful; without them, we wouldall proceed haphazardly about our lives, randomly findingsuccess and possibly not even recognizing it once it hascomeour way. Yet, the road to success must be paved withbehaviors, attitudes, opinions and visualizations.
Theoretical Framework
My theory on and orientation to the issue of trader suc-cess is based upon four elements. These elements form theunderlying structure of what I will attempt to demonstratethrough the interviews that follow. | am not presenting apsychological evaluation or clinical examination of the re-sponses to my interview questions. As you will see, eachindividual has his own brand of personal psychology. Theindividual's personal psychology does not interest me, nordo the methodological considerations that were used toachieve success. Instead, each individual's response styleintrigues me because it reveals a great deal about how a
Introduction @ xvii
person who has been successful approaches the marketsand, above all, copes with the many reversals that are,unfortunately but necessarily, such a significant part offutures trading.
Here then are the four elements that comprise the es-sence of my success theory:
1, The way in which traders deal with loss and failure is justas important, if not more important, than the way inwhich they deal with success.
2. Effectively controlling and channelling emotions aretwo primary issues in the equation for success.
3. Those who have been successful and continue to besuccessful either as traders or as market analysts, tradingadvisers or market experts recognize the importance ofmarket psychology and, to a certain extent, incorporateit into their work.
4. There are core elements common to the behavior ofsuccessful market professionals; to be successful in themarkets, you need to develop and maintain similarattitudes, behaviors and opinions.
From Reality Back to Theory
Remember, my theoretical framework does not seek topigeonhole all traders into a given response style or set ofattitudes. Rather, it works from reality back to theory. Let meclarify what I mean. Some explanations of phenomena beginwith a theory or hypothetical construct. They begin with aset of assumptions based on logical alternatives, which inturn are based on known scientific, psychological or socio-logical facts. These theories then work forward amassing abody of evidence to either confirm or negate their validity.
My approach is distinctly different. While I begin withatheoretical exposition on the subject of trader success, thisconclusion has been derived from a pragmatic or empiricalxx @ Market Masters
and/or the dollaramount of drawdown will be greater thanintended or greater than it should have been. The systemwill deteriorate because of the trader.
I maintain that the ability of a trader to cope with suchperiods of drawdown and losses will either make or breakasystem. No matter how good a system may be, this, theweakest link in the chain, will break the back of the systemand the trader more quickly than any unexpected event. Atthis point, the psychology of the trader becomes of para-mount importance; attitudes, behavior, perceptions andexperience become the quintessential elements for success.
By correctly applying what has been learned throughexperience, and by coping with losses, the trader will eithermake or break the system. While no predetermined formulaexists for dealing with such situations, there are methodsand procedures that may either minimize the degree oftrader error or maximize it depending upon the trader'sresponse style.
Shortcut to Learning
You can learn the elements to successful trading indifferent ways. For example, you can undergo a lengthyperiod of psychiatric treatment that may or may not be ofvalue. You might enroll in a success motivation course thatwilllikely help you succeed. You can read extensively aboutfutures trading and investing in the stock market to developyour own methods and procedures. You may read thewritings of master traders and speculators to extract themost meaningful methods and procedures. You might em-bark on a course of finding the perfect trading system onlyto discover that it will not help you. Or you can shortcut allthe above by going directly to Jack Schwager’s Market Wiz-ards books or to the information provided in this book.
Either way, your goal should be to focus upon techniqueand trader psychology as opposed to market methodologyor trading systems. I estimate thata trading systemis only 20percent of the necessary ingredients for success in the stock
Introduction @ xxi
and/or futures markets. The balance consists of effective riskmanagement tools, positive mental attitude, personal traderpsychology, discipline, structure, consistency and persis-tence. All these can be learned, but, like anything else that isworthwhile, practice, patience and persistence are the criti-cal tools in successfully bringing you to your goal.
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... your goal should be to focus upontechnique and trader psychology asopposed to market methodology ortrading systems.
