INTRODUCTION: Hello Traders. The article below is useful for all areas of human
endeavors (including trading). Please read it to discover a great secret today.
Read between the lines and see how the facts revealed here aptly apply to
trading.
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There are, broadly speaking, two ways to see the world and these have a
great influence on how successful you become.
The first is what psychologists call the “external locus of control,” and
the second is the “internal locus of control.”
You see… as the world around you changes, you can either attribute
success and failure to things you have control over, or to forces outside your
influence.
And which orientation you choose has a huge bearing on your long-term
success.
This concept dates back to the 1960s with Julian Rotter’s investigation
into how people’s behaviours and attitudes affected the outcomes of their
lives.
Locus of control describes what individuals perceive about the underlying
main causes of events in his/her life.
Put more simply:
Are you the pilot of your life or you just a passenger?
Do you believe that your destiny is controlled by you or by external
forces (such as fate, the government, your boss, the system or others)?
Here’s how Charles Duhigg—the author of the book Smarter Faster Better
describes locus of control:
“Locus of control has been a major topic of study within psychology since
the 1950s. Researchers have found that people with an internal locus of control
tend to praise or blame themselves for success or failure, rather than
assigning responsibility to things outside their influence. A student with a
strong internal locus of control, for instance, will attribute good grades to
hard work, rather than natural smarts. A salesman with an internal locus of
control will blame a lost sale on his own lack of hustle, rather than bad
fortune.
“‘Internal locus of control has been linked with academic success, higher
self motivation and social maturity, lower incidences of stress and depression,
and longer life span,’ a team of psychologists wrote in the journal Problems
and Perspectives in Management in 2012. People with an internal locus of
control tend to earn more money, have more friends, stay married longer, and
report greater professional success and satisfaction”
What is an external
locus of control?
Well, we all know those people.
In fact, sometimes we are those people.
Nothing is ever their fault. There is always an excuse. The world is out
to get them, life is unfair.
Duhigg describes it as follows:
“…Having an external locus of control—believing that your life is
primarily influenced by events outside your control—’is correlated with higher
levels of stress, [often]because an individual perceives the situation as
beyond his or her coping abilities,’ the team of psychologists wrote” (24).
The benefits of an
Internal Locus of Control
In general, people with an internal locus of control:
Engage in activities that will improve their situation.
Emphasize striving for achievement.
Work hard to develop their knowledge, skills and abilities.
Are inquisitive, and try to figure out why things turned out the way they
did.
Take note of information that they can use to create positive outcomes in
the future.
Have a more participative management style.
The bottom line:
We aren’t born with an unalterable locus of control, so it is critical to
keep an eye on in ourselves so we can improve the way we look at the world.
Sure, bad things happen to us.
But rather than dwelling on them, it’s better to find a useful belief
about them and move on.
It’s important to remove the idea that your life is dictated by forces
outside of your control.
Of course, to one degree or another, it is. But there is plenty that we
can control. You can create your own luck through study, hard work and
perseverance.
It’s often said that you become a blend of the five people you hang out
with the most.
This is important to keep in mind. Associate with positive people who
believe they are in control of their own lives. Their beliefs and energy will
rub off on you. And then yours will rub off on them.
It becomes a very powerful and positive feedback loop!
Author: Michael Yardney (a
guest blogger at http://tradinggame.com.au)
Author’s profile: Michael Yardney is a
director of Metropole Property Strategists, which creates wealth for its
clients through independent, unbiased property advice and advocacy. He is a
best-selling author, one of Australia’s leading experts in wealth creation
through property and writes the Property Update blog.
PS: 4 useful trading
quotes are also added below:
“There is a wise
saying which came into being primarily since the advent of mechanical trading
systems, and it goes something like this: "Your system will stop working
when someone else builds his system based on your system." Can you see the
truth in that? It is because of that reality that it is best to scout around
for what may be working recently, and why it is a waste of time to backtest a
system or method to see if it has worked for the last 10 years. You can't trade
history you are forced to trade the present in an attempt to take advantage of
the future.” – Joe Ross
“I’m not worried about
being stingy, trying to get every last pip out of a trade; I want out of my
position if the trade is going the wrong way! Do you want to be stingy or do
you want to be OUT??” - Rick Wright
“A winner has the
ability to find positive values from the most negative circumstances. This is
the first reason why only emotionally healthy people can assume risks, they are
able to rise above the superficial negative circumstances, discover trading
opportunities and take decisive trading actions based on the current market
conditions.” – Andy Jordan
“You have no control
over whether you will win or lose – but you have enormous influence over the
beliefs that drive the performance of your trading process. This is the new “Winning Nature” that bridges
the gap between controlling outcome (which is impossible) and controlling your
process (which you can do repeatedly).
This leads to the calm, patient mind need for successful trading.” - Rande Howell
www.tallinex.com wants you to
become a successful trader.
Traders’ Mindset: Trdaders' Mindset
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