The beliefs exercise is meant to help us sort out what we think about markets vs what is real about markets. The late Van Tharp is quoted as saying “We don’t trade the market, we trade our beliefs about the market”.
For example, if you believe the market is here to take from you, you will act differently than if you think the market is here to hand you opportunity. The key here is not to push away unhelpful beliefs. We need to listen to our beliefs, hear them out, understand them and the file then as helpful or unhelpful as per our goals.
This is meant to be done each quarter as you review your strategy. Write a belief and then, if the belief is true or untrue in the box below.
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
It’s my belief that :
Good work.
This process should be very internal and introspective. It’s ok to return to is as much as you need. We want to learn to hear our beliefs as we have them actively in our trading. Hear our thoughts. We should also be able to turn to them and ask them if they are true or untrue. Often, faulty or unhelpful beliefs, when confronted, disappear. If we do not do this, our unhelpful beliefs have a surprisingly strong ability to direct our actions. This is unhelpful.
This work you are doing is not easy but is will change how you see yourself and the world.