Info!! 3 Questions To Inquire Nearly Your Trading Psychology

A piddling piece ago, I wrote on the topic of three questions to enquire close whatever market.  That postal service became far together with away the most pop postal service inward 's 10+ years online.  That was followed past times a postal service on 3 questions to enquire close your trading.  All likewise often, nosotros plough to psychology for answers when the stark reality is that our distress together with frustration are caused past times pitiful trading practices.  

In this in conclusion postal service inward the series, we'll accept a expect at 3 questions to enquire close yourself together with your capacity for tiptop performance.  How nosotros deal life exterior of trading plays a key purpose inward how nosotros perform equally traders.  Think of it this way:  all of life is exercise for performance.  Our approaches to life's challenges inevitably shape our approaches to the challenges of markets.  How nosotros grip take away a chance together with chance inward life behave upon our treatment of losses together with gains inward markets--and the contrary is true.  Successful people laid upwardly successful habit patterns, which way that personal life together with functioning acquire mutually reinforcing.

With that inward mind, hither are 3 questions to enquire close your trading psychology:

1)  Am I living a goal-focused life? - There is no extraordinary achievement of a lifetime that does non termination from a succession of extraordinarily productive together with successive days.  Big achievements are the culmination of small, daily achievements.  Getting through twenty-four hours past times twenty-four hours cannot Pb to standout functioning calendar month past times month.  Successful people force the envelope on a daily together with weekly basis, expanding their comfort zones.  That fuels sustained essay over longer fourth dimension periods.  The goal-focused life is a life based on learning, growing, together with developing.  Both stasis together with essay tin acquire habit patterns.  Immersion inward routine is a bully formula for routine performance.  Greatness lies simply beyond routine, beyond our comfort zones.  Small wins--the achievement of small-scale goals--fuels the internal feel of winning, together with that fuels much larger wins.

2)  Am I leading a meaningful together with fulfilling life? - Two of the most of import dimensions of emotional well-being are happiness (doing things that convey joy to your life) together with satisfaction (doing things that are meaningful together with deeply rewarding).  When nosotros experience pregnant together with fulfillment exterior of trading, nosotros are best able to atmospheric condition the ups together with downward of profits together with losses.  We're also most probable to live on inward an energized psychological nation that fuels our focus together with persistence toward goals.  When nosotros lack pregnant together with fulfillment exterior of markets, losses on trades laid out to experience similar losing inward life.  That tin live on extraordinarily disruptive.  When nosotros lack well-being inward the residual of life, likewise oftentimes nosotros essay to industry it inward trading.  That leads to overtrading, where nosotros house our majuscule at take away a chance to a greater extent than for psychological reasons than logical ones.  Look at your relationships; expect at your activities together with interests exterior of markets.  If yous would lack a amount life if yous could non trade, yous volition live on vulnerable inward your trading.

3)  Am I leading an energized life? - We are physical beings, non simply psychological ones.  The nation of our hear is intimately connected to our physical state.  If our bodies are tense or drained, nosotros volition honor it hard to live on calm together with focused.  Meditation together with yoga are methods of using physical activity together with breath command to make novel cognitive together with emotional states.  Aerobic exercise yields important gains inward emotional good beingness together with stress management.  When nosotros are physically energized, nosotros are most probable to live on inquisitive, creative, together with willing to force our envelopes.  When nosotros are operating on a partial battery charge, nosotros acquire through daily activities together with never displace beyond the routine.  Note that i way to Pb an energized life is to Pb a meaningful one, making the most of your spiritual beliefs, values, together with relationships.  All of life, from how nosotros consume together with slumber to how nosotros pass our gratis fourth dimension together with who nosotros pass fourth dimension with, either gives unloose energy or drains it.  Successful people are remarkably successful together with staying plugged inward together with recharged inward all areas of life.

A skillful showtime for working on your trading psychology would live on to move along a personal scorecard that looks at these 3 areas daily:  Am I goal-focused?  Am I doing things that are meaningful?  Am I staying energized?  We tin write inward journals all twenty-four hours long.  Unless we're genuinely working on the areas inward life that are significant, we're unlikely to brand together with sustain positive changes inward life--and inward performance.

Further Reading:  The Mia Principle
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Info!! Trading Psychology Challenges - 3: Inconsistency

Most traders receive got dealt with runs of winning as well as losing trades.  We tin aspect those to travel on only every bit a business office of chance.  H5N1 greater work occurs when nosotros receive got runs of audio as well as unsound trading processes.  In other words, nosotros choke inconsistent inwards our grooming for trading; inconsistent inwards our research; inconsistent inwards our sizing as well as endangerment management; etc.  This inconsistency threatens whatever possible border that nosotros tin receive got inwards markets.

One of the reasons I encourage traders to choke along regular study cards to degree their surgical procedure is thus that they tin grab inconsistency every bit early on every bit possible, earlier it tin sabotage their trading as well as their mindset.  H5N1 trader I of late met with scored himself unusually depression on his mightiness to anticipate risk.  He only failed to engage inwards scenario planning should his seat autumn out of bed on adverse news.  Because he had been trading well, he became comfortable as well as complacent.  We used that lapse to aid him brand the scenario planning component of his daily checklist.  The finish was to review the "what if" contingencies--and mentally/emotionally laid upward for them--*before* putting the merchandise on.

So what causes us to choke inconsistent?  There are 3 of import possibilities:

1)  The marketplace seat has changed.  Our trading tin choke inconsistent when markets themselves instruct out 1 authorities as well as travel into another.  As trends change, correlations with markets change, as well as volatility changes, what had been working may no longer direct fruit.  If you lot discovery that your trading processes receive got remained relatively constant but your results are noticeably worse, you lot desire to receive got a deeper aspect into what you're trading as well as whether it has choke a unlike market.  If so, you lot desire to brand feel of that novel authorities as well as prepare fresh trading ideas based on novel understandings.  Be peculiarly attentive to alterations you lot receive got made inwards your trading processes inwards reaction to changed markets.  One trader I of late spoke with constitute himself trading to a greater extent than often every bit markets became less volatile, inwards essence pressuring himself to brand coin yesteryear taking to a greater extent than trades since each merchandise was yielding less.  That overtrading led to piteous results. 

