ZF Capital

The length of time it takes you to master trading is totally dependent upon how long it takes to master yourself. People who excel in any activity are excellent because they have become their new beliefs and distinctions. They are not trying to be confident; they are confident. They are not trying to trade free of fear; they have no fear. The act of trying means that you are still not there.

– John Hayden, The 21 Irrefutable Truths of Trading

Integrity is the ability of a trader to trade with complete and uncompromising adherence to his or her virtues, beliefs, and personal trading methodology. Traders with integrity have the ability to enter into a trade with undivided attention, and are not distracted by what anyone else is saying or doing. They know that their trading methodology is completely valid.

People who trade from integrity are operating from a position of strength, free of fear, totally in charge of their mental environment. They will rigorously obey the rules they have developed for their trading methodology. Specifically traders with integrity are immune from what their vices, disempowering beliefs, and unconscious are telling them about the rational reasons the market is acting in a certain way. They will continue to trade within their trading methodology.

Quite simply, traders with integrity will be brutally honest at all times with themselves. They will always hold themselves responsible for their actions and beliefs, and will demand a strict code of personal conduct.

– John Hayden, The 21 Irrefutable Truths of Trading

Money management or risk control strategies are the most critical requirement for a successful trader. Without exception, every outstanding trader will tell you that it is the most important factor that determines your success. All traders starting out make many mistakes, and are constantly making learning distinctions. As these traders obtain good judgment, they will make many new learning distinctions.

Unfortunately, most new learning distinctions result in a loss of equity. Traders who have risk control strategies will be able to survive these errors. Without risk control parameters, the likelihood of losing a large percentage of trading capital will be overwhelming. The preservation of capital is a primary consideration.

– John Hayden, The 21 Irrefutable Truths of Trading

Intuition is a sublime virtue that a lot of traders have false beliefs about. All beginning traders confuse intuition with “into wishing.” It is extremely easy for the novice trader to listen to the thoughts and desires of the unconscious mind, and enter or exit a trade because of “gut feel.” However, every outstanding trader possesses intuition and uses it on a daily basis. Even the great system traders who are totally mechanical use intuition in developing their computer-based trading methodologies.

However, many traders confuse an impulsive or irrational thought that originates in their unconscious mind with a valid intuitive thought– after all, intuition is a spontaneous thought originating in the unconscious. The ability to differentiate between the two is often sublime and illusive.

– John Hayden, The 21 Irrefutable Truths of Trading

Consistently profitable traders possess certain common beliefs about profits. Successful traders believe that profits come to them because they are able to perceive the market as it is. The better their perception, the greater their profit. They think in probabilities, and they know that in time their edge “methodology” will allow them to realize consistent profits. Since they work in probabilities, and since the market will do the unexpected, they will have losses as well as profits. Just as they have no emotional attachment to a loss, they have little emotional attachment to a profit.

– John Hayden, The 21 Irrefutable Truths of Trading