Bill Williams - New Trading Dimension.pdf - Trading - marynarz151

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BLASTING OFF

In the market:

honesty Is power,

simplicity Is energy,

and innocence Is ability.

You are standing in the airport terminal of Your Life, and the jet plane departing for the 21st

century is about to take off. You must make a choice: Do you remain in the terminal, eating

the stale vending-machine food of outmoded thinking? Or do you get on the plane and soar

into the stratosphere of trading computerization, swept along by the jet stream of evolving

technology? Do you enjoy the in-flight snack of virtually unlimited information access, secure

in the knowledge that when you encounter the inevitable turbulence of rapid market

fluctuations, you are holding, in this book, the "automatic pilot" of expert advice and

guidance? That is the vision of tomorrow that I am offering you. Let's explore together this

amazing new cyberworld of science and trading. If you don't know about these latest advances

in science and trading, have no fear. I'm not going to bombard you with technical

gobbledygook. I'm going to present you with simple, practical, well-organized, easy-to-

understand information and guidance. If you are ready to travel to places you have never been

before, let's queue up. Our goal in this chapter is to understand how our personal biases

determine whether we become consistent winners or chronic losers. If you are a type A++

trader, you may be tempted to go directly to Chapter Three and begin to use our energetic and

trading dimensions immediately. Instead, I recommend that you study this material from the

beginning. I believe that understanding the underlying structure of trading is imperative if you

hope to reach your potential in trading for profits. Let's begin our journey of understanding by

looking at one of the most important underlying aspects of all markets—and, actually, of any

endeavor we select.

CONTENT VERSUS PROCESS

Suppose that you are a space traveler. You have just landed from a faraway planet, and you

find yourself in a room where a chess set has been arranged on a table. You want to

understand exactly what is going on in this strange Earth. You examine the chess pieces

individually and notice that there are several different shapes and sizes. You want to really

understand, so you do an "electron analysis" of each individual piece. You know the exact

location, size, and makeup of each piece. You thoroughly understand the makeup and the

content of the entire set. But unless and until you understand the process of playing chess, you

will never understand the game and its significance will be lost on you. In over four decades

of observing traders and trading, I have come to the conclusion that most traders approach the

market with the same orientation as our fictitious space traveler. Both are primarily concerned

with content as opposed to process. Our space traveler will never understand the game of

chess until he observes two people playing and competing against each other. This is not

necessarily bad; it just doesn't have a great payoff. We traders do it with each other when we

ask:

• How much did you make this month?

• Did you go long the gold?

• What kind of car do you drive?

• Will you show me your P&L statements?

• Can you give me someone who is using your approach profitably?

• Did you know that this market is heavily oversold?

All the above examples center on content rather than process. Both my scientific background

and my experience in trading have convinced me that the primary difference between winners

and losers is whether they focus on content or process.

ENDING YOUR STRUGGLE AND DANCING WITH THE MARKET

Most guys had this happen in high school. You ask a pretty girl to go to a dance and she

accepts. Now you are in trouble! You fear you will make a fool of yourself dancing and not

only will she never speak to you again, but she will tell all the other girls in the school that

you are a klutz. You practice with your little sister and your cousin before the date. When you

get to the dance, you are determined to make the dancing work. You try hard to be a better

dancer than you really are (you are content-oriented). But because you try so hard, you end up

stepping all over your partner's feet. Your life is ruined; you were never meant to be anything

but an other-handed klutz. If you could have only relaxed and become a bit more process-

oriented, you could have pulled your partner close to you, she could have felt your

movements, and you both would have appeared to be dancing with some skill. The key to

dancing well—and profiting in the market—is an ability to relax and simply go with the flow.

That is what this book is about— getting with the process; letting go and going with the flow.

This material will defuse much of the miseducation of modern technical analysis and

demonstrate the way the market really works and how to profit from that knowledge. When

Trading Chaos was written several years ago, our goal was to take 80 percent out of a trend

move. We wanted to get in on the bottom 10 percent and get out on the top 10 percent of the

price movement. In the intervening years, we have sharpened both our research and our

strategy. Today, our goal is not to take 80 percent from a trend move but to take 300-500

percent of the trend move. Previously, if there was a 200-point move in a commodity or stock,

we were well satisfied with 160 points in our pocket. Now our achievable goal is to bank 600

to 1,000 points on that same move. Unbelievable? Not after you have read this book and seen

the results in your own trading.

THE MARKET VERSUS ME OR THE MARKET AND ME

The average trader feels that trading the markets is a highly stressful occupation. Below are

some actual questions we have received from active traders:

• How can I both enjoy trading and make profits trading the markets?

• Why am I so addicted to doing this when there are so many disappointments (losses)?

• How can I keep serenity inside myself and my loved ones while living in this turbulent

world of the markets?

• How can I stop worrying so much in such a threatening atmosphere?

• Why do so many traders/investors lose money so consistently?

• How can I distinguish among all the hucksters who are hawking their wares as being the

answer, when none of them seems to last even a couple of years?

• Why does my broker give me such bad advice?