2)  Our Earth has changed.  In the example from the instant paragraph above, the trader became overconfident as well as overeager afterward a current of winning.  In other situations, nosotros lose consistency when nosotros choke frustrated or fearful.  The Earth alter into struggle or flying way causes us to human activeness inwards a reactive, unplanned fashion.  At such times, nosotros house trades every bit much to deal our states every bit to optimize our profitability. If nosotros discovery that critical portions of our planning receive got been overlooked inwards the oestrus of battle, thus our finish is to run on staying calm, focused, as well as mindful inwards existent time.  In my Trading Psychology 2.0 book I hash out self-hypnosis every bit a way of replacing negative states with positive ones.  The Daily Trading Coach covers a publish of methods for state-shifting, including the role of trance as well as behavioral exposure techniques.  When nosotros tin recognize work states inwards existent time, nosotros tin thus role meditation as well as guided imagery methods to switch into a calm, focused way before the agitated Earth tin hijack our trading.

3)  We receive got choke fatigued.  Fatigue is a special variety of Earth change, every bit it relates to liberate energy bird to a greater extent than than emotionality.  Very often traders pass long hours inwards forepart of screens as well as overtax their willpower.  This is a short-term equivalent of the burnout described inwards the recent post.  In that situation, nosotros take away to renew ourselves, typically yesteryear getting away from screens as well as entering a unlike way as well as Earth that is stimulating as well as renewing.  Taking an practise intermission midday, getting off the desk as well as talking with colleagues--these are ways of shifting gears that tin travel renewing.  Getting the correct sum as well as character of slumber at nighttime is too an of import consideration, every bit the lack of restorative slumber tin Pb to diminished concentration as well as susceptibility to inconsistent trading.  The positive direct upon of salubrious eating, salubrious exercise, salubrious slumber patterns cannot travel when it comes to optimizing one's liberate energy level.  Building positive, stimulating activities into non-trading time tin too travel highly renewing.

In short, at that topographic point is no unmarried answer for inconsistent trading, every bit at that topographic point are many potential causes.  As a rule, if your procedure is inconsistent, thus Earth changes could good travel the trigger as well as culprit.  If your processes receive got remained rigorous but results receive got gone downhill, it could travel a sign of changing marketplace seat regimes--important information inwards itself.  Inconsistency inwards trading mostly way that you lot receive got fruitful run to do, either on yourself or on markets.

Further Reading:  To Improve Discipline, Focus on Your Fulfillment

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Info!! Overcoming The Triggers To Pathetic Trading

I've been doing quite a few destination of twelvemonth reviews amongst traders I operate with.  Here is an lawsuit of something a trader mightiness say every bit purpose of their review:

"I took also many trades this past times twelvemonth in addition to didn't brand the most of my best ideas.  I involve to boundary my seat out of trades inwards 2018 in addition to size upwardly my best ones."

That's swell every bit a goal.  The query remains:  How are you lot going to brand these changes?

There is much to a greater extent than to changing conduct patterns than exactly stating goals.  Goal setting is solely ane footstep inwards the alter process.  Creating a innovation for making the alter comes next.

Where traders autumn brusk inwards planning is that they thought their pitiable trading every bit *the* problem, when it near ever is the result of an actual problem.  If the trader is taking also many trades, the query becomes:  What triggers this blueprint of overtrading?

It's the triggers that are the actual problems.

This is a telephone substitution insight.

Here's about other crucial insight:  Your best trading occurs inwards a distinctive state of heed in addition to body.  Trading good is state-dependent.

Triggers sabotage trading past times nudging us out of our ideal states for processing marketplace information.

When nosotros drib dead frustrated or bored or distracted, nosotros move into a dissimilar cognitive, emotional, in addition to physical state.  In that novel state, nosotros oftentimes procedure information reactively, impulsively.  This is truthful whether we're inwards a heated marital argument, driving inwards heavy traffic, bored inwards a deadening market, or feeling the pressure level of functioning on the concluding hole of a golf game tournament.  The province of affairs triggers a state-shift in addition to that colors what nosotros do in addition to how nosotros do it.

So dorsum to our trader who wishes to overcome overtrading.  Good intentions in addition to efforts at "discipline" won't cutting it.  What is needed is a careful analysis of the situations that are triggering the overtrading, so that these tin last anticipated in addition to intercepted.  If I know that a losing merchandise to laid out the twenty-four hr catamenia tin trigger fright in addition to negativity in addition to forbid me from properly acting on subsequent opportunity, thus I tin educate a routine for constructive self-talk afterwards whatsoever early on loss.  

In other words, we offset drib dead practiced at identifying our triggers in addition to thus nosotros progress past times pausing from what we're doing to reset our mindframe in addition to furnish to the state inwards which nosotros do our best trading.  Your border inwards markets is never *just* your ideas in addition to research.  Your border is also your powerfulness to clearly run across those ideas play out in addition to deed upon them inwards the correct way.  The correct state of heed mightiness non last sufficient for winning inwards markets, but it is necessary.       

Our triggers distract us from our best ideas in addition to taking wages of these.  Truly, nosotros cannot achieve large things if we're distracted past times piffling things.  When nosotros fear our triggers to a greater extent than than nosotros fright missing marketplace movement, we've taken a huge footstep toward gaining self-control in addition to consistency inwards our trading.  There are skills nosotros tin acquire to intercept triggers in addition to state shifts in addition to speedily pick out ourselves dorsum to our trading equilibrium.  Developing those skills is ane of the most powerful plans nosotros tin do for supercharging functioning inwards the novel year.

Further Reading:  Overcoming Common Trading Psychology Problems

LINKS TO MORE TRADING PSYCHOLOGY ARTICLES

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Info!! 3 Techniques For Edifice Positive Trading Patterns

In the final post, nosotros took a await at negative patterns that touching on trading together with how nosotros tin disrupt them together with hit greater command over determination making.  But what are unopen to ways of edifice positive patterns for ourselves?  When I assembled a cookbook of time-tested self-help strategies for traders, 3 approaches stood out:

*  Behavioral - Here nosotros learn ourselves strategies to heighten our focus together with to tiresome ourselves downward physically.  Meditation tin hold upwards rattling helpful for this, every bit tin repose exercises, particularly when paired amongst biofeedback.  The thought is that nosotros acquire to sustain states of bespeak heed together with torso that are incompatible amongst the fight-or-flight responses of stress.  When nosotros tiresome downward our bodies together with focus our minds, it is rattling hard to overreact to situations together with brand impulsive decisions.  In the calm, focused state, it's also easiest to sentiment our situations from a dissimilar perspective, every bit inward the cognitive approach below.  An advanced behavioral method is exposure therapy, inward which nosotros expose ourselves to stressful situations (either inward existent life or through brilliant imagery) acre sustaining our calm, focused state.  This helps to literally reprogram our emotional responses to situations, which is rattling helpful inward dealing amongst performance-related stresses.  

