Using EFT

Using EFT to Trade the Market

EFt Tapping Outdated ImageNote: This is one of 3,000 articles written prior to the updated Gold Standard (Official) EFT Tapping Tutorial™.  It provides practical uses for EFT Tapping and most EFT'ers should find it very helpful.  However, if your benefits are temporary or a more in-depth approach is needed, you are urged to explore our newest advancement, Optimal EFT, by reading our free e-book, The Unseen Therapist, and/or (3) get help from a Certified EFT Practitioner.  

Hi Everyone,

Long before I developed EFT, I invested other people's money for them using a "Stock Market System." It was a simple mathematical process that generated minimal risk and produced profits of 2 or 3 times that of a bank savings account. In this 2 part series, Dr. David Lake from Australia does a similar thing for his own personal investments and gives us his thoughts on using EFT to take the emotions out of the process. Excellent article for you investors out there.

Hugs, Gary

Part 1 of 2

Part 2 of 2


By Dr. David Lake

Part 1 of 2

Note: The information in this series is illustrative only and should not be taken as financial advice.

Trading is the activity of speculating in the Market in order to gain an advantage financially. While there are a multitude of systems which teach successful trading, the reason the vast majority of traders lose money is because of emotional reactions while trading. Since the market as a whole is governed and run by the twin emotions of fear and greed, this is not unusual. The way that EFT can help with trading is akin to the way it helps with learning any skill, achieving any goal or harmonizing any relationship problem: it helps you to avoid taking the unavoidable upsets personally.

How easy is that? Just don’t take it personally… !   The market doesn’t know you exist, nor care. It is not out to get you. It is trying to tell you something but you are equally busy trying to impose your beliefs on the market (or your partner, or life, or your business). Markets don’t have opinions—people do! If it were so simple to trade everyone would be wealthy. But the market creeps up on you and makes you want to behave badly. Here’s how it does it.

The best—and only—way to become wealthy when trading is to cut your losses quickly and let your profits run. However, traders consistently find themselves not wanting to close out of a losing position (which then dies spectacularly), or jumping in to a winning one and taking the profit they can see on the board (after which the notional profit increases dramatically). Our greedy intuition tells us to take advantage of the money fact we see in front of us in present time, or to hope that the losing trade will correct itself (a fearful intuition) so that we remain right in our analysis. So it’s personal after all—we want to be right all the time, and know the future of the market, as well as how to predict what will happen by bending and breaking our rules. The ego becomes rampant.

Another way of thinking about profits is that we fear the loss of a profit so we rationalize our taking it too early, or we get greedy and expect the profit to increase and increase (when typically our system rules tell us to get out now). The fear of losses may make us trade “too small”, or paralyse us altogether for fear of being wrong. It’s how much money you actually make when you are right that dictates financial success or failure.

But it is personal and we are only human. I learnt more about myself in 4 years of trading than in 2 decades of personal psychological work It is a never-ending struggle to stop playing the ego game, especially when money is involved. I can’t trade when I am upset or unsettled (actually, I think I can but I always regret it).

The truth is far more prosaic. No-one knows what the market is going to do next. It often behaves irrationally and unpredictably. We can only deal with the last price we see in front of us. Either you go with the market or you go under the steamroller while predicting that it will not run you over (you lose your money again). The ultimate truth and outcome of your struggle with the market will be shown in your trading account.

Obviously, dealing with the emotional hurt of having wrong analysis, and the pain of having to behave counter-intuitively, requires iron discipline and enormous capacity in your inner world to let go of the attachment to being right. Many of the world’s best trading systems are “right” only 40%-50% of the time but those winners can be huge. You win only if your losses are very small—but there are going to be losses. Your ego will suffer.

I use EFT to remain calm when doing anything connected to trading. The twins of fear and greed are easily roused, so tapping with one hand while reading, analyzing, preparing to trade and reviewing the results automatically places me in the position to start treating those manifestations when (not “if”) they arise. It helps to foster detachment, since trading is only a game about life and money. And when those underlying beliefs about money and yourself are triggered, you are predisposed to allow them to be present since you are more relaxed (as a result of tapping) and can more easily accept their reality since they are not going away anytime soon. Slowly the tapping works on their root causes and their power. There are many other important factors in having a settled mind while trading, and these will be the subject of future articles.

Regards,

David Lake, MD

 


Part 2 of 2

Note: The information in this series is illustrative only and should not be taken as financial advice.

The most important part of your trading system is you. Trading the market puts us into conflict with ourselves. Because beginning traders focus only on the profits to come, and the entry signal to their system of choice, and how they will spend those enormous profits, they have no issues at that moment because they are living the dream of denial of trading reality.

If you divide the crucial subjects within a trading system into proportions then the ones dealing with Money Management and Psychology are by far the most important. K. Van Tharp, the ‘guru’ of money management, considers money management to be some 30% of a system’s importance and psychological issues some 60%. The system itself could be one of a huge variety—read “Market Wizards (three volumes) by Jack Schwager to see this.