• Why do all the newsletters I read boast of such enviable track records, but when I start

trading them, they lose money?

Even when we are winning, there is an undercurrent of fear that the next trade will probably

be a loser. We exhaust ourselves as we try to control the present and the future while our

minds futilely search for ways to recreate the past. We yearn to trade while being more

relaxed, calmer, more in control, and excited about trading. To most traders, the possibility of

that kind of life seems like a long-lost dream. The joy of trading is gone, and our life is filled

with stress. We have tried all the hotlines, newsletters, psychobabble, books, and private

sessions. Our love of the market is wearing thin. Something is very wrong. But what is it? We

often blame government action, bad information, surprising crop and corporate reports, and

other vagaries of the market. But these are not the real causes of our distress and our constant

struggle with the market. The answer lies at a deeper level. After much research and personal

experience, I have come to the conclusion that those who approach trading with serenity

rather than struggle—those who have looked beyond the confusion and mastered the art of

"dancing with the market"—are consistent winners.

Dancing with the market

is mowing with the flow of the market up,

down, or sideways

with a feeling of harmony,

trust, gratitude, and yes, even love.

To really dance well and enjoy the process of dancing, you must let yourself be moved by the

music rather than follow any preplanned agenda. In other words, the dance floor (market)

must become a friendly place. Friendly here means comfort, relaxed enjoyment, and a place

where you feel friendly. Remember Einstein's most important question: Is the universe a

friendly place? I want to assure you, based on not only my personal experience but the

experience of over 700 people whom I have privately trained to become independent

speculators, the market is a friendly place. Any unfriendliness always comes from us, not

from the market. We often hear phrases like "The market stopped me out." The market never

in all its history stopped any trader out. We all do it to ourselves. Win or lose, it is always our

own fault. That is because no one trades the market; we all trade our own personal belief

system. Remember the Jimmy Buffett song "Margaritaville," where the singer concludes that

no one should blame a woman; his problem is his own damned fault. Well, he was right.

Those of you who have worked with me and are familiar with my work know that what I say

comes largely from my own experience. I have had much help and advice from other traders

and from researchers using modern technical tools, but the actual implementation of this

research is a very personal matter. We are going to look closely at how we create our own

internal struggle, which goes on whether we are winning or losing. My 40 years of research

and trading experience have produced what I think is the most successful approach to trading

available today. Recently, I was offered a seven-figure amount if I did NOT show this material

to other traders. That money is a mere pittance compared to what is possible using these

techniques. I have come a long way on this issue of dancing with the market, and I am amazed

at how obvious it all becomes once a person starts experiencing the reality of this approach to

trading. I am reminded of an ancient Buddhist saying: "The road is smooth; why do you throw

rocks before you?" We all do this in the market. All of us, at times, throw rocks before us, and

it is difficult to dance on rocks and come out pain-free. So let's begin by clearing the debris

and making way for a more profitable, peaceful, joyful, and abundant trading life.

RISING ABOVE THE CLOUDS OF DOUBT

To say that trading is simple, easy, and profitable is incredulous to most traders and absolutely

absurd to others. Almost all traders experience a great deal of doubt. In this section, we are

going to look at ways to rise above the clouds of doubt. This will ultimately happen only after

enough experience in using my trading techniques to prove their overall profitability. The key

to rising above doubt is to again realize what game we are playing. The game is trading our

own belief systems. If we want to change our results, we must change our beliefs. Beliefs are

what we "know" to be true. We almost never question our deep beliefs, but that is exactly

what a losing trader must do: question personal beliefs not only about the market but, even

more, about themselves. Very few traders know why they trade, much less how they trade. We

all can spout our superficial reasons: to make money fast, to enjoy competing with other

traders, to gain the prestige of being able to say "I am a trader," and so on. In your last trade,

did you lose because you couldn't see the market going the other way, or because of a deep,

unexamined belief that you shouldn't get rich that easily? If the latter, it's time to free yourself

from some old beliefs.

RELEASING THE OLD BELIEFS

Your next task is to release, get rid of, or, at the very least, become aware of these beliefs. The

best method is to examine the difference between process and content. Classical sciences have

always tended to deal with content. "My head, it hurts" is an example of how the classical

sciences divide everything into three parts:

1. The observer.

2. The thing being observed.

3. The process of observing.

Modern sciences (relativity, quantum physics, and the Science of Chaos) do not create or

condone this separation. A quantum scientist would report, "I am in the process of headaching

myself "—a much more accurate description. Modern science does not believe there is any

such thing as nouns. Everything is energy and all energy is process. Buckminster Fuller titled

his autobiography I Am A Verb. This distinction between process and content will become

very important to our proficiency at dealing with the market. In general, we are educated to be

goal-directed, making what isn't more important than what is. We make lists of our goals,

plan them out, and then neglect the present and live, in our head, in the future. The problem

with living in the land of goals rather than the land of now is that when we center our

attention on the future, we cannot concentrate on or even accurately observe what is

happening now. We can't dance well while thinking about how we are dancing. We can't trade

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