Many students want to
know, what is the best possible step I can take to expand my
understanding of the best trading practices. By far, my
recommendation is my Peak Performance Home Study Course. At $795 my
students tell us over and over what a bargain it is when compared to
the many thousands of dollars the knowledge gained from the course saved
them in trading mistakes.
But for many there is a
lack of understanding of exactly what the Peak Performance Home
Study is about. So today I want to share with you this excerpt from
the course. I think it will help shed some light on how you can
benefit from this course.
I believe that each
person produces the results he or she gets in life. This occurs in
all aspects of life, but it is especially evident in trading. The
results you get in the market are exactly what you program yourself
to get. Most traders battle the market for many years before they
begin to come to this conclusion. More conservative investors seldom
reach this conclusion. In a sense, you are lucky because what
happens to you in the market is a terrific mirror to what is going
on inside your head. People in other walks of life also have such
mirrors, but they are not always so obvious.
My goal in developing
the Peak Performance course is to teach you how to make money in the
markets the easiest and most painless way possible—by developing a
sound game plan and the discipline and self-control to carry it out.
In the process of doing so you will learn how the best traders and
the most seasoned investors think. You will not be able to duplicate
their success unless you can duplicate their thinking.
I am most interested in
the qualities of successful people that produce lasting results.
Those qualities, it turns out, are also the qualities that generally
produce successful lives. As a result, if you develop the kind of
self-control and self-understanding necessary for market success,
you probably will also have a more successful and happier life. I
think that’s a wonderful by-product of this material.
IS THE COURSE MATERIAL
RIGHT FOR YOU?
You might ask the same
question about physical exercise. If you do it, you’ll have more
energy. You’ll feel better, and you’ll perform better. You can
probably get along without it, but not without a significant
sacrifice in the quality of your life. Exercise is physical
conditioning. This course is a form of mental conditioning. You can
make money without it, but doing so will require more effort, and
you will probably sacrifice much of your personal life.
When you first read
through the course, you might think that the material only applies
to speculative trading. I sometimes get calls from people who
purchase the course saying that they only invest in mutual funds so
the course material does not apply to them. Others claim that the
course material doesn’t apply to them no matter what kind of
trading they do. When I first created the course, about 90% of those
who purchased the course were commodity and option traders, so you
will see specific language in the course geared toward them.
However, the exercises, the self-insight and the game plan
development are appropriate for all investors and traders. The
material is equally applicable to day traders in futures and to
conservative long-term mutual fund investors.
For example, people
think that successful speculators and conservative investors have
differences in terms of the risk they are willing to take. That
difference may apply when losing speculators are contrasted with
conservative investors. But the top traders abhor risk and take very
little. That’s one reason why they last and make consistent
Others may think that
speculators differ in terms of decision-making needs. Again, this is
a misconception. The development of a game plan and the discipline
needed to carry that plan out are equally applicable to the floor
trader and to the investor who doesn’t want to touch his
investment for 10 years. In fact, sometimes the latter individual
will use his long term orientation as an excuse for not needing a
game plan. Yet if he puts his money into an investment that does not
perform well and keeps it there under the guise of having a long
term orientation, then he is making just as big a mistake as the day
trader who decides to hang on to a loss overnight. Unfortunately,
the long term trader takes ten years to make a mistake and may not
even realize that it is his mistake at the end of ten years. If a
mistake lasts ten years, you may only get a few chances to repeat
it. Since people tend to repeat mistakes several times, he may run
out of time before he can correct it. The day trader who hangs on to
a loss may get forced out of the market and lose all his money, but
sooner, rather than later, he realizes that he has made a mistake.
Since he still has time on his side, he can rebuild his capital and
correct those mistakes.
Every other important
aspect of this course—stress management, internal conflict
mastery, developing useful beliefs, goal setting, decision making
biases, etc.—applies to all facets of investing and trading. If
you understand and apply these concepts, then you can make a lot of
money consistently. If you neglect these areas, then you probably
will join the crowd and lose money. Thus, whatever kind of trading
or investing you do, this course is applicable to you. It is a form
of mental conditioning. You can probably do without it, but
consistent application of the principles can dramatically improve
your life and your finances.
If you call yourself an
investor, rather than a trader, then I would suggest that you
switch. A trader is someone who is concerned about market direction,
market timing, and obtaining the best possible position. He might be
buying a stock market index or IBM, while shorting the Swiss Franc,
and buying a gold position. In contrast, the investor is always on
the long side of the market. He concentrates on the investment that
has the best possible chance of outperforming the market, and he
tends to hold on to positions. When he makes a major change in
position, it usually amounts to how fully invested he should be
under current market conditions. In my opinion the trader,
therefore, has more choices (profit opportunities) than the
investor. Since successful people tend to be successful because they
give themselves more choices, I strongly suggest that investors give
themselves more choices by playing both sides of the market—in
other words, become traders.
