The core theme is that success in the market is primarily determined by one's psychological state and emotional control, rather than technical analysis or indicators. A simple, practiced mental reset technique can significantly improve trading performance and overall well-being.
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Allow me to impart a truth about the
market that the majority of speculators
will never grasp, regardless of the
number of charts they pour over, or the
complexity of their mechanical indicators.
indicators.
I have amassed fortunes, and I have lost
them. I have stood at the pinnacle of
Wall Street with millions to my name,
and I have clawed my way back from a
zero balance more times than a prudent
man would ever confess.
Through it all, every bull run and every
panic, I learned a single verity that
distinguishes the professional operator
from the common gambler.
The market has no regard for your
indicators, your charts, or your
painstaking analysis.
The market responds to only one force,
and that force is the man in front of
the screen. Your own mind, your
emotional condition, your capacity for
clear thought when all those around you
are succumbing to hysteria.
that is the sole determinant of whether
you close your books with a profit or a loss.
loss.
I am not speaking of some esoteric
philosophy or the sort of positive
thinking nonsense pedled in cheap pamphlets.
pamphlets.
I am referring to something far more
tangible, immensely more powerful.
I'm speaking of a method I perfected
through years of costly education. a
mental clearing that requires three
minutes and has preserved more of my
capital than any chart pattern or moving
average ever could.
You see, the trouble with most men who
play the market is not that they lack
knowledge. On the contrary, their
problem is an excess of it.
Their screens are cluttered with dozens
of indicators, each one whispering a
different story.
The MACD suggests a buy. The RSI signals
a sell. The Ballinger bands are
fluctuating wildly and their minds are
spinning trying to reconcile the
contradictions. All the while the tape
is moving and they remain frozen, unable
to act, waiting for a perfect alignment
of signals that will never materialize.
I learned very early in my career that
the human mind is not built for speculation.
speculation.
Consider our evolution.
We were designed for survival in the
wild, to react instantly to physical
threats, to remember sources of danger
and steer clear of them. These instincts
were invaluable to our ancestors. But
they are poison in the market. The
market penalizes nearly every natural
human impulse. It pays you for doing
what feels fundamentally wrong and ruins
you for doing what feels instinctively right.
right.
When a stock is in a freef fall and the
crowd is rushing for the exits, every
fiber of your being screams to sell, to
escape before it goes to zero. Yet, that
is frequently the very moment one should
be buying.
When a stock is soaring to the heavens
and euphoria is rampant, your brain is
flooded with the desire to jump in, not
to miss the easy money.
But that is precisely when one should be
selling or standing aside.
The market is a psychological
battleground and more often than not
your own mind is your most formidable adversary.
adversary.
This is why I formulated what I referred
to as the 3inut composure.
It is not meditation though it has
elements in common. It is not positive
affirmations or visualization
though those have their own utility.
It is a systematic procedure for
sweeping away the noise, the emotion,
the bias, and returning to what I call
the operator's state.
The operator's state is one of calm,
alertness, of detached focus, ready to
act, but patient enough to wait for the
proper moment.
It is the mental equivalent of a clean
and orderly workspace. You would not
attempt to build a fine watch on a desk
littered with clutter. So why would you
attempt to make precision trades with a
cluttered mind? I discovered this
technique through bitter experience.
Back in 1907, I was flushed with
success. I had made a fortune selling
the market short during the panic, and I
felt I could not be wrong. My vanity had
outgrown my judgment, which is saying a
great deal. I entered the market each
morning convinced of my own genius.
Every profitable trade was a
confirmation of my brilliance. Every
loss was mere bad luck or the
manipulation of unseen forces. I was no
longer operating.
I was gambling,
certain that the rules did not apply to
me. Then came a series of trades that
delivered a lesson in humility like none before.
before.
I found myself on the wrong side of a
corner in the cotton market. I held my
positions far too long, convinced of my
own correctness.
Even as the tape screamed that I was
wrong, I averaged down on losing trades,
certain the market would eventually come
to its senses and agree with me.
Within weeks, a substantial portion of
my gains had vanished. Not because my
methods were flawed, but because my mind
was clouded, my ego was at the helm and
my vision was obscured.
That is when I grasped a profound truth.
