Page 743 - How to Make Money in Stocks Trilogy

Sparring with the Opponent: Arguments with the Ego 43

His overall goal is to be in sync with the market and leave his emotions
and ego out of the equation completely. The market “is like a ballroom
dance: it leads, and we must follow. I try and look at what the market is
telling me and ignore all the other voices including my own.”
Mike Scott admits to having an ego also. Sometimes intraday volatility
makes him want to buy or sell something. There are four things that he does
to keep his ego and his emotions under control:
1. Stop looking at 5-minute intraday charts and watching a stock’s move
every minute during the trading day.
2. Wait until the end of the day to decide whether to buy or hold a stock,
allowing decisions to be calm, rational, and less emotional.
3. Use a weekly chart as the primary way to analyze and make decisions.
The weekly chart shows a longer period of time to analyze a stock’s trend
and lessens emotions associated with daily fluctuations.
4. Get up and walk away from the computer when these strategies don’t
work.

Mike takes walks or rides a bike during the trading session when he dis-
covers that he wants to take action and is about to break some of his trading
rules.
Years ago, Mike learned Zen meditation at the Zen Center in Los
Angeles. Meditation is also something that he does to help him stay focused
and relaxed.
Successful trading begins in the mind. The best traders find a way to relax
and get focused, whether it’s listening to music, taking a walk, exercising, or
meditating. Taking time away from the market is important. A trader must
get back to a grounded place in order to think clearly and operate from a
nonemotional place.