Lessons from Market Wizards: How to Use Your Beliefs to Reach Any Goal

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At BroStocks we are all about aspiring to improve and hope to inspire our readers to do the same. Whether that’s through investing, trading, developing a side hustle or new entrepreneurial venture, we write about the how-tos to help you develop into a better and more profitable version of yourself.

Sometimes in focusing so much on the “how,” we can lose sight of the “why.” The Information Age has exposed us to endless hacks and tactics for anything from setting up an overnight Shopify empire to developing a profitable day trading strategy. But as Simon Sinek says, it often makes sense to start with your “why” and examine your own beliefs more deeply before deploying the tactics. Doing so could save you a lot of frustration down the road.

In this article we take a look at some deeper psychological strategies you can use when attempting to achieve success in any aspect of your life, from becoming a more profitable investor, starting a successful business, getting a career promotion or simply developing more harmonious personal relationships with your friends or partner.

These lessons come from the incredibly insightful interview with psychologist Van K. Tharp from the seminal book Market Wizards by Jack D. Schwager. Tharp drew on his deep experience working with some of America’s most profitable traders of all time and developed a psychological theory around modeling success. He believed strongly that success could be duplicated by modeling the behaviors of successful traders in three key areas:

  1. Beliefs
  2. Mental States
  3. Mental Strategies
The most successful traders shared a set of common beliefs, according to Dr. Van K. Tharp.

In this post we are going to take a closer look at beliefs, how to ensure your beliefs support your stated goals and objectives and what to do when you identify a conflicting set of beliefs that may be holding you back.

Do Your Inner Beliefs Support Your Goals?

Many people say they want to earn more money or even become wealthy, but when they take time to examine their beliefs about money in detail, they often discover conflicting beliefs about what more abundant cash flow would do to their lives and the people they surround themselves with.

While this person may have a stated belief that they want to earn more money and even have a “vision board,” regularly listen to Gary Vaynerchuk podcasts and treat “Think & Grow Rich” as their pocket bible, they may also be harboring deeper beliefs about money such as:

  • My friends might be jealous of me if I make $100,000 per year.
  • Most rich people I know are jerks and I don’t want to be like them.
  • My siblings will always ask me for loans if they know I make a lot of money.
  • I’m worried I’ll make bad investments and get taken advantage of by financial advisors
  • It will be harder to know if my dates are interested in me for my money or actually attracted to me as a person.

Someone with any of the above beliefs (even if only subconscious) who also has a goal of earning more money will be conflicted and unlikely to reach his or her stated goal in a smooth manner. In fact, inner conflict was one of the key aspects that held average traders back from the more successful ones, according to Tharp, who noted conflicts such as this are evident in about half of the clients he counseled.

Tharp described the overall importance of beliefs in Market Wizards, when describing how the U.S. Army was able to develop a training program that improved the qualification rate of sharpshooters from 80% to 100%, while also reducing the training time from four days to two days.

How did they improve their results so drastically? By teaching the new recruits to model their beliefs based on the two most successful sharpshooters that had ever taken the program.

What were the beliefs of these two superior sharpshooters?

  • Shooting well is important for my survival.
  • Hunting is fun.
  • Mental rehearsal is important to successful importance.
  • If I miss a shot, it has something to do with my performance.

Tharp contrasted these beliefs of the best sharpshooters with what a new recruit to the program might typically believe:

  • Guns are evil; they kill people.
  • If I shoot this weapon too many times, I might go deaf.
  • If I miss the target, the gun must be misaligned.

Based on these differing beliefs, one can begin to understand why the best sharpshooters were so much better than the raw recruits. It had everything to do with their inner beliefs and how well aligned they were towards achieving their objectives.

Tharp then went on to reveal the beliefs of the superior market traders he has worked with and laid out their common beliefs:

  • Money is NOT important.
  • It is OK to lose in the markets.
  • Trading is a game.
  • Mental rehearsal is important to success.
  • I’ve won the game before I start.

It’s important to note that Tharp said these beliefs were common among traders of many different types, from those who relied on algorithmic computerized trades to those who traded based on gut feeling. The only criteria among the traders was that they were among the most profitable to ever enter the markets. Their styles, methods and chosen markets were often very different from one another.

How to Resolve Conflicting Beliefs

Now it’s your turn. Think about your top goal or priority in life. Now be honest with yourself: what are your true beliefs when it comes to this goal? List all of your beliefs about this goal on a piece of paper or document on your computer.

If you’re having trouble identifying all of your beliefs, here are some supporting questions to ask yourself about it:

  • Does working to achieve my goal feel fun, or does it feel like drudgery? If the latter, why does it feel that way?
  • When I have a setback in making progress towards my goal do I blame my own performance or external factors (e.g. My boss, spouse, customers, etc.)?
  • What strategies have I outlined to achieve my goal? Why did I pick these strategies and how do I know they will work?
  • What type of person am I when I work towards this goal?

Your goal might be to gain a promotion at your corporate job, which will bring in more income and higher status among your friends and colleagues. However, gaining the promotion might also mean longer hours at work because you’ll have to interface with teams in different time zones and more time spent in early morning conference calls. As a result of this resistance to giving up more free time, you’ve been less than proactive in volunteering for the types of assignments that will get you noticed for rapid promotion from your manager.

Congratulations! You’ve identified a conflict that’s holding you back from your stated goal.

Dr. Tharp describes such a conflict with a trader he counseled:

I worked with a floor trader whose father was fairly successful. His father was not a good model for him, however, in that he was an alcoholic. As a result, he developed a part to protect himself from being like his father. He could make about $75,000 per year trading, but if he made any more than that, this part kicked in to make sure that he would not become too successful.

Interview with Dr. Van K. Tharp, Market Wizards

Tharp then describes how he conducted a parts negotiation with this client, where the parts (or beliefs) that were in conflict with one another came to a negotiated understanding and moved from conflict to alignment.

The result?

The trader who only ever made $75,000 per year had made about $650,000 in the two months after he completed the parts negotiation exercise as directed by Tharp.

While parts negotiation can be a complex process that relies on certain variants of cognitive therapy, simply identifying your inner conflict(s) can be an immensely valuable first step towards greater self-awareness. So many people spend years spinning their wheels in trying to obtain certain goals, and go through repeated cycles of what feels like self-sabotage in trying and failing to achieve goals they were not a good fit for, based on their beliefs or a lack of deep examination of their beliefs.

Spending some time alone exploring your beliefs around your most important goals in life, particularly ones that you have had trouble achieving in the past, can be the start of a major step forward in achieving your life’s objectives. If you do identify a conflict, there are many ways to begin working it out, from journaling exercises, mindfulness meditation, to self-improvement books or working with a trained therapist. The key is to be patient with yourself and not expect to resolve a deep inner conflict overnight.

However, as Dr. Tharp notes in Market Wizards, the benefits to working through inner conflicts of this nature can be immense, just as it was for the conflicted trader who grew his profits exponentially in a matter of months.

There is an untapped power in most individuals who have been in a state of conflict when the parts of themselves that were hostile to one another can be