Specialty Skills

Principle Centered Trading

Dr. Woody Johnson

Have you ever noticed that some people often espouse certain “values” that they hold dear? In fact, they will set themselves apart from others by intimating that they are somehow better because they have different values. This seems especially true of politicians who pontificate about how their family values inform their behavioral decisions while engaging in cheating on a spouse, or violating ethical rules and/or criminal laws. Now, my intention is not to vilify our politicians, even if it is pretty easy; but to show how pervasive this notion of not walking your talk is across the landscape. Take any demographic or group of people. As you look closer into what they say they are going to do and what they actually follow-up on, oftentimes these are quite different. This is true for everybody, this writer included. Part of the issue lies in how we discuss this notion. When someone says that they have values, they often mean that they have a personal standard of behavior that has relative worth, merit or importance, as in “I value being in good health” Or, “I value my friendships”. Then, when an opportunity to follow-through with this value comes up like eating a healthy meal, exercising or being dependable when a friend asks to be picked up in the middle of the night; the person fades into the woodwork and is nowhere to be found. They fail to do what they noisily said they would. In other words, in that instance they balked and became hypocrites. What was actually happening when they pledged allegiance to the value is that they were talking about a “principle.” This distinction is lost to most folks.

Free Trading WorkshopA principle is a fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning. It is what you hold as a standard to aspire to. On the other hand, a value is what and how you are living. If you “value” family relationships you are exhibiting behaviors that truly support healthy, nurturing, honest and compassionate connections with all of your family members. If you “value” good health you are regularly exercising, eating healthily and getting proper rest. Now, if your values are incongruent with your behavior, that doesn’t mean it’s time to curl up in a depressed heap; it just means that you want to be more specific in clarifying your values in order to use those principles that you thought were values as aspirational goals and objectives. Once you make this distinction, you can orient the principle so that you have a set of tasks, intentions and objectives to take the newly identified principle and in time turn it into a value that you are living. In this way you are centering your actions on endearing and enduring principles that function as guidelines for decisions and choices in your trading and in your life.

Principle centered trading is setting your process on a course of rule based protocols, routines and documentation that is guided by a higher standard, beginning with your macro purpose. When your purpose is connected to the what-matters-most in your life this not only sets the groundwork for connecting the energy of what you are most passionate about to the mechanics of trade rule follow-through and commitment keeping, it is also articulating and defining your standards of performance as guided by your principles. This helps you in real time when you come to that fork-in-the-road and you choose the direction in which to proceed. You can choose to go to the left, violate rules, break promises, go off the cliff to crash and burn; or you can choose to go to the right while keeping your highest and best trader at the platform as you trade in your highest and best interests.

Principle centered trading also involves becoming self-aware in order to increase your overall awareness of internal unconscious thoughts, limiting beliefs, and behaviors that are below the radar. In fact, most (well over 90%) of what goes on in your brain/mind is out of your awareness; and you can’t change what you can’t face and you can’t face what you don’t know. Becoming self-aware does not mean self-absorbed as that is an ego function which supports arrogance and hubris. Self-aware simply means that you are monitoring what you are telling yourself; that is, your internal stories and mythology that in many cases are far from reality. Additionally, it is aiming to reframe, redefine and restructure negative self-talk that conjures erratic and negative emotions which, in turn, drive behaviors that are not supportive to follow-through and commitment keeping.

So, the next time that you are loosely talking about your values, you may want to stop and consider whether these are truly values that you are living or principles to which you aspire. Remember, this distinction can be proactively used to support your purpose, goals and objectives in a more focused, organized and congruent way. How you perceive; that is, the “process” of seeing is just as, and in some ways more, important than the “what” you see. Critical thinking that is self-challenging, introspective and self-reflective while guided by high principle centered trading will support the building of a mindset which optimizes resources and brings them to bear on manifesting your purpose and achieving your goals. This is what we teach in “Mastering the Mental Game” online and on-location courses. Ask your Online Trading Academy representative for more information. Also, get my book, From Pain to Profit: Secrets of the Peak Performance Trader.

Happy Trading

Dr. Woody Johnson – wjohnson@tradingacademy.com

This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.