A Lesson on the “As If” Principle
In the 1880s, the psychologist William James developed and began teaching his “As If” principle of life. This might not make any sense to some of you, but it works. For example, if you want to be courageous, try to act courageously. If you want to be a nice guy, start putting a smile on your face and be friendly. If you want to be a great trader, then think like the great traders before us. You cannot be a great trader without first thinking that you are one. You get it?
A person that constantly thinks that he or she will fail in trading, cannot learn how to trade, or just simply has feelings that he or she will “never make it”, will inevitably fail. Think, act, and be like Jesse Livermore, Bernard Baruch, Nicolas Darvas, Gerald Loeb, Richard Wyckoff, William O’Neil, Jim Roppel, Steve Cohen, and many, many others. They play (played) to win and that’s how you should play: play to win.
Soon, you’ll find that your mental and spiritual faculties are like damn fine bartenders. They always give you exactly what you ask for and never ask questions. If you act as though you expect to be a bad trader, your mind and spirit assumes the demeanor of a nobody with little prospect of success. After all, being a nobody doesn’t require much skill at all. None, in fact.
In As You Like It, Shakespeare wrote, “All the word’s a stage, and all the men and women merely players…And one man in his time plays many parts”. William James would tell you to pick out any part in life that you want to play and then play it with all your heart. If you are good at it, that is what you will become. If you pick trading as one of your life’s primary goals, then play it with all your heart. It’s as simple as that, because the “As If” concept works.
Suppose a play has been written for you in which you portray a person who is in the process of making a fortune in trading. The part requires a person of great psychological control, have a burning desire to learn, be able to make quick and informed decisions, possess strong self-discipline, develop and master a winning strategy, be willing to take risks and accept losses, adapt to the ever-changing conditions in the market, have tremendous confidence in his or her’s own abilities.
Could you play that role? You could if you practiced enough, that is, if you worked on your abilities enough. You can do this successfully when you get the focus of your mind to support you and reinforce your efforts.
However, suppose you were assigned a part like this and you chose to play it by dressing up as a bum, slouchy, shiftless, and irresponsible. How about in a lazy, irresolute manner, acting as if you had no ambition, no determination, no confidence, no plan, and no faith in yourself that you could ever accomplish being who you want to be. Combine this with telling yourself, “I can’t do this” or “I’m too afraid” or “I wasn’t cut out to do this“, then you’re really in trouble. This would make a terrible performance and no one would attend!
Consider something: How long would it take a person to become a successful trader if he or she continually depreciated themselves, thinking and talking failure, dressing like failures, and always in an environment that breeds failure? The answer to this question is all too obvious, yet millions of people are trying to achieve a level that never dreamed of ever achieving but still play the part of failures. They do nothing about it, or if they are, they aren’t trying hard enough.
Have you heard of the “poorhouse atmosphere”? Sometimes, you can gauge the quality of a person’s outlook on life by simply looking at them. You can tell how big the streaks of pessimism are in their lives and how much they have been soured by bad experiences. That’s how powerful the effects of their negative thinking have become — it manifests itself in their outwardly appearance. This is truly a powerful force. When people believe the worst about everyone and everything, this is called the “poorhouse atmosphere”. Avoid it at all costs.
The “As If” principle is a tool to get you from where you are right now to where you want to be. So how do you bring about such an extraordinary change? The laws are many, but none are difficult. One of the more important ones is to put yourself apart, letting your energy, determination, eagerness, and faith take you in one direction and one direction only. Focus your efforts through the power of this principle. Whatever you want can be yours. The end result will amaze you.
A great thing about my blog is that traders from all over the world can come here and perform. I view my comments section (and my twitter replies) as a stage. You are the actor/trader. There are many that are giving all that they have and demonstrating that they want to be great traders. I am not blind and I know who all of you are. Your efforts will be greatly rewarded as you all strive to become some of the greatest traders in the world. In fact, that’s one of my goals in life and I have a long ways to go. See you on the other side.
You are the man – I wanna see more shit like this, this post is ballin’!!
thx Moose.
Amen! Good stuff, CA. Methinks you and I would be friends if we knew each other in real life.
Personally, 2008 was a vicious trading year. I was frozen and took huge lumps as a result. I was buried in failure. I sought out good advice. Fly, Jake, RC, Shed and Bill Cara were very kind to me and offered some wisdom. Most importantly, I made a personal choice to win. I went to cash and regrouped for a few months.