*  Cognitive - As the Aurelius quote inward a higher house illustrates, the cognitive perspective on stress is that it is our interpretations of events--and non the events themselves--that plough normal trading stress into the form of distress that could impair our decision-making.  In cognitive work, nosotros utilization journaling together with other methods to acquire ameliorate observers of the habitual thought patterns that tin interfere amongst audio performance.  Some of us accept learned perfectionistic ways of thinking; others accept learned worry patterns or overconfident ways of processing information.  When nosotros utilization a mag (or meetings amongst a coach) to intend close our thinking together with actively challenge non-constructive thought, nosotros unlearn those distorted ways of viewing situations together with tin acquire to supervene upon them amongst more helpful self-talk.  Cognitive exercises tin also hold upwards used for brain-training:  developing greater resources for willpower together with purposeful behavior.

*  Solution-Focused - In behavioral together with cognitive methods, nosotros acquire to modify negative patterns that interfere amongst trading.  Solution-focused methods come upwards at self-development from the opposite angle:  identifying occasions inward which nosotros are *not* experiencing problems together with looking to those occasions for what we're doing right.  Often, when we're performing at our best, it's because we're drawing upon our best practices together with our greatest strengths.  What are nosotros doing when we're managing risk well, next plans effectively, adapting to marketplace changes, together with generating dandy trading ideas?  In contrary engineering our successes, nosotros tin oft reveal the solutions to the problems that touching on our electrical flow trading.

Of course, these 3 approaches tin hold upwards integrated rattling easily.  For instance, nosotros tin mentally rehearse our best practices (solution-focus) inward our calm, focused nation (behavioral) together with and then imagine ourselves using those best practices inward challenging trading situations (cognitive).  That would assist plough those best practices into our best routines.  There is hence much to a greater extent than to trading psychology than writing inward a mag together with telling ourselves to hold upwards to a greater extent than disciplined or to a greater extent than attentive to our gut.  It is through behavioral, cognitive, together with solution-focused methods that nosotros tin genuinely acquire our ain trading coaches.

Further Reading:  Every Great Trader is a Player-Coach
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Info!! Trading Psychology Challenges - 7: Overtrading

Sound trading lies at the intersection of rigorous thought together with decisive action.  Without rigorous thought, nosotros merchandise randomness together with autumn prey to impulse.  Without decisive action, nosotros betray our best ideas.

Overtrading occurs when nosotros accept run a peril without a clear border inward our trade.  On the surface, this seems similar madness.  Why would a rational human beingness run a peril their hard-earned majuscule on an thought without merit?  The response is that fifty-fifty rational human beings tin autumn brusk of consistent rationality.  Under weather condition of fear, greed, frustration, together with overconfidence, nosotros tin human activity mindlessly--in ways nosotros would never contemplate if nosotros were inward our normal, grounded state.

Peak functioning requires total focus.  Any distraction impairs efforts that require concentration together with blueprint recognition.  Watch weightlifters earlier they snatch their weights; golfers earlier their putts; kickers earlier their plain finish attempts; basketball game players earlier taking a complimentary throw:  all volition compose themselves, larn themselves inward the correct terra firma of mind, together with and thence perform.  Great performers summon focus at will.  They direct hold stronger focus muscles, together with they direct hold superior command over those focus muscles.

Suppose a surgeon finds himself distracted right away prior to a surgery.  Would he or she blindly become frontwards together with brand an incision?  Of course of education not.  The surgeon would outset notice their focus, brand certain the squad has made the necessary preparations, carefully review the surgical plan, together with entirely together with thence displace forward.  Above all else, produce no impairment is the commitment of every physician.  Life is precious.

Every merchandise is an incision inward your internet worth.  The majuscule you're trading is precious.  When nosotros notice ourselves distracted or emotionally aroused during the trading day, nosotros demand to produce what the surgeon, weightlifter, or golfer would do:  tedious ourselves downward together with engage inward a routine that reinstates focus.  Slowed together with deepened breathing, accompanied past times a review and/or visualization of what nosotros desire to locomote doing, tin locomote real helpful inward grounding ourselves.

I'm a large fan of keeping 2 lists at one's side during trading.  One is a to-do listing that captures everything you lot await at together with everything you lot produce when you're trading at your best.  The other is a to-don't list, which captures all the incorrect things you lot engage inward when you lot merchandise poorly.  With those lists inward front end of you, it's slow to send a focused review earlier placing the merchandise to ensure that you're aligned alongside your best practices together with non repeating your worst ones.

In recent posts, I've addressed steps nosotros tin accept when our trading is impacted past times performance pressures; anger or frustration; together with negative, perfectionistic thinking.  All of these tin atomic number 82 us to human activity on impulse together with overtrade.  I'm currently working alongside several traders who are having unusually successful years.  They direct hold demonstrated an improved might to grab themselves inward the incorrect states during the trading twenty-four hours together with refocus their efforts.  Improved self-awareness has enabled them to operate on their mindstates inward existent time.

Equally important, however, is to avoid overtrading that results from boredom.  Many times traders notice themselves staring at screens fifty-fifty during times when they know they shouldn't locomote trading.  Sure enough, they notice something that looks meaningful together with human activity upon it, without clearly thinking through a bigger moving painting together with plan.  In such situations, it is non plenty to only count upon "discipline" to avoid the overtrading.  What is needed are positive, alternate activities that volition displace your trading forward, fifty-fifty when you're non trading.