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Visualize, Recognize and Act
Ihope that the interviews and analyses that follow helpyou on your road to success as a trader. Remember, how-ever, that to win the battle as opposed to winning only briefbattles, you need to think, see and do. You need to visualizeopportunities, recognize them when they appear and, above all,consistently act on them once they present themselves. You needto act without concern as to whether these opportunities willproduce profits or losses because the success of any tradingsignal or any investment can be known only partially priorto its actual occurrence. Do not fall into the trap of thinkingthat the trade or investment you are about to make will notbe successful. It has no greater or lesser chance of successthan does any other signal derived from your system.
Winning Attitudes and Behaviors
Every signal generated by your trading system ormethodof market analysis must be considered at the outset to be thesignal that will produce a vast fortune. If you do not lookupon each trading opportunity as a significant opportunityxxii ¢ Market Masters
for profit, you will allow yourself to be dissuaded fromacting accordingly. If you do not enter each trade with apositive attitude, you open the door to self-doubt, which isamong the greatest enemies that defeats a trader.
No individual, no course, no tape, no lecture, no article,no book can do for you what you can do for yourself. Todevelop winning attitudes and behaviors, you need to workwith yourself, and you need to develop your skills throughyour own efforts. In so doing, you have only a limitedamount of time, and you must therefore be selective aboutwhat you seek to study. My advice, which is based onconsiderable experience, is to focus on your personal growthas a trader by studying the elements that have made otherssuccessful in this field.
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TheMarket Masters
 
Sed omnia praeclara tam difficilia quam rara sunt... “Buteverything great is just as difficult to realize as it is rare tofind .. .” are the closing words of philosopher Spinoza’sgreat work, Ethics.
Whether greatness is achieved in art, science, businessor philosophy, it is rarely an overnight phenomenon. Someof the most accomplished individuals, often considered“overnight successes” in their field, realized their greatnessonly after years of effort and thousands of failures. Whatseems obvious and apparent on the outside often bears littleresemblance to what is inside. It seems somewhat blasphe-mous to borrow from one of history's greatest thinkers tomake a point about success as a stock or futures trader.However, if my application of Spinoza’s wisdom helps youachieve greatness asa trader or as aninvestor, then applyinghis teachings to trading psychology will be worthwhile.2 Market Masters
Years of Experience
Frequently, I am asked what have learned in more than22 years as a stock and futures trader. At times, I respondthat what I have learned could easily fill 20 books; yet |realize that I have learned little. However, the value andintensity of what! have gleaned from my years of experienceare significant. As in the case of anyone who attempts to besuccessful as a trader, I found it difficult to realize mysuccess both in terms of the actual process and in terms ofrecognizing my own success.
The road to profits is lined with the best intentions, thebest trading systems and the most disciplined trading plans.Consistent success is not only difficult to realize but hard tofind. It is the rarest of all commodities.
Through the years, I have shared with other traders theknowledge I have accumulated through my long and oftenhard experiences. In my book, The Investor’s Quotient (1980),I set forth the principles that govern investor and traderbehavior. I provided numerous suggestions as to how los-ing behaviors might be transformed into positive behaviorsand attitudes. In Beyond the Investor’s Quotient (1988), Iexpanded on the techniques and insights offered in TheInvestor's Quotient. In 1993, I wrote The New Investor’s Quo-tient, which updated the concepts and techniques providedin the original edition and expanded on new methods thathad developed since 1980.
Yet in spite of everything | have written and spokenabout regarding trader behavior since 1972, the trader's lothas not improved significantly. Traders, for the most part,are still victims of myriad weaknesses and shortcomings,demons of their own creation. Most limitations can becorrected easily, but none can be changed without varyingdegrees of effort.
1/ The Market Masters ¢ 3
The Ostrich Syndrome
Modern techniques of psychological and behavioral treat-ment are numerous and effective. Today, no trader shouldcontinue on the same path of blunders that has inhibitedsuccess for so many years. But the traderis human. Given thefrailties of the human ego, it is difficult for the trader whorealizes that psychological difficulties are inhibiting his orher success to seek professional assistance in remedyingthese problems. Most traders, believing erroneously that a“better trading system,” a “faster computer,” or “morehistorical research” will be the panacea to what has inhibitedtheir success, continue to struggle with themselves and withthe market. Many traders refuse assistance because theyhave been told that they can “do it themselves.” They donotadmit weakness. They do not let others know that they havelost control over their emotions or that they had little controlin the first place.
