The only way to become good at trading is by enhancing your self-efficacy beliefs about trading
There are 5 ways to do that in order of importance
- mastery experience: The first and foremost source of self-efficacy is through mastery experiences. To gain mastery experience you need to complete a hard task that challenges you successfully. Finding the right anticipation setups after running a scan and seeing their work will build mastery experience. Or going through Top 25 stocks and anticipating a b/o or b/d and entering it ahead of time will build it. Or identifying the right 3lynch candidate or weak structure short will build it. (Tool: Deep Dive , Bootcamps, mind clarity)
- vicarious experience: watching others do it successfully. The second source of self-efficacy comes from our observation of people around us, especially people we consider role models or good traders. Seeing people similar to ourselves succeed through their sustained effort raises our beliefs that we too possess the capabilities to master the activities needed for success in trading. That is why seating in a cave is unlikely to make you successful but actively participating, watching, and interacting with other traders will. ( Talk to highly successful traders in Bootcamp )
- verbal persuasion is the third source of self-efficacy beliefs. Being told you too can be successful in trading and make tons of money, itself can change your beliefs. Being persuaded that we possess the capabilities to master certain activities means that we are more likely to put in the effort and sustain it when problems arise. ( Daily Zoom Meeting KITA, Bootcamps)
- visualizing yourself behaving effectively or successfully in a trading situation. Imaginary experience is as good as real experience in building self-efficacy. If you understand that and use visualization techniques, your self-efficacy will improve. ( Visualization Scripts)
- positive emotional and psychological state. positive emotions can boost our confidence in our skills. Getting yourself in the right mood at the start of the trading day is essential for that. If you understand and work on these things you can make millions in the stock market. And the best part of this is that all these things are under your own control. ( Stockbee T shirt , the perfumes, the creativity cards)
What is mastery experience?
Mastery experience is basically a successful experience of mastering a task. Mastery experiences happen when the learner has reached the point where they understand the content knowledge enough to perform a task on their own or master the task.
It happens if the learner goes into sufficient depth on the material he is trying to learn. It happens as a result of immersion in a particular field or task. It happens with plenty of prior exposure to the content.
At some stage, the learners are able to interpret the results of their actions and use those results to develop their own capacity to engage in future actions or tasks. Then the learner becomes auto learner. They are able to participate in tasks on a first-hand basis with little or no assistance from outside influences.
When you experience an intense mastery experience you get feedback on your own capabilities.
Long and sustained efforts are required for mastery experience.
Self-efficacy beliefs are critical not only in academic situations but in any task like sports. Self-efficacy beliefs are task-specific. So a person might have high perceived self-efficacy beliefs in one subject but have less self-efficacy in another field.
Self-efficacy builds over a period of time and with more mastery experience you have, you become better at a task and learn other tasks. Mastery experience is the main source of self-efficacy. All other things are secondary.
In training or coaching situations one can structure the situation in such a way that the trainee experiences a mastery experience. This is the fundamental principle used in training commandos and marines. In simulated and controlled situations they are put in situations where intense learning happens in a very short period of time. That creates a mastery experience. That forever enhances the trainee's perceived self-efficacy belief.
Some years ago Discovery Channel had a 6 part series called Navy Seals Buds Class 234, if you watch that, it is an excellent example of creating a mastery experience in a simulated environment. If you work for a successful start-up at an early stage, you will have a mastery experience.
That is why you will find many successful entrepreneurs become serial entrepreneurs. Many people go through a lifetime without having an intense mastery experience in any field and so have low self-efficacy beliefs.
Mastering a market structure and setup is the same process. The aim is to develop self-leadership where you can fix your own errors.
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