Those alternate activities could include rejuvenating oneself through exercise, social interaction, or meditation.  They too could include getting away from the desk to operate on query together with generating the side past times side laid upwardly of ideas.  Many traders I operate alongside identify--in advance together with inward their calendars--the hours inward which they desire to locomote trading together with hours inward which they desire to locomote doing other things.  There is no fourth dimension for boredom--every hr is moving you lot frontwards inward around fashion.

The cure for overtrading is self-mastery.  When your caput is inward the game, you lot operate on the game.  When your caput is elsewhere, you lot operate on your head.  Approaching trading the means surgeons approach their arts and crafts is a bully means to avoid doing harm

Further Reading:  

An Exercise for Overcoming Overtrading

A Creative Cure for Overtrading

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Info!! Trading Inwards The Period Of Time State: Cultivating Perceptual Creativity

I've received a release of questions close my recent post service on achieving unusually rigid focus inwards trading together with stress impacts performance, but rarely create nosotros encounter how nosotros perceive together with perform completely gratis from stress, distraction, together with the interference of self-talk.  I've focused inwards the yesteryear on emotional creativity--the mightiness to suit to situations alongside novel responses--and I create believe that's of import inwards changing our behavioral patterns.  What I experienced alongside the meditation, however, was something different.  It was perceptual creativity.  I literally saw the marketplace position differently.

Perceptual inventiveness is something nosotros to a greater extent than ordinarily associate alongside art.  Influenza A virus subtype H5N1 skilled creative soul sees their acre of report inwards a fresh agency together with captures that vision through the pigment brush (painter) or through stimulate (dancer).  It is odd to intend of trading every bit akin to art, but it may good live on that it's the trader who sees what others create non is able to generate ideas together with trades that others cannot see.

My hypothesis is twofold:

1)  We generate unusually high degrees of focus when nosotros raise ane sensory modality at the expense of others.  This is the mutual chemical element inwards diverse meditation practices, every bit good every bit hypnosis.  We larn into a unlike zone when nosotros close off sure enough sensory modalities together with concentrate on one.

2)  In those really high states of focus, nosotros accomplish altered states of awareness that enable us to perceive the footing only about us differently.

A practiced event of this are isolation tanks inwards which people float inwards tabular array salt H2O that is kept at torso temperature.  There is no light, no sound, together with no sensation, every bit yous can't actually experience your torso when surrounded yesteryear tabular array salt H2O of the same temperature.  In that surround of sensory isolation, it is possible to accomplish odd focus together with peace of mind.  Interestingly, when I've stepped out of the tank, the footing has *looked* unlike to me...more vivid...more alive.  I experience split upwards from the footing but experience a feel of awe inwards observing the world.  That is altered, creative perception.

It is the depth of the focus experience (which correlates alongside the duration of the meditation/hypnosis/isolation routine) that leads to the odd put down shift.  It is eye-opening to experience, commencement hand, that emptying the heed leads non to the poverty of loneliness, but the richness of solitude.  I strongly suspect that the intensification of focus inside relationships (think of having a especial dinner alongside ane yous love) is an of import factor of intimacy together with connectedness.  In a put down of mental clutter, nosotros don't really connect alongside others; banking concern complaint how, fifty-fifty inwards a footing of social media together with online connectedness, a pregnant release of people experience lonely.  Perceptual together with emotional inventiveness proceed relationships live on together with renewed, together with perchance they besides proceed our trading fresh together with adaptive.

Further Reading:  Training Our Brains For Trading Success

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Info!! A Powerful Technique For Changing Your Trading Psychology

In the in conclusion post, nosotros took a hold back at 4 patterns that commonly demonstrate upwards when traders experience emotional challenges to their trading.  The underlying drivers of these patterns are frustration (over losses or missed trades), distorted thinking (overly optimistic/pessimistic next wins/losses), in addition to anxiety (over possibilities of losing coin or failing to brand money).  Once those triggers are activated in addition to nosotros cash inwards one's chips frustrated, overconfident, negative, or fearful, it's like shooting fish in a barrel for those states to coloring our views of markets in addition to our adjacent decisions in addition to actions.

So how tin nosotros preclude cognitive in addition to emotional triggers from sabotaging our trading?

My favorite approach addresses prevention rather than care:  non allowing country shifts to shift our trading processes.

The approach begins amongst acceptance.  We are non going to eliminate frustration, uncertainty, or mood swings.  Trading operates inwards an environs of doubtfulness in addition to risk.  That volition elicit unwanted thoughts in addition to emotions at times.  It's OK to endure human in addition to to create got human feelings.  It's going to happen.

Once nosotros select that these patterns volition crop up, nosotros tin in addition to thence actively anticipate them.  Instead of putting them out of our minds, nosotros desire to brand them our focus.

Once we're inwards that country of acceptance, nosotros desire to brand purpose of a straightforward, but powerful stress administration routine.  We take away heed to peaceful, relaxing music; closed our eyes; dull in addition to deepen our breathing; in addition to sit down real yet piece slowing downward in addition to focusing on the music.  We purpose the breathing to convey our body's degree of arousal down, in addition to nosotros purpose the closed listening to the music to intensify our cognitive focus.  Through this routine, nosotros maintain ourselves out of the "flight or fight" means of stress in addition to into a means of peaceful alertness.

The stress administration routine requires roughly practice, thence nosotros desire to repeat the exercise a few times a hateful solar daytime for several days to cash inwards one's chips practiced at reaching that peaceful alarm state.  With practice, nosotros tin focus ourselves in addition to larn ourselves out of struggle or flying means on demand.

Then, i time we've cash inwards one's chips practiced at the stress management, nosotros produce the exercise amongst the music in addition to deep breathing, but at i time nosotros add together imagery.  We imagine the challenging marketplace situations that unremarkably trigger our frustration, distorted thinking, anxiety, etc.  In other words, piece we're playing the music in addition to breathing slowly, we're vividly walking ourselves through situations where nosotros missy a trade, lose money, cash inwards one's chips into drawdown, merchandise poorly, etc.  While you're imagining those situations, you lot desire to genuinely imagine in addition to *feel* those emotional responses that create got sabotaged your trading inwards the past:  you lot desire to experience the fright or greed or frustration.

But you're at i time experiencing those emotions piece you lot are inwards control, focused in addition to relaxed.  You maintain focusing on those situations in addition to emotions until you lot tin remain inwards your calm, focused zone.  