The market does not care who you are or
how intelligent you believe yourself to
be. The market is unconcerned with your
past victories or your reputation on the
street. The market is utterly
indifferent to you. It will do what it
is going to do.
Your sole duty is to read the tape
accurately and respond with discipline.
But that is impossible if your mind is
filled with ego, fear, regret, or greed.
Jesse Livermore or Larry Livingston, as
he was known in print, consistently
stressed that Wall Street extracts a
heavy cost of instruction for every
lesson learned the hard way.
Fortunately, the core principles he
developed to survive these expensive
market penalties were captured for
posterity by Edwin Lefervra in the 1923 masterpiece
masterpiece
reminiscences of a stock operator.
It stands as the finest possible
literary training ground allowing you to
absorb decades of painful operational
experience without ever having to risk a
dollar of your own capital. To ensure
this timeless wisdom translates
accurately to the modern computerized
arena, we advise seeking out the
MaxDavidson annotated edition.
Davidson's careful commentary is
indispensable for bridging the gap
between Livermore's era and ours. A link
to this essential edition is provided in
the description below. So, I began to
experiment. I would step away from the
trading floor, find a quiet corner, and
attempt to clear my head.
Initially, it was a struggle. My mind
would race with thoughts of my
positions, of money lost, of
opportunities missed.
But over time, I developed a process, a
systematic method of resetting my mental
state that I could perform anywhere at
any time in just 3 minutes.
The first step is what I call the inventory.
inventory.
You sit down, close your eyes if
possible, and you take stock of every
emotion you are feeling without judgment.
judgment.
Are you anxious about a position?
Acknowledge it. Are you euphoric after a
big win? Acknowledge it. Are you
frustrated that you missed a move?
Acknowledge it. The key is not to
suppress these feelings or pretend they
do not exist. that only grants them more
power. Instead, you simply observe them
as you would watch clouds drift across
the sky. There is the anxiety, there is
the greed, there is the fear, you name
them, you recognize them, and then you
simply allow them to be. Most men try to
battle their emotions.
They command themselves to be calm, to
not be afraid, to be confident.
But that is like trying to dam a river
with your bare hands. It is feudile.
The pressure simply builds until it
bursts forth in a moment of disastrous decision-making.
decision-making.
Instead, you take inventory.
You say, "Yes, I am feeling this and it
is a natural human reaction, but it will
not dictate my actions."
The second step is the detachment.
This is where you consciously create
distance between your sense of self and
your market positions. You remind
yourself that you are not your trades. A
losing trade does not make you a
failure. A winning trade does not make
you a genius. They are merely trades,
points of data. The market moved in a
certain direction and you made a
decision based on the available information.
information.
That is all. Nothing more, nothing less.
This detachment is vital because most
speculators become emotionally wedded to
their positions. They fall in love with
a stock or develop a personal vendetta
against the market itself.
I have seen men hold losing positions
for months watching their capital bleed
away simply because selling would be an
admission of error. Their pride would
not permit them to take the loss.
I have done it myself more times than I
care to recall.
During this detachment phase, I
literally imagine myself stepping back
from the quotation board. In my mind's
eye, I see myself walking away from my
positions, from my account statement,
from my profit and loss. I imagine
viewing it all from a distance as if
observing another man's account. This
mental device creates emotional space.
It allows for objective assessment. When
you are too close to a situation, your
perspective is skewed. You require
distance and the detachment phase
provides it. The third and final step is
what I call the reaffirmation.
This is where you reconnect with your
fundamental principles of operation,
your rules, your strategy, not just on
an intellectual level, but on an
emotional one. You remind yourself why
you have these rules. You recall the
costly lessons that forged these
principles. You visualize yourself
operating according to your plan,
following your system, maintaining
discipline. For me, the reaffirmation
involves returning to my core market
beliefs. The trend is your companion
until the end of the trend. Cut your
losses short and let your profits run.
The tape will tell you when you are
wrong, if only you are willing to
listen. These are not mere apherisms.
They are truths I learned through hard
experience. Truths that cost me fortunes
to acquire. In the reaffirmation phase,
I reconnect with these truths on a deep
visceral level. The entire process takes
3 minutes, perhaps four if you are
particularly agitated.