It is quite remarkable how few systems of trading are only successful in picking “winners” more than 50% of the time (this is the coin toss analogy) but also quite remarkable how some systems, with only 20% of “winners” generate huge profits if you let those winners run while cutting the (small) losses early. Obviously any difficulty in doing this can have profound consequences, so you could trade such a winning system the emotional way and lose your trading bank very quickly indeed.

So what can EFT do in trading? The reality is that nearly all trading mistakes—as reflected in your trading account—are due to emotional errors of judgment regardless of what you know to be correct. This is partly because of the clever trader using a brain designed to see patterns and inter-relationships, instead of following mechanical rules designed to win. It is also that traders are human and thus prone to having unresolved issues of fear and greed.  The result is “predicting” the market, “picking” tops and bottoms” and going for the big win (gambling). Using your ego to trade, and impose on the market. This is a very dangerous gambit.

Every human foible that afflicts people, and every negative self-belief, manifest in the world of trading, so it is not really about the market. It is about our view of the market—our reality—and the feelings that accompany that. Then there is the reality of what is—the market will show you this at any time you wish to know it—and the frustration and confusion that accompany your lack of synchronization, lack of understanding, and lack of resonance with the market. Because the pain of losing money is far greater than the pain of not making enough of it, the fear around losing and taking losses is a giant stumbling block to trading confidence [E.Toppel’s book “Zen In The Markets” is a great resource for learning more about this self-awareness.]

EFT, especially in the form of continual tapping, is a healing balm to these hurt and negative feelings. Please note that since EFT will not take away a legitimate negative feeling (one that is meant to be there, and appropriate), it will not help you to deny reality and calm down about serious errors of not trading according to your rules. What it can do is enable you to trade in a calm state of mind (your trading preparation and execution), and to learn to accept the inevitable losses philosophically (your follow-through). It will help you to ‘listen’ to the market. Most importantly, it will allow you to cut those losses early and to let those winners run until the market or your rules say to stop (then is the only time you actually collect in dollars your paper profits).

More importantly, EFT can help you to find yourself. It is essential to know your own attributes and failings as a trader because if you do not, then the market will teach them to you for thousands of dollars in tuition fees. The purest form of self-awareness and self-knowledge (both positive and negative) arises from the moment of placing money in the market. Suddenly and repeatedly you become aware of faults you had hidden from yourself for years. It is the harshest introduction to your inner world imaginable, for the uninitiated. This is why the EFT treatment often has to be ‘personalized’ for the trader with the fault although experience shows predictable patterns of dysfunctional behavior.

My suggestion during those inevitable moments of extraordinary insight into the depth of your own stupidity? Make sure you are using EFT or actively tapping for as long as possible while you cry yourself to sleep. Seriously, these lessons from life and the market are long overdue, if, like me, you have a big ego. But imagine the horror of having the same lessons repeated, at length, for astounding costs! Ideally you have a system that suits your emotional make-up and whose rules you follow effortlessly and consistently; you also have a written trading and business plan. If not, you join the estimated 95% of traders who don’t make it long-term.

Recently I received this note from Kylie, a market trader who has been applying EFT to her trading issues. She outlines just some of the things that can be achieved when EFT is applied to the emotions behind your trading decisions.

My experiences of EFT and trading.

“I have used EFT on many occasions to assist with my trading. I have traded a variety of derivatives for around 5 years now and so my trading is often fast paced and can be stressful. In trading I’ve learnt more about myself than I ever thought possible, and unfortunately a lot of the things I learnt, I didn’t like and didn’t know how to overcome. I thought I was a conservative type of person; I discovered I had a gambling streak in me. I thought I could deal with losses; I discovered that losses affected me to the point where some days I cried from frustration. I was determined to follow the rules of my trading system, yet I rarely did and I was angry with myself for that. I have blown my trading bank a couple of times, and each time I came back to trading I came back more fearful than before that the same thing would happen. I basically had a huge emotional lake to wallow in and while I knew that the problems with my trading were psychological, I had no idea how to fix them. I heard many people talking about “clearing” the blocks, and “clearing” the emotions, yet no-one could tell me how to do that.

Eventually I stumbled across EFT and I worked with David Lake and Steve Wells specifically for trading issues, including fear of loss, fear of missing out, fear of taking profits, the ability to follow rules, and the general stress that I’d feel when trading. Initially, I felt much calmer when trading, and felt that I could make my decisions easier. I was able to follow the rules of my system without second guessing and without fear. The most amazing result though, was that I felt inspired to develop a whole new trading system, one that really suited my personality and allowed me to feel calm and confident while trading. I worked hard on testing the system and putting it all into place, and earlier this year began to trade it live. I am pleasantly surprised at the progress I’ve made with trading now. I place my trades by the rules of my system without any emotion. I exit my trades by the rules of my system, regardless of my opinion about the market at the time. I don’t feel fear about losing or missing out, and even following a string of losses I still had no hesitation in continuing to follow my system. I now feel that I am capable of trading profitably and with confidence and I feel incredibly relieved!

My new trading system is very simplistic in its approach, which is what I like about it most. Similarly, EFT is also easy to learn and understand, yet it has amazing results. Don’t be fooled by its simplicity – it is a powerful technique that really will change the way you think about trading and yourself.”

 

 

 

 

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