This is an exercise you'll desire to produce every hateful solar daytime earlier the outset of trading in addition to mayhap also during midday breaks.  The repetition allows you lot to actively confront emotional challenges piece staying inwards control.  Through repeated experience, we reprogram our negative patterns of idea in addition to emotion.  We experience them, but they no longer define or command us. 

Once we've achieved a degree of credence in addition to self-control, nosotros in addition to thence add together a concluding part to our imagery work:  nosotros vividly imagine the work scenarios in addition to our negative emotional in addition to cognitive reactions to those, but at i time nosotros also vividly walk ourselves through how nosotros would similar to bargain amongst those reactions.  So, for example, nosotros mightiness imagine missing a merchandise in addition to feeling frustration in addition to thinking how stupid nosotros are in addition to and thence visualize ourselves stepping dorsum from the shroud temporarily, doing roughly deep breathing, in addition to coaching ourselves inwards a to a greater extent than constructive mode, telling ourselves that it's OK to missy something, that opportunities volition cash inwards one's chips on to arise, that the of import affair is to remain focused for hereafter opportunity, etc.

All of this mental rehearsal is also done piece we're breathing deeply in addition to like shooting fish in a barrel in addition to listening to the relaxing music piece seated inwards a yet position.  So through repeated mental rehearsal, we're imagining situations that upset us--and we're practicing ways of thinking in addition to behaving to grip those situations constructively.

The repeated mental rehearsal builds novel habit patterns for us.  As nosotros build those novel habits, nosotros tin in addition to thence experience frustrating in addition to discouraging situations inwards our trading, select a few deep breaths, in addition to engage inwards the constructive self-talk in addition to actions that we've been rehearsing.  The visualization exercises human activity equally practice, thence that nosotros are to a greater extent than prepared to sustain command during actual trading.

Over time, this accomplishes prevention.  We yet experience losses, nosotros yet create got frustrating experiences, nosotros yet experience airheaded at times, but at i time nosotros create got a laid of tools for staying calm, staying focused, in addition to staying inwards command past times responding to these challenges inwards the ways we've practiced.  Once nosotros select that emotional in addition to cognitive overreactions volition occur, it becomes easier to anticipate them in addition to bargain amongst them effectively.

Further Reading:  Performance Anxiety inwards Trading equally a Cause of Discipline Lapse

For those looking to cash inwards one's chips into greater depth into related topics, The Daily Trading Coach book contains a cookbook of psychological techniques for traders.  The Trading Psychology 2.0 book contains strategies for enhancing positive emotional experiences equally a means to buffer trading stresses.
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Info!! The Surprising Argue We're Non Inwards The Zone When Nosotros Trade

If you lot click on the graphical display above, you'll come across the results of a really elementary demonstration using heart charge per unit of measurement variability biofeedback.  (I used the Heart Math Freeze Framer biofeedback organization for the demonstration; the newer version is called em-Wave.) 
In the demonstration, I initiative off attempted to endure into too rest "in the zone" past times regulating my breathing too sustaining focused concentration.  Notice the regular sine-wave rhythms inward the exceed display.  The finger sensor to the biofeedback unit of measurement is picking upwardly a high flat of "coherence" inward the variability of my ticker beats.  This coherence has been associated with greater emotional good being, improved cognitive performance, too enhanced access to intuition.  

The bottom left display shows that I am performance "in the zone" during this catamenia of coherence.  Over that period, almost all my scores autumn into the greenish (high) coherence category (bottom correct frame).  When hooked to the unit, you lot tin flame come across your rhythms, whether you're inward the zone, too whether you're scoring inward the greenish area.  All of these hand you lot instantaneous feedback to allow you lot know if your self-control efforts are succeeding.

Notice the alter inward my rhythms (top panel) almost midway through the demonstration.  At that point, I began talking aloud almost fiscal markets inward a flow of consciousness fashion.  I was *not* talking almost anything stressful, but notice that precisely taking my hear off the self-control efforts was sufficient to larn me out of the zone (bottom left panel) too seat my readings inward the cherry zone.

This is really important, because it suggests that it doesn't accept frustrations too losing trades to nudge us out of our zones.  Our normal daily routines accept us out of our optimal states of consciousness.  Once nosotros get down talking, walking, watching screens, etc., nosotros are no longer inward that heightened country of focus too self-control that represents our performance zone.  

You tin flame come across that I was inward the zone from the really commencement of the demonstration.  It takes me niggling fourth dimension to larn into the zone, because of years of practice.  Note, however, that fifty-fifty this exercise was non sufficient to popular off on me from leaving the zone 1 time I went into the talk-aloud mode.  Where the exercise has helped is inward returning to the zone 1 time I honour myself distracted, frustrated, etc.  That is useful, but it doesn't address the to a greater extent than basic problem:  our daily piece of job routines are incompatible amongst our optimal performance zone.  

If this is the case, taking trading breaks too preceding piece of job days amongst meditation are helpful, but the existent challenge is sustaining the zone spell nosotros are making decisions inward fiscal markets.  This would demand a really dissimilar piece of job routine: 1 inward which nosotros are minimally distracted, minimally active, too highly self-controlled inward our breathing too focus.  Online chat?  Switching from hide to hide to come across what is moving?  Little to none of what nosotros unremarkably produce when we're trading popular off on us inward a zone too indeed accept us out of our ideal state.

Nor would writing inward journals or talking amongst trading coaches assist the situation.  Only a alter inward our trading procedure too preparation to sustain the zone inward existent fourth dimension would enable us to brand decisions from an optimal state.  This is really a frontier of trading psychology.

Further Reading:  Heart Rate Variability too Self Control inward Trading
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Info!! Turning Emotional Trading Into Informed Trading

Apparently in that location were around audio character issues during the latter component of my webinar presentation yesterday.  For those who missed around of the ideas that I volition last roofing inwards the summertime workshop inwards Chicago, I'll sketch those out inwards 2 posts.  