But its effect is profound. You shift
from being reactive and emotional to
being responsive and rational. Your mind
clears, the noise subsides, and suddenly
you can see the market for what it truly
is, not what you hope it to be or fear
it might become.
You can see the actual price action, the
actual trends, the actual signals, free
from the distortion of your own emotions.
emotions.
Now, here is the interesting part. Once
I began practicing this reset with
regularity, my trading was transformed.
Not in a single day, but gradually and undeniably.
undeniably.
I found myself making fewer impulsive trades.
trades.
I ceased chasing stocks that had already
made their big move. I became more
patient, waiting for the proper setup
instead of forcing trades out of boredom
or anxiety.
Most crucially, I started taking my
losses much more quickly and holding my
winners much longer. The market had not
changed. It was the same chaotic,
unpredictable force it had always been.
But my relationship to it had changed.
I stopped trying to conquer it or outwit
it. I began to work with it, to flow
with it, responding to what it was
actually doing rather than what my hopes
or fears dictated.
And that made all the difference. Let me
offer a concrete illustration. In 1909,
I was watching Union Pacific. The stock
had been in a powerful uptrend for
months and I had accumulated a
significant long position. But then the
character of the market began to shift.
The volume started to diminish on the advances.
advances.
The daily gains grew smaller. The stock
was still making new highs, but only
just barely.
All my operators instincts told me
something was a miss, but I was
reluctant to believe it. I had made
handsome profits on this position, and
my greed wanted more. One morning, I
felt that familiar tightness in my
chest, the anxiety that arises when you
know the right thing to do, but are
afraid to do it. Instead of ignoring it,
as I might have in the past, I stepped
away from my desk. I went into my
private office, closed the door, and
performed my 3-minute composure.
I took inventory of my greed. I
acknowledged my fear of missing out on
further profits. I recognized my
attachment to being proven correct about
this stock. Then I detached. I
visualized myself as an outside
consultant, looking at the position objectively.
objectively.
And finally, I reaffirmed my principles.
What do my rules dictate?
When the character of the market
changes, you must respect it. When
volume dries up on new highs, be wary.
When your intuition tells you something
is wrong, listen. I opened my eyes,
walked back to my desk and sold half my
position. Just like that. There was no
drama, no internal struggle. The clarity
was absolute.
2 days later, Union Pacific began to
decline. Within a week, it had
surrendered most of its recent gains.
Because I had performed that reset,
because I had cleared my mind and
reconnected with my principles, I had
saved myself from a substantial loss.
More importantly, I had preserved my
capital for the next genuine opportunity.
opportunity.
That is the function of this reset. It
does not predict the market. It offers
no magical insight into the future. What
it does is strip away all the
psychological baggage that prevents you
from seeing what is already there.
The market is in constant communication.
It is always sending signals through
price action, volume, and trend. But
most speculators cannot hear them
because the noise inside their own heads
is too loud.
Think of it this way.
Imagine trying to discern a quiet
conversation in a crowded, boisterous
room. You might catch a word here and
there, but you miss the essence.
Now imagine that same conversation in a
silent library. Suddenly, every word is
perfectly clear. That is what the reset
does. It quiets your mental room so you
can hear what the tape is actually saying.
saying.
The beauty of this technique is its simplicity.
simplicity.
You require no special equipment. You
need not go anywhere or do anything
elaborate. You can do it at your desk,
in your motor car, even in a washroom if
that is the only privacy available. 3
minutes. That is all it takes to reset
your mental state and restore clear
thinking. But here is the condition and
it is important. Like any skill of
value, this technique requires practice.
The first few times you try it, you may
not notice a dramatic difference. Your
mind may wander. The emotions may not
subside completely. That is to be
expected. Your brain has spent years
forming certain habits, certain ways of
responding to stress and uncertainty.
You will not overwrite that programming
in a single 3inut session.
But if you practice it regularly, if you
make it a daily ritual, something
remarkable occurs.
Your brain begins to learn the pattern.
Eventually, the mere act of sitting down
and closing your eyes can trigger the
reset. Your mind knows what is coming
and begins to calm itself automatically.
The inventory phase becomes quicker. The
detachment happens more easily. The
reaffirmation feels natural and effortless.
effortless.