I started building positions in a big way in March, as the sell-off climaxed. Happy to report I am at all time highs right now. I’m trading very well, have tons of energy and feeling positive. Wins, all the way around.
I’ve been busy at work transforming a high-potential, but under-performing business unit. For the past two years I’ve been telling my team to look for (and get credit for) the win, no matter how small. At first the wins were delivering on what was expected (on-time project, stay under budget, etc). Soon, my team became known for delivering on-time, on-budget projects. Reliable.
Fast forward to today. We are fricking pulling rabbits out of hats at-will. Up to 280% year over year growth in certain segments and 40% top line revenue growth. Rewards. Accolades.
Fuggin kick ass. My boss says he is concerned my peeps are more loyal to me than the company. Why? I helped them become winners.
Now, the state of winship is so strong I have to regulate them so they don’t burn out. I’m telling them to go home early and work a day from home, that kind of thing. Keep a balance, you know.
Anyway, rambling. Good post. Hope to hang out with you some day.
Moobs, where do you reside? Looks like you’re on a ROLL!
Awesome Booms!!!
Nice work Moobs! Time to bring the old name back if you keep up that kind of Boomin’ performance!
Good show, Moobs.
Sounds like the only misstep was trusting that Obama bullscheiss.
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Exceptional!!
Awesome post man!!! Everything about this is right!! I’m printing this post and gonna read it regularly.
thanks, hope it helps
Good post. It’s nice to see the Richard Wyckoff reference. His autobiography helped me a lot when I was starting out.
Richard Wyckoff was able to work with Livermore himself. And JP Morgan too I think and a few other greats at the turn of the century.
I’ve been wanting to read Think And Grow Rich again. Thanks for condensing it down into 11 paragraphs.
im gettin’ a hammock, just for fun.
Quality Sunday sermon, Reverend. So true. Ties right in with the Law of Attraction and inner-dwelling power of visualization. Rock on.
thanks a lot. That stuff is all true.
Great post CA! Another one to print for the journal to reference. Your point is so true. In my career, if we don’t play our part, no matter how bad the call may be, someone is going to get hurt or killed. Failure is not an option. If things don’t go as planned, learn from it and move on. You are already well on your way to meeting your goals and we are all blessed to learn from you along the way. Thanks for all the time and effort you take to share your experience!
Watching Monday — INHX sitting on 20 day MA and had some more movement up EOD Friday,
USEG which was a rocketship Friday to see if it may move up even more
Will oil related stocks be this week’s biotech rocketships?– still putting a list together this morning of oil related stocks with short interest and/or a “CA friendly” chart (thank you PPT) to check on in pre-mkt….
Practice=Confidence=Success!!!
I wish I had about six more hours every day.
Another great post CA. Your the best.
Still watching SOMX, FEED,UTSI
scalping /ES both directions
also ENER over 12.62
thx frog– adding to my watchlist now….hopefully between all of our eyes on here today we’ll “strike
oil again” (re USEG rocketship action last Friday–company truly did strike oil)
Good Day John,
I was so pessimistic at the end of last year that I made several hundred K just being ignorant. Then starting in March I lost even more. I recognized that I needed to change to being balanced in my trading perspective. Your insight from your videos along with the PPT, StockTwits and some new tools such as StockChart. Com have reurned me to winning.
So, after watching again “Stocks Gone Wild” episode 1 & 2, I combed through hundreds of stocks this weekend using NoteTab Pro, Word and Excel to format them for StockChart.Com and my TradeStation.
Below is my short list formatted for pasting into StockChart.Com for the beginning of this week.
BIOS,DOX,FCH,GIFI,GRRF,GTV,GXP,HCF,HON,HSTX,HSY,IFLO,KEX,KFT,KO,LLTC,LMDIA,LNCR,MDT,MMR,NATH,NTE,PBT,RAH,STE,STRL,TJX,USG,XIU.TO,SAY
RAH is an exception. It may be a nice buy if it is proven out with additional collaborating research. It is a generic supplier to Wal-Mart and other Grocery Stores. If people have to live on the cheap RAH should make money.
I could not find a cause justifying their ‘major’ drop in late September from any of my sources. The only negatives that I found were a downgrade and a drop in the same period by KFT. I have trouble seeing these causes as the only reasons for such a large drop. So like I said this may be a nice buying opportunity with confirming research.