The commencement regard is that many of our patterns of wretched trading are themselves triggered past times shifts inwards emotional state.  Among the to a greater extent than mutual emotional triggers are:

• Overeagerness together with overconfidence - Winning tin skew our subsequent determination making;
• Frustration together with anger - When nosotros lose, our frustration tin atomic number 82 to impulsive decisions;
• Anxiety together with uncertainty - Fear of losing tin interfere alongside proper direct chances taking;
• Negativity together with depression - Losing tin commence to experience similar existence a loser 

An of import regulation is that many, many of these emotional triggers are themselves laid upward off past times changes inwards the marketplace.  When markets modify their volatility, trend, etc., the trading patterns that worked at i fourth dimension no longer work.  Patterns that had non worked similar a shot all of a abrupt appear to come upward to life.  The wise trader entertains the hypothesis that emotional nation shifts are potential indications of changing marketplace position regimes.  The emotions nosotros experience are information that tell us to footstep dorsum together with reassess marketplace position behavior.  

In other words, nosotros tin operate our emotional awareness to teach to a greater extent than emotionally intelligent.  Once nosotros shift states together with recognize that a trigger has occurred, nosotros footstep dorsum from trading together with reevaluate our expectations together with ideas.  Emotions teach a tool for flexibility together with adaptability--not a trigger for stiff deportment together with wretched trading. 

Too often, nosotros process emotional responses equally things to overcome or avoid.  If nosotros are closely attuned to the markets we're trading, how nosotros experience tin ofttimes furnish the commencement clues equally to something dissimilar inwards those markets that nosotros require to pay attending to.

Further Reading:  Trading Emotionally, With Intelligence

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Info!! Leaving Your Comfort Zone Together With Entering The Functioning Zone

We've all heard close performing "in the zone", that acre of beingness inwards which nosotros are as well as thence absorbed inwards our activeness that nosotros lose self-awareness as well as awareness of things some us.  This has been called the current state, as well as it's been linked to inventiveness as well as emotional well-being.  When nosotros perform inwards the zone, nosotros run inwards a unlike acre of hear as well as body--an altered acre of consciousness.  We come inwards that acre equally the upshot of intense, sustained concentration fueled past times deep interest.

Therein lies the challenge for traders.  What nosotros produce to rest inwards our comfort zones keeps us out of the functioning zone.  We cannot rest inwards our commons states of hear as well as promise to move unusually focused as well as inwards flow.  Our normal states of hear are non optimal states of mind:  nosotros are equally good distracted, equally good self-focused, equally good broadly aware to move deeply aware.

To move sure, those normal states of hear are useful for normal living.  Broad awareness as well as high sensitivity to events some us tin flame move useful when we're driving a car or navigating political party conversations.  Normal life does non telephone phone for immersion as well as optimal performance, as well as normal life becomes our norm--what becomes our comfort zone.

We gear upwards for trading past times studying marketplace patterns, as well as nosotros gear upwards for trading past times writing inwards journals, creating our plans, as well as anticipating marketplace scenarios.  Rarely, however, produce nosotros gear upwards for trading past times preparing our acre of awareness.  If nosotros don't educate ourselves to sustain current states inwards our preparation, tin flame nosotros actually await to access them inwards the oestrus of marketplace activity?

In coming weeks, I volition move revisiting biofeedback equally a preparation tool for preparing the day's trading.  The persuasion is to educate ourselves to sustain focused awareness during our marketplace preparation as well as thence that nosotros are to a greater extent than probable to plow over that focus during the day's activity.  It may move the representative that encephalon preparation is the best psychological preparation of all, enabling us to run inwards the zone to a greater extent than consistently as well as for longer periods of time.  More to come upwards re: this project.

Further Reading:  Three Uses for Biofeedback inwards Trading
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Info!! Trading Notes: Calendar Week Of 8/24/15

Friday, August 28th

*  Buying weakness yesterday ended upwards beingness a useful strategy for much of the day, exactly a potent selloff as well as and thus buying reversal inward the concluding 2 hours of the trading session made for volatile trading.  I hold to await these volatility aftershocks to endure amongst us, equally noted inward Wednesday's post.  That beingness said, the pure volatility mensurate has been mostly trending downwards over the yesteryear several sessions, though it's yet at historically high levels.  

*  The blueprint of improving breadth has continued.  Interestingly, nosotros had 131 stocks across all exchanges register fresh novel monthly highs as well as 136 brand novel lows.  That novel depression figure compares amongst 726 as well as 840 during the prior 2 sessions as well as 3553 at what appears to endure a momentum low.  As long equally nosotros encounter higher prices, potent NYSE TICK readings, as well as improving breadth, my game innovation is to purchase weakness, specially if it tin arrive at the axe concord higher upwards the overnight lows.

*    Pertinent to the number of declining, exactly yet high volatility, is the pass upwards inward book inward SPY over the yesteryear several sessions.  We peaked at 507 1 chiliad m shares traded on Monday, as well as thus roughly 369, 339, as well as 275 1 chiliad m the yesteryear iii days.  One of my quant routines estimates the probable day's arrive at (very helpful for establishing cost targets on trades), amongst book equally a major input.  By seeing how today's book unfolds, nosotros tin arrive at the axe approximate the probable day's book as well as brand informed estimates equally to probable cost arrive at for SPY.

*  H5N1 mensurate of the breadth of marketplace position clit that I rails daily is the number of NYSE shares that arrive at purchase vs. sell signals for diverse technical measures.  Yesterday nosotros had 520 purchase signals vs. 20 sells for the Parabolic/SAR measure.  We've had xi occasions where we've had over 400 purchase signals on that mensurate since June, 2014, when I began collecting the data.  Three days later, SPY has been upwards viii times, downwards 3 for an average gain of +.49%.  It's equally good pocket-size a sample to hang our hats on, exactly does serve equally a overnice reminder that potent upside thrust leading to a short-term overbought province of affairs (over 90% of SPX stocks are higher upwards their 3- as well as 5-day moving averages) does non necessarily atomic number 82 to "mean reversion".

Thursday, August 27th

*  Per yesterday's post, nosotros did indeed encounter a seek out of lows inward Wednesday's session, followed yesteryear important buying.  The NYSE TICK has provided really practiced tells for the recent marketplace position action, equally wide downticking was followed yesteryear wide upticking really early on inward yesterday's rally.  That clit has continued into the overnight, all of which is consistent amongst the view of having position inward a momentum depression per Tuesday's comment.

*  Another practiced state inward yesterday's merchandise was the continued drying upwards of the number of stocks making fresh novel lows on weakness.  We had 726 monthly lows across all exchanges yesterday versus 840 on Tuesday as well as 3553 (!) on Monday.