I began performing this reset multiple
times a day before the market opened to
clear away any overnight anxieties or
preconceived notions
in the middle of the trading day,
especially after a volatile move or a
large trade to reset my emotional equilibrium.
equilibrium.
After the market closed, I would do it
one last time to process the day's
events and prepare for the next. It
became as natural as breathing and just
as essential.
And here is something most traders never consider.
consider.
The benefits extend far beyond making
better trading decisions.
This reset technique improves your
overall mental health and well-being.
Trading is a high stress profession. It
takes a toll on your nervous system,
your sleep, your personal relationships.
By regularly clearing away emotional
residue by creating a buffer between
yourself and the constant pressure of
the market, you become more resilient.
You sleep better. You are more present
with your family. You enjoy life more.
I have known men who made a great deal
of money but were utterly miserable.
They were in a perpetual state of
stress, worry, and emotional turmoil.
They may have had profitable accounts,
but they were paying for it with their
health and happiness.
That is not success.
It is merely a different form of
failure. The 3minut composure changed
that for me. It allowed me to trade with
intensity and focus when required, but
then to release it when the market
closed. I was no longer carrying my
positions home in my head. I was no
longer lying awake at night replaying
trades or worrying about the morning
bell. I could be a fully engaged
speculator during market hours and a
fully engaged human being the rest of
the time. That balance, that ability to
compartmentalize effectively is worth
more than any trading system or
indicator. Now, I want to address
something I know some of you are
thinking. You are wondering if this is
truly necessary.
You are thinking this may work for
others but I am different. I can handle
the pressure. I do not get emotional
about my trades.
Allow me to tell you with absolute
certainty you are deceiving yourself.
Every speculator is emotional.
Every single one.
The difference between the consistently
successful and the unsuccessful is not
that the successful feel no emotion. it
is that they have learned to manage
those emotions to work with them rather
than be controlled by them. I learned
this lesson in the most painful way imaginable.
imaginable.
There was a time in my life when I
thought I was beyond all this
psychological business. I had been
trading for years. I had made millions.
I considered myself a master of the
game. And then in 1917, I lost
everything. Not because the market's
nature changed, not because my methods
ceased to work, but because I stopped
managing my own mental state,
I grew complacent.
I neglected the very disciplines that
had brought me success. I allowed my ego
to run rampant and my ego led me
straight to bankruptcy.
Sitting in that hotel room with
practically nothing to my name, I had a
profound realization.
The market is a mirror. It reflects back
to you whatever you bring to it.
If you bring fear, it will provide you
with more reasons to be fearful. If you
bring greed, it will tempt you into
ruinous decisions. If you bring ego, it
will humble you.
But if you bring clarity, discipline,
and emotional equilibrium, it will
reward you. Not every time, not on every
trade, but consistently over the long
run. That was when I swore to never
again neglect my mental preparation.
The 3-minute composure became non-negotiable.
non-negotiable.
Come rain or shine, in victory or
defeat, I did it. And slowly, painstakingly,
painstakingly,
I rebuilt my fortune.
But more than that, I rebuilt my
relationship with the market. I
rediscovered the satisfaction of reading
the tape correctly, of executing a plan
flawlessly, of remaining patient when
patience was called for, and acting
decisively when the moment for action arrived.
arrived.
Here is what I need you to understand.
This reset is not a magic formula.
It will not make you instantly
profitable if you do not possess a sound
trading strategy. It will not compensate
for a fundamental lack of knowledge
about how markets operate.
What it will do is allow you to maximize
whatever skills you already possess.
If you are a decent trader with sound
strategies but inconsistent results,
this reset can make you consistent. If
you are a good trader who suffers
occasional catastrophic losses due to
emotional decisions, this reset can
prevent those disasters.
If you are a great trader who aspires to
become one of the elite, this reset can
provide that crucial edge. The greatest
operators in the world are not those
with the most complex systems or the
most advanced technology. They are the
ones with the most superior
psychological control.
They are the ones who can remain calm
amidst chaos, patient when opportunity
is scarce, and disciplined in the face
of temptation.
They are the ones who have mastered
themselves before attempting to master
the market. And that mastery begins with
something as simple as a 3inut mental reset.
reset.