Any comments on my stock list or RAH would be appreciated.
__
Kind Regards,
Winston Welch
Up pre market…adding to what I’m watching
HGSI
BEST (hat tip to Hpuma on PPT)
FCX
Will also add URRE to watch- funny action pre-mkt
HGSI is out
yep…
Great post CA.
I tottaly enjoed it.
Thanks a lot
Short KNDI @ 3.56
Covered KNDI @ 3.33… love those stop loss orders
This principle is quality. Don’t make the mistake of making it trading specific though. If there’s something you’ve been working towards in your personal life, the application of the technique CA has briefly mentioned above can be extremely helpful. Exhibit the characteristics of success to the point they become habit and over time your subconscious will start to believe you.
I am truly impressed by the caliber of like-minded folks on here.
As of this moment… JOEZ still moving up
POT breakout
Short BPOP @ 2.65, appears to be an imminent breakdown on heavy volume… stop out on the days high.
Shorted too early, need to wait for actual breakdown… covered @ 2.68
BEE BTFO …
SRZ moving
ENER moving again.
Great post. It reminds me of “Secret of the Ages”, by Robert Collier. One of the best books ever written, IMO, on the power of thought.
Also, The Moody Blues, from “Nights in White Satin” –
…just what you want to be, you will be in the end.
exactly.
SOMX 2.49
out 2.40
Having a great day here. In heavy on DDRX – fantastic growth play. SBSA, MPG, KFN doing very well as well. Only loser on the board is DSW.
keep it up, bro!
Inverted head and shoulders in DIG with target of $52.
Short SRZ @ 5.53
Covered @ 4.49, nothing going on… revisit tomorrow, strong canidate for a short entry
Sold XTXI @ $6.66 for a 21% gain …
Limit sell on IPI set @ $30.10 ….
Raising cash as I’m looking for an end to this bear rally @ 1110
If that is broken I will reload on a pullback …
11 pts on POT in 5 days , time to take some off the table. Thing ramped all day maybe bots…posible target 114
Gneiss!
SRZ thur she blows!!!!!!!! damnit
Watching GCI
Should I buy FRE and FNM now or wait?????
i’d wait… i’m fairly sure they will go through $1, especially FNM, and get liqudiated to $.90…. then bounce 20-25% on short covering and speculation.
ur nuts.
Short SRZ @ 5.5
Covered @ 5.56
keep eyes on ARM, THC, F, BLC, GRRF
Bought TBUS
dont forget “charts gone wild tonight” …
ohh sorry John, I know , its your job to remind people BUT its a fuckin great show…looking forward to it!
Featuring wet tee-shirted charts on spring break!
I definitely agree with the “as if” principle, but just bring up that you don’t want it to lead to over-confidence either. It’s a balance. For example, see Jimmy Cayne, Fuld, etc…
Sensational !!! Thank you CA.
Took a beating today in JAZZ
Hey CA, what are you gonna go over tonight on your show??
I’ll take suggestions for the show.
cag
can you talk about how you size your positions. Also maybe how you might catch breakouts earlier. Do you put in buy stops just above resistance. I know you said a penny makes a difference so would you put in buy stops 0.01 above resistance? Maybe just talk about entry, managing the position and exits? Thanks man!
asys, cyd, elge, scr
Awesome show again tonight. Very helpful stuff. Thanks.
Another great class. And not boring lol. Great stuff on volume, gap up/down action and odds of future direction following gap, USO and support for oil, gold (not showing indication of break down), use of screeners, doing the work.
Had a list put together for Wednesday am breakout watch– but after watching your video am going to go back through them– especially in relation to the volume issue. Good to hear you use PPT to look for additional picks via industry and other variables– started doing that tonight following RC’s post in user notes on industries moving.
CA- just looking at this: http://chart.ly/kg2gka . Way I’m reading it in terms of actions to take now based on your stocktwit classes to date–is that we’re probably headed down (unless it reverses by open) — and to go through my watchlist stocks looking for signficant gap downs on the open — then watch for entry point to short if volume is there (and considering MAs and trendlines etc.) and follow teaching on exit– (while simultaneously checking for potential upward movements especially in industries moving up w high volume) have I got this right?
Watching WNR, NVAX, DNN out of the gate– and will also scan for stocks that may
open with large gap down