Paradigm Shift: How to Cultivate Equanimity in the Face of Market Uncertainty by Yvan Byeajee.
“If you wish to know the road, inquire of those who have traveled it.”
- Successful trading only happens when you sort out the resistances preventing you from making money
- Dropping our obsession with money somehow gives us more of it
- Equanimity: mental calmness, composure and evenness of temper in difficult situations
Steps on How to Build a Successful Business in Trading
- Develop an idea or concept which aims to satisfy a market inefficiency, diversifies risk and makes money
- Test the idea and see how it performs over time
- We must hold inventory. Buy low, sell high.
- Manage employees. Keep the good ones, get rid of the bad ones.
- Takes insurance to manage risk. Not a matter of “if”, matter of “when”
- Strategic deployment of capital. Diversify so our risks are uncorrelated and dispersed
- Conduct business where there are ample buyers and sellers. Don’t get stuck with your inventory.
- Preserve capital. Avoid going “all in”
- Work towards expansion and scaling. Multiple income streams; courses, coaching, mentoring, writing books
Behavior and Attitude Makes Money
- Consistent returns in trading are a result of the consistency in our behavior
- Winning and consistently winning are two different thing; this is a difficult mental barrier to break
- “Skills > Money” Eagerness to learn and build skills is more important than the monetary rewards
What it Takes to be a Good Trader
- Engagement: acquire knowledge and skills. Find opportunities without risk
- Adaptability and Flexibility in the face of uncertainty: accept changes in the market and embrace failure.
- Self-Control: Control impulses, don’t get into low probability trades. Don’t go “all in”
Trade like a Scientist
- Probabilistic Thinking
- Realistic Expectations
- Self Management
“If you fail to plan, then you plan to fail”
- Human Psychology: volatility indicates strong emotional factors governing the market. Fear drops the price. Greed creates bubbles.
- There is a probabilistic distribution between winners and losers
Equanimity is acceptance, self-understanding and non-attachment. Avoid playing the victim. Never say “woe is me.”
“We all want to learn the way to win, but never accept the way to lose”
“We are what we repeatedly do. Therefore, excellence is not an act, but a habit.”