I am going to tell you precisely how to
perform this step by step so you can
begin implementing it immediately.
But first, you must make a commitment.
Do not try this once and expect a
miracle. Do not do it for a week and
then abandon it because you do not see
immediate results. Commit to performing
this reset at least twice a day for 30
days. Once in the morning before you
trade and once in the evening after you
are done. That is it. 60 resets over 30 days.
days.
Give it that chance and I promise you
will notice a difference. Here is the
complete process.
Find a quiet place where you will not be
disturbed for 3 to four minutes. Sit in
a comfortable chair, feet flat on the
floor, hands resting in your lap.
Close your eyes or lower your gaze.
Take three slow, deep breaths. In
through your nose and out through your mouth.
mouth.
For these first three breaths, focus
only on your breathing.
This signals to your body that you are
shifting from a state of action to a
state of reflection.
Now begin the inventory phase. Mentally
scan your internal environment. What
emotions are present? Do not judge them
or try to alter them. Simply notice
them. Are you feeling anxious? Say to
yourself, "I notice anxiety." Are you
excited? I notice excitement. Are you
frustrated, angry, greedy, fearful,
confident, arrogant, whatever it may be?
Acknowledge its presence. Spend
approximately 60 seconds on this. You
are not trying to intensify these
feelings or make them disappear.
You are simply observing them like a
scientist observing data.
Next, move into the detachment phase.
Visualize yourself stepping back from
your trading station. In your mind's
eye, see yourself from a distance as if
you were watching yourself on a motion
picture screen.
See your positions, your charts, your
account balance, all of it. But see it
from this observer's perspective.
Say to yourself, "These are just trades.
They do not define who I am. I am
separate from my results. A winning
trade does not make me a winner and a
losing trade does not make me a loser.
I am simply an operator executing a strategy.
strategy.
Spend about 60 to 90 seconds here truly
feeling that separation, that emotional
distance. Finally, enter the
reaffirmation phase. Bring to mind your
core trading principles, whatever they
may be for you. For me, it is concepts
like respect the trend, cut losses
quickly, let winners run, the market is
always right, trade your plan, not your emotions.
emotions.
Contemplate these principles not merely
as words, but as lived truths. Recall a
time when adhering to them saved you or
made you money. Recall a time when
ignoring them cost you dearly. Feel the
wisdom embedded in these principles.
Commit to honoring them in your next
trading session. Spend the final 60 to
90 seconds here. Then take three more
deep breaths. Open your eyes and return
to your trading or to your day. The
entire process takes 3 minutes, maybe
four as you are learning it. But the
clarity it brings, the emotional balance
it restores is worth infinitely more
than the time it takes. I have given you
something today that took me decades to
develop and perfect.
A tool that has saved me more money than
I can calculate and prevented more
disasters than I can count. But a tool
is useless unless it is used. Knowledge
without application is merely a form of entertainment.
entertainment.
So here is my challenge to you.
Begin today, right now.
After this concludes, perform your first
3inut composure.
Do not wait for the perfect moment or
until you feel overwhelmed by emotion.
Simply do it. Make it a practice, not a
reaction to a crisis. And remember, the
market will always be there. It has been
here for centuries, and it will be here
long after we are gone. But your time,
your capital, and your mental fortitude,
these are finite resources. Protect
them, invest in them. Master your own
mind, and mastery of the market will
follow. I want you to leave a comment
below telling me what emotions you
inventoried during your first reset.
Share your experience with this
community. And if you found this
valuable, go watch the other videos on
our channel where I share more hard one
lessons from my years on the street.
These are not theories or academic
ideas. This is wisdom paid for by
triumph and disaster through millions
made and lost.
Every video contains insights that can
save you years of painful learning. The
greatest speculator is not the one who
makes the most money on a single trade.
It is the one who remains in the game
long enough to compound his edge day
after day, year after year. And you
cannot remain in the game if your own
mind is working against you. Master this
reset. Make it as automatic as
breathing. And watch what happens to
your trading, your results, and your
life. The market is waiting. But more
importantly, the best version of
yourself as a trader is waiting.
The version that operates with clarity,
discipline, and emotional balance. That
version is already within you. The
3minut composure is simply the key that
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