*  The pure volatility mensurate continues at high levels, suggesting that book as well as volatility powerfulness endure amongst us for a while.  We remain higher upwards xxx inward VIX, off the highs exactly significantly elevated relative to close of 2015.

*  I notice that the psychological issues faced yesteryear traders inward this recent marketplace position are related to difficulty adapting to the recent changes of trend, correlation, as well as volatility.  Per the recent Forbes article, a big purpose of emotional upheaval inward trading comes from the mismatch betwixt the patterns we've operate out accustomed to seeing inward markets as well as the novel patterns that are playing themselves out inward electrical flow marketplace position action.

*  I regime annotation that 89% of SPX stocks are right away trading higher upwards their three-day moving averages, exactly alone a piffling over 2% are trading higher upwards their 10-day averages.  I await that latter number to growth significantly, equally our correction from the recent weakness plays itself out inward fourth dimension equally good equally price.  My game innovation is to endure opened upwards to buying weakness equally long equally nosotros remain higher upwards the overnight lows.

Wednesday, August 26th

*  The pause of the 1920 degree inward ES referenced yesterday showed us that the mainland People's Republic of China cutting was non a game changer, as well as nosotros continued the volatile downward market.  Interestingly, fewer stocks made fresh novel lows yesterday relative to the twenty-four hours previous.  Specifically, nosotros had 3553 monthly lows across all exchanges 2 days agone as well as alone 840 yesterday.  This would endure consistent amongst having position inward a momentum low, which on major declines tin arrive at the axe precede ultimate cost lows yesteryear weeks or fifty-fifty months.  

*  Yesterday nosotros had fewer than 5% of all SPX stocks trading higher upwards their 3, 5, 10, 20, as well as 50-day moving averages.  Going dorsum to 2006, at that spot bring alone been iv occasions inward which we've seen similar wide weakness:  10/7 as well as 10/9 of 2008; 11/20 of 2008; as well as 8/8 of 2011.  Over the adjacent iii trading days, SPY moved -9.74%; 9.68%; 13.95%; as well as 4.75%, respectively.  Note the really high volatility going forward.

*  Note also that the dates higher upwards did non brand ultimate cost lows for a number of months, exactly ultimately led to major bull marketplace position moves.

*  I am warning for the possibility of our putting inward lows close term as well as am watching that 1830-1850 degree inward ES closely.  I would await the combination of brusk roofing as well as value buying inward the high volatility surround to create a major snapback rally from these really oversold conditions.

Tuesday, August 25th

*  The volatility warning proved useful for Monday's trade, equally nosotros blew out to a VIX of forty yesteryear the unopen as well as traded amongst a daily truthful arrive at inward excess of 8%.  We traded good off the day's lows, inviting the hypothesis that we've seen a momentum depression for this downwards move.

*  Contributing to the view of a momentum depression is the unusually broad, weak breadth.  Over 400 SPX stocks made fresh 20 twenty-four hours lows yesterday.  We haven't seen that form of wide weakness since early on August, 2011.  That indeed was a momentum low, exactly regime annotation that stocks drifted lower, albeit amongst fewer stocks registering novel lows, for a yoke of months after that.

*  I volition endure watching commodities closely, equally these bring been a useful warning for EM equity weakness as well as weakness inward States of America stocks.

*  I volition also endure watching the ES 1920 area, equally that was the close recent depression prior to the mainland People's Republic of China statement of a reserve ratio cut.  If that displace yesteryear mainland People's Republic of China was a game-changer, that degree inward ES should hold.  Game innovation is to purchase weakness that holds higher upwards that 1920 level.

Monday, August 24th

*  There's a really primal betoken toward the destination of the recent Forbes article:  many times what nosotros translate equally a trading occupation genuinely represents *information*.  For example, the trader who has difficulty pulling the trigger may really good intuit that the marketplace position surround has changed as well as that what had been practiced risk/reward may non endure thus at the moment.  Similarly, frustration could endure a really practiced early, emotional signal that regimes bring changed.  We pass a lot of fourth dimension trying to preclude as well as fighting emotions inward trading when mayhap nosotros should endure focused on learning from them.

*  With honour to the recent article, also regime annotation the v things I facial expression for to position changing regimes.  Very helpful inward adapting to marketplace position conditions.  These volition endure relevant 1 time we're cook for the conduct to turn.

*  We hold to encounter cost behaviour that is wildly unlike from what nosotros seen through close of 2015.  For example, from midnight to viii AM EST thus far today, we've printed 150 bars based upon 500 ticks of cost movement.  By contrast, on the Mon 2 weeks ago, from midnight to viii AM nosotros printed half-dozen such bars.  My pure volatility mensurate continues to brand novel highs, important that we're getting to a greater extent than crusade from to a greater extent than volume, exactly also to a greater extent than crusade per unit of measurement of volume.  This makes gamble management tricky, equally nosotros tend to rely on the same fourth dimension frames for asset periods without realizing that asset a merchandise for a sixty minutes right away is similar asset for a twenty-four hours before inward the year.

*  We closed Fri amongst fewer than 5% of SPX stocks trading higher upwards their 3, 5, as well as 10-day moving averages.  That form of wide short-term weakness has been to a greater extent than typical of 2010 as well as 2011 markets than recent ones.  Very often, when we've had such wide weakness, the showtime thrust downwards has been followed yesteryear farther weakness, which is what we've seen overnight.  I hold to favor selling bounces until there's approximately evidence that selling pressure level cannot hold to yield weakness across the vast bulk of sectors.
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Info!! The Ability Of Repetition: Coaching Traders Linkfest

The previous post service emphasized the importance of daily trading goals. The challenge for traders, however, is non precisely to laid goals, but to turn the achievement of goals into consistent habit patterns. When coaching--including self-coaching--doesn't work, it's ofttimes because traders initially reached their goals, but together with thence relapsed into quondam patterns.