Throughout the remainder
of this course, I will primarily use the word "trader."
However, I am generally referring to both traders and investors when
I use it. In addition, since males constitute about 90% of the
readership of this course, I will generally refer to traders with
masculine terms such as he, him, and his. This in no way reflects on
the ability of women to be successful traders.
HOW YOUR COURSE IS
SAM, the Trading Tiger,
will assist you on your journey through this volume and through
future editions of sub-sequent volumes of this course. SAM is now
one of the world’s top traders, but he also lost all of his
trading capital when he first began trading. As a result, he
under-stands your problems, and he can also show you how to become
The complete course
consists of five volumes and four CDs. In addition, you may purchase
a personal profile of your psychological skills and weaknesses as an
investor/trader, which we call the Investment Psychology Inventory
The Five Volumes. Volume
One provides you with a basic understanding of the course material,
how to use the course, and how to use risk. You will also explore
the psychology of money management (Position Sizing™) and risk
control. Lack of understanding in these two areas is the downfall of
so many traders.
The second volume is a
complete stress management course. Most people worry about stress
because of its potential threat to one’s health. In Volume 2, you
will learn that stress has an immense effect on human performance,
especially trading performance. You will be able to evaluate the
areas in which your stress is high and in which your stress
protection is low. Volume 2 provides you with specific instructions
for managing stress. Stress management is important for successful
trading, but I also recommend that you find the cause of your stress
and eliminate it. In most cases, stress results from internal
conflict. You will learn specific techniques for dealing with
internal conflict in Volume 3.
The third volume deals
with the beliefs and attitudes necessary for successful trading. In
addition, you will learn about unconscious internal parts or
personalities that you or any other normal human being may have.
Having all of your parts working together is important to successful
trading and eliminating the possibility of self-sabotage.
You will learn how to
develop discipline and self control in the fourth volume. Having the
right mental state is essential for success in any area of endeavor.
In Volume 4 you will learn many techniques for developing the right
state of mind for the task at hand. In addition, I provide specific
suggestions for dealing with compulsiveness—the most deadly mental
state for traders. Volume 4 will help you evaluate whether
compulsiveness is a problem for you and will teach you what to do
Finally, in the last
volume you will learn how mental strategies and decision biases
influence your trading. This volume will provide specific techniques
for evaluating how you make decisions and how you can improve that
process. Volume 5 also provides you with the guidelines for
developing a complete game plan for trading, using all of the
principles you will have learned in the course.
The Four CDs. The four
CDs to the course contain exercises designed to supplement the
material in the books. Each CD has a specific purpose. The first CD
teaches you how you think and gives you the opportunity to evaluate
your capabilities in each type of thinking. In addition, CD 1
provides an introduction to the concept of internal parts or
personalities. Listen to CD 1 regularly, follow the suggestions
provided, and you will begin to understand your parts better and the
messages they give you.
The second CD is a
relaxation CD. If stress is a problem for you, then play CD 2 a few
times and discover how easy relaxation can be. Listen to it every
day for two weeks, and you will discover that you can relax at will.
The third CD is designed
to keep you from repeating mistakes. A mistake occurs when you do
not follow your rules. It has nothing to do with making or losing
money. CD 3 is designed to be played when you discover that you’ve
made a mistake, and you want to avoid repeating it. Once you have a
set of tested rules, use CD 3 as part of a daily debriefing whenever
you do not follow them.
Finally, the fourth CD
is designed to give you confidence in yourself. Play it regularly,
and you will be able to access confidence whenever you need it.
However, only certain traders need confidence. If you tend to be
compulsive, then you should avoid CD 4. As a result, I recommend
that you avoid using CD 4 until you have completely finished the
HOW TO USE THE COURSE
You are about to begin a
journey of self-evaluation and self-discovery. Although you may have
some initial shocks about where you are now, proceed with enthusiasm
and commitment, and you will find the journey very rewarding. Your
objectives in going through the course are to develop insight about
how you produce your trading results, to devise a complete game plan
for making money, and then to use the course and your game plan to
continue to improve.
People frequently ask me
how long it takes to go through the course. If you are overweight,
how long does it take to get yourself in shape through diet and
exercise? Only a few months if you begin a daily conditioning
program and stick to it! This course is a daily conditioning program
for your mind. You can probably make a dramatic improvement in your
trading in a few months of work, but you must continue to apply the
principles. Would you expect your body to stay in shape if you
stopped exercising? No. Similarly, you cannot expect your mind to
perform well in trading if you stop the regular program we recommend
in this course. This course provides you with a form of coaching to
help you achieve peak performance. It is a lifelong process of
The first step in the
journey, unless you are a novice to the markets, is to take the
Investment Psychology Inventory. It will provide you with your first
insights. Your scores, once you enter them into the spaces provided
earlier in this chapter, will also guide you to the most essential
elements of this course for you.
