MASTER SERIES #14

PAULA T. WEBB, PHD

Winning Warrior Wealth

(based on “The Disciplined Trader workshops)

As a trader, you already know about analysis, systems, and most education tools needed to get started or stay in the game of trading. However, have you ever thought about what money means to you. I mean the word money. If someone asked you right now, at this very moment without thinking about it, if you thought money was dirty what would you respond. You’d probably respond with a resounding “no.” You might then go on to chat about how money is good, what you will do with some when you make your killing in the market, how you’ll spend it, invest it and so forth.

And yet, how many of us might remember an instance, as a child, where we might have seen a coin or coins in the street, bent down to pick it up, and an adult, usually a parent, yanked our hand away, and said don’t touch that, it’s dirty! Maybe some other adult told you to wash your hands after collecting payment on your paper route. Maybe you learned in Biology or Science class in school about all the germs transmitted through the exchange of money for instance through an experiment with a petri dish.

Taking it a step further, maybe somewhere in your respective religious beliefs you were taught the adage that “money is the root of all evil.” Does that mean that having money makes you evil? It seems to imply that. If you have a religious leader quoting this to you during your formulative years, would it be a safe assumption to say that you probably internalized that quote inside your mental environment in a way that was not positive when it came to expressing, even just to yourself, an opinion about money?

To be clear here – the correct quote was spoken by author and stateman George Bernard Shaw, who wrote that “The lack of money is the root of all evil.” This was a solid perspective that he presented to an international gathering of heads of state from around the world at a symposium in London England in the mid 1920s.

At this point in your professional career, maybe you don’t consciously remember any of these types of instances, but I would say for most of us, something similar to that happened at some point in our early years. Maybe once, or a number of times. So, deep down inside, somewhere in our mental environment, those of us that had any one of those types of experiences may have ended up acquiring a belief, instilled by someone else, that money was dirty. However, I would also suggest that very few of us would pass up paper money lying in the street. I know I haven’t passed up paper money on the ground when I have come across any. Why is that?

From a practical standpoint, obviously certain denominations of money have more value than others. Pennies are worth one cent versus a dollar bill which is worth 100 pennies. So, if we take into account that we have an underlying belief that money is dirty, as adults we begin to choose to make distinctions about what denomination of money is too dirty to pick up, and what denomination is not too dirty to pick up.

Since most of our early experiences were probably based on a scenario involving coins on the ground, and not paper money, we can make the association that smaller denominations are not worth the effort, not worth our effort to dirty ourselves for. Over the years, we may have created more distinct beliefs about what amounts of money are worth our effort to pick up.

Now because the markets completely revolve around money – the only reason we trade is to make money for ourselves – unlike other careers where you would receive a paycheck with a regular amount for services/products rendered, is it no wonder that your trading results are not what you expected they might be?

If you find you have an underlying belief that money is dirty, or not worth the effort to acquire because the denomination is too small, then that same attitude, that very same limiting belief or beliefs therefore flows over into your perception of the markets, and your ability to make money consistently and keep it.

When you put on a trade, you make a quantitative judgment about what it is worth to you. What denomination of money you will wager to create more money with right? You make a quantitative decision based on a number of factors: i.e., your system, your risk/reward ratio, your analysis, and so forth. By negating the smaller denominations (the coins in the street), meaning the smaller, maybe more short term trades that will make less of a profit than say a larger position or a more long term trade (the paper money in the street) – in essence you are negating the overall process of accumulation, and denying yourself an opportunity to increase not only your sense of self-valuation, but your overall trading success.

By continuing to wait for the larger denomination trade or trades (paper money), you will be missing out on the smaller trades (i.e. coins) those smaller trades which are opportunities to solidify your trading consistency, for one, and two, to build confidence in your ability to trade effectively to increase your financial security. More importantly you are telling God repeatedly you do not need money. You only need specific amounts of money – but not all amounts of money not realizing that all smaller amounts of profits you take add up to that specific amount of money you desire.

How do we go about changing beliefs we are not even sure are there, much less affecting our trading results? Start asking yourself just what you believe about money. Not your bank account, your trading account, or your credit card limit.

I’m talking about coins and paper money. Take some out and look at it. Do you have a feeling like you have to wash your hands? If you don’t that great! If you do, then start researching your mental environment, take an inventory of what you think to find out just what your beliefs about money are. You might be surprised at what you discover.

And, once you identify these underlying beliefs instilled by others – if they are no longer productive for you at this point in your life, you can then begin to change the very energy associated with them into a more positive, productive experience.

Let’s begin to learn how to change any unproductive experiences about money with this simple exercise: Imagine, if you will, that same experience when you were a child with the coins on the ground. Imagine now, that adult encouraging you to pick up the coins to put in your piggybank or coin jar for something fun later on. Something that you get to choose.

It is really that simple. Change the underlying, less productive experience into a more productive one for the person you are now! Imagine yourself as that earlier you, enjoying a candy bar, or buying a model airplane kit, stashing the coins in a can under the porch or whatever you choose – using those very same coins found on the ground.

In this exercise, you will begin to change any limiting beliefs you may have inside your mental environment about money into more productive energy. This in turn will translate into your overall trading results improving greatly immediately.