How to Trade Your Way to Financial Freedom
with Van K. Tharp, Ph.D.
Why It's So Difficult for Most People To Make Money.
- We have a limited capacity for processing information despite the fact, that the amount of information to which we're exposed doubles every year.
- To cope with this limited capacity we’ve developed a number of judgmental and decision making shortcuts. These shortcuts generally help us, but they also produce some serious problems when applied to the world of investing and trading.
- Our emotions provide a background context in which all trading takes place. Emotions very seldom improve, trading performance, but they frequently take away from it.
Determine your own level of self-esteem by answering each of the ten questions below using the following scale:
0 - It doesn't apply to me
1 - It seldom applies to me
2 - It sometimes applies to me
3 - It mostly applies to me
4 It definitely applies to me
_______ 1. I tend to take losses personally.
_______ 2. When people give me gifts I tend to feel uncomfortable or feel I need to give something to them in return.
_______ 3. I tend to blame others for what happens to me or for my problems.
_______ 4. I don't really enjoy being alone with myself.
_______ 5. I have trouble being open with other people and I tend to hold back.
_______ 6. I often need to defend what I say or what I do.
_______ 7. I feet put down when I'm criticized.
_______ 8. I tend to have some shame, guilt and blame.
_______ 9. I get jealous about the good fortune and success of other people.
_______ 10. I need approval, attention and praise from other people to really feel good about myself.
_______ Total
I scored 13. 3rd best group. (1st <=5; 2nd <=10; 3rd 11~20)
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