You can start the course
once you have sent the test to us for scoring. Begin by going
through Volume 1 in detail. Whenever you encounter an exercise, do
it immediately. If you proceed in the manner suggested, most of you
should have your profile back by the time you complete this volume.
If you have not made
money consistently in the market, then I recommend that you
immediately suspend trading (or at least avoid opening new positions
in the market) until you have completed the course and developed a
written game plan for trading. YOU WILL PROBABLY SAVE YOURSELF
THOUSANDS OF DOLLARS BY FOLLOWING THIS ADVICE. On the other hand, if
you consistently make money and you just plan to use the course for
improvement, then continue trading.
Once you have your
profile, you can proceed with the course in two ways. The best
method is simply to go through each volume in order and complete
each exercise when you get to it. When you have completed the five
books, then devise a complete game plan for your trading. Once you
have that game plan, ask yourself if you could convince me (or
someone else who might have an astute eye for lowrisk plans) to
invest in you. If you think the answer is "yes," then
resume trading. Otherwise, continue to work on it.
The next best way to
complete the course is to concentrate on your weak areas based on my
recommendations from your profile. Do all of the exercises in those
areas and then read the remainder of the course. Once you finish the
reading and exercises, develop your complete game plan that would
satisfy the above criteria. When you have it, then resume trading.
You are not finished
with the course when you complete your game plan. In fact, the
course will have the most value for you once you have your game
plan. At that point, you can begin to apply the principles in the
course most effectively. Start using a trading diary, and use the
results of your trading as a means to improve yourself. As you
trade, you will discover new insights about yourself. You can use
the course material to avoid repeating mistakes and to develop more
selfcontrol. Traders who get the most out of the course continue to
review the books regularly.
Your game plan must
involve feedback so that you can evaluate mistakes and continue to
work on becoming a more effective trader. As a result, the course is
something you should be using for the rest of your life. I recommend
that you redo the course exercises at least once a year.
The course will be of
little value to you if you just skim the books or just put it on the
shelf as reference material in case you need it some day. Even if
you read the books thoroughly, but avoid doing the exercises, you
will be cheating yourself. TAKE THE TIME TO DO EVERY EXERCISE. In
fact, once you’ve gone through the course the first time, notice
the parts of it that you tended to neglect or put off. Those
portions of the course are probably the ones that you need to work
on the most.
SPECIAL INSTRUCTIONS FOR
If you are a novice to
the investment world and have chosen to go through the course prior
to entering the market, then you are exceptional. You will probably
do very well in the trading business. Most people choose to make
mistakes, and lose money before they realize that they are the cause
of those mistakes.
My first recommendation
for the novice trader is that you do not trade until you go through
the course step-by-step and develop a complete game plan. DO NOT
ENTER THE MARKET UNTIL YOU HAVE DONE SO. Some exercises, such as the
compulsive trader exercises, will not apply to you at first. Just
skip those and concentrate on getting as many insights about
yourself as you can, so that you can develop an effective game plan.
That game plan will help you shortcut many mistakes, minimize
losses, and earn consistent profits.
Your initial game plan
will probably have some weak areas because there is no substitute
for real market experience. Nevertheless, you probably can
circumvent many problem areas, and your initial game plan will
provide a solid foundation for personal growth.
Once you have a game
plan, make about 20 to 40 (even fewer if you only plan to make a few
trades each year) low-risk trades. These should involve a very small
percentage of your overall capital (e.g., 0.5% per trade). If you
invest in stocks, then consider buying 10 shares. You may lose money
even after you’ve completed a game plan. That is part of your
education as a trader. Why lose large amounts of money when you are
just beginning? Even if you have a large trading account, only risk
small amounts while you are learning. Learn by making mistakes that
do not cost you much money. Under-trade until you have a proven game
After you have completed
your 20 to 40 low risk trades, then stop and re-evaluate. If you
have lost money, consider those trades to be part of your education.
If you have made money, then re-evaluating yourself is probably even
more important. A big ego is the worst thing you can bring to a
Consider taking the
Investment Psychology Inventory as the first part of your
re-evaluation. Also, go through the course again. At this point, you
will have the foundation and experience to build a solid game plan.
If you follow this method of growth and education, instead of the
"School of Hard Knocks," then you will probably save
thousands of dollars in your tuition.