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c03 JWBK182-McDowell April 25, 2008 15:41 Printer: Yet to come

CHAPTER 3

Yin and Yang

O

ur world is made up of opposites, yin and yang, dark and light, weak-

ness and strength. These opposites drive your trading psychology

every day. Understanding these opposites will enable you to gain

insight into the forces of your unconscious that are at work as you place

trades in the markets. Being that these forces are unconscious, it takes a lit-

tle introspection to see them and understand them. In the following pages,

you’ll be looking in the mirror to identify these unconscious forces to see

how they may impact your trading psychology. The more that you know

and understand yourself, the better a trader you will be.

FOCUS ON YOUR STRENGTHS AND

ADJUST FOR YOUR WEAKNESSES

We’ve all got strengths and weaknesses, even the occasional egomaniac

who believes he has only strengths. Providing that you don’t fall into the

egomaniac category, we’d like you to look at both sides of the equation, so

that you can implement a plan that highlights your strengths and prevents

your weaknesses from hindering your success.

There are a few ways to look at weaknesses. One way is to realize that

sometimes a “perceived” weakness can be turned into a strength. For ex-

ample, if you have a high level of fear, you may channel that fear into action

by focusing your energies on exceptional preparation for the trade and for

entering the market. Once you can cultivate your confidence level (with

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