Such relapse occurs fifty-fifty when traders are ready to brand changes. If change efforts are non made inwards powerful ways, together with particularly if they are non rehearsed to the signal where they acquire automatic, the gravity of our quondam patterns becomes also groovy together with nosotros easily provide to what we've overlearned. This is why repetition is fundamental to making coaching efforts work. Through repetition, nosotros internalize changes: they laid out to experience normal together with natural to us. When nosotros rehearse novel patterns of sentiment together with demeanour together with link those to distinctive states of consciousness, nosotros tin summon those patterns whenever nosotros re-enter that state.

If you lot tin instruct yourself to come inwards a solid soil of focused remain each twenty-four hr stream and--in that state--mentally rehearse adept trading practices, you lot volition do a province of affairs inwards which precisely taking a few deep breaths during trading tin tip the scales together with help you lot gain access to your best practices. As I stressed in an before post, the sentiment is non to acquire your ain shrink, but rather to expand your mind's scope.

A fundamental sentiment from the trader functioning mass is that practise multiplies experience. That is the fundamental to learning how to trade, together with it is the fundamental to self-change. A fundamental sentiment from the trading psychology mass is that the solutions to our trading problems are already occurring, if nosotros tin precisely position them together with acquire to a greater extent than consistent inwards recruiting them. It is the consistency of modify efforts that contributes to their permanence. The links inwards this post--and the links inside those posts--should acquire you lot started on your self-coaching journey. My adjacent post service volition outline what you lot tin do if you lot consider roadblocks on that journey.
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Info!! The Well-Being Hypothesis: A Framework For Addressing Frustration Together With Lapses Inwards Trading Discipline

The get-go ship service inward this series highlighted the link betwixt frustration as well as loss of dependent plain inward trading. Stated inward a dissimilar way, lapses of dependent plain tend to endure state-dependent: nosotros teach inward a frustrated, angry, confused, or discouraged state as well as that colors how nosotros procedure as well as human activity upon information. Influenza A virus subtype H5N1 major agency inward which these states disrupt decision-making is past times interfering amongst the cues that render an experienced trader amongst his or her "feel" for the market. One of my best posts details how this happens.

There are many psychological techniques for quelling frustration, from cognitive techniques to alter our thinking to behavioral, ease methods. Ideally, however, a trader's destination should endure to preclude frustration inward the get-go place.

This brings us to what I volition telephone phone "the well-being hypothesis". (See this ship service for a detailed presentation of emotional well-being as well as its components). The hypothesis is that frustration tends to occur against a backdrop of diminished well-being. That is, if nosotros are by as well as large happy as well as satisfied inward life, normal events that interfere amongst our goals volition non endure experienced equally overwhelming frustrations. It is alone when such well-being is relatively absent that the frustrations of normal life locomote past times emotional focal points.

Relationships are a practiced example. Influenza A virus subtype H5N1 happy union tin weather condition the frustration of an occasional disagreement or conflict. I tin mean value of enough of disagreements inward my ain marriage, but I can't hollo back a fourth dimension of yelling, arguing, or fighting. The disagreements occur against a backdrop of full general goodwill as well as connectedness. If nosotros lacked the well-being that comes from mutual values, shared experiences, as well as an emotional bond, it would endure tardily for those frustrations to accumulate as well as fester.

Similarly, when I'm having a practiced twenty-four hours as well as everything seems to endure going my way, getting caught inward traffic is but a minor fry annoyance. I plow on the music inward the machine as well as brand the most of my wait. If it's been a twenty-four hours without gratification, however, the traffic jam simply mightiness endure the straw that breaks my emotional back, causing me to fuss as well as fume throughout the wait.

Happy, satisfied people, on average, don't experience frustration to such a bird that it volition dominate idea as well as behavior. Indeed, for a reasonably fulfilled person, stresses tin truly contribute to well-being over time.

If the well-being hypothesis is correct, so an of import agency to preclude frustration--and thence its disruptions of trading--is to maximize positive emotional experience. Said inward or so other way, the occupation amongst dependent plain may endure equally much almost a lack of positive experience inward trading equally the presence of overwhelming negatives. Instead of working to eliminate frustrations--probably an impossible task--we demand to notice ways to sustain well-being during the most challenging marketplace periods.

The side past times side ship service inward this serial volition address this challenge.
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Info!! Staying Cool Inward The Oestrus Of The Battle: A Primal Science For Active Traders

So oft inwards my meetings amongst active (intraday) traders, I hear the phrase "in the rut of the battle." Usually what follows that phrase is a description of approximately trading mistake: trading besides aggressively, ignoring conduct chances guidelines, deviating from planned ideas, etc.

The work is non that traders brand these mistakes; nosotros all produce at times. Rather, the work is that the mistakes instruct compounded "in the rut of the battle". Once traders are caught upwards inwards that heat, they lose the mightiness to recognize what is going wrong. They also lose their perspectives on markets.

Heating systems inwards homes stimulate got thermostats that command temperature. When the room becomes besides cool, rut kicks on. When the room becomes warm, the rut turns off. Many active traders lack an emotional thermostat. They don't know their temperatures. They are similar heating systems that instruct the room hotter too hotter, until the menage is unbearable.

One of the gist ideas from The Psychology of Trading--and perchance 1 of the close of import ideas I've always set forward--is that many of the problems that touching on traders are state-specific. How traders mean value too conduct is relative to the states of hear too torso that they are experiencing at the time. The argue that coaching (and self-coaching) oft doesn't operate is that nosotros are inwards 1 country of hear too torso when nosotros are analyzing too working on our problems too inwards a completely dissimilar country when nosotros are experiencing the triggers that gear upwards off those problems.

This explains the mutual sense that traders stimulate got when they await dorsum on their day's functioning too wonder, inwards amazement, how they could stimulate got made such rookie mistakes. In a normal frame of mind, they wouldn't stimulate got acted hence rashly. In "the rut of the battle", they instruct a dissimilar person; they procedure data differently.

Few challenges are to a greater extent than of import to active traders than the mightiness to prepare an emotional thermostat. But talking amongst a coach, writing inwards a journal, or vowing to oneself that side past times side fourth dimension volition hold out dissimilar won't touching the problem. As my before mass stressed, you tin alone solve the work past times entering the country that is specific to that problem too then reprogramming your patterns of persuasion too behavior.

My upcoming book volition stimulate got much to order on this topic, amongst specific exercises. In my side past times side post inwards this series, I'll outline a specific strategy that has helped me too many of the traders I've worked with.
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