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To: chowder who wrote (8093)	3/1/2006 7:21:45 PM
From: chowder	Read Replies (1) \| Respond to of 13449

Premeditation: Plan the Trade and Stick with the Plan ...... Trading success is largely a matter of maintaining discipline. Once a winning strategy is identified, a trader must execute that strategy over and over again without fail. Traders who impulsively change their mind at the last minute end up losing in the end. It is vital to carefully outline a detailed trading plan and to follow it. This maxim is illustrated in a study by Dr. Antoine Bechara and colleagues at the University of Iowa; they showed that impulsive people who lacked an enduring personality trait called “premeditation” have difficulty distinguishing between winning and losing strategies (Zermatten, Van der Linden, d’Acremont, Jermann, & Bechara, 2005). The sage advice of many trading experts is to develop a detailed trading plan and to follow it. But many traders have trouble sticking with their trading plans. They abandon them prematurely, or they don’t carefully spell out a detailed trading plan at all. For some traders, this lack of discipline may reflect inexperience. With practice, they may learn to outline winning trading plans and to stick with them. Other traders, however, may have more difficulty learning to trade with discipline. Not only may they show a lack of discipline in trading, but a lack of discipline in all areas of their life. They may never plan carefully, preferring to act on the spur of the moment. While conversing with others, they may blurt out things without thinking. They rarely take the time to look at the downside. Most people show more constraint in their everyday lives. When making decisions they think carefully and deliberately. They are reserved and cautious. They take a rational and practical approach. Dr. Bechara and colleagues found that people who did not show premeditation tended to have difficulty choosing gaming strategies that produced a profit. Research participants played a standardized game of chance used in a variety of decision-making studies. Participants were asked to win as much money as possible by choosing winning cards from one of four decks. The card decks differed in terms of the number of winning cards in each deck, and where in the deck the winning cards were placed. Two decks of cards had more winning cards than losing cards, while two other decks had more losing cards than winning cards. In the two losing decks of cards, the winning cards were placed at the beginning of the decks, allowing participants to experience immediate, large rewards. But as more and more cards were drawn, it became apparent that continuing to draw from the deck would produce a loss overall. Drawing cards from the two other decks produced a profit. These findings suggest that traders who trade more deliberately and cautiously will make greater profits overall. They will be able to perceptively evaluate market conditions and choose those strategies that maximize their profits. So when you are trading the markets, don’t act on impulse. Develop a detailed trading plan and follow it. If you can show self-control, you’ll end up taking home huge profits. Innerworth.com (This message is linked to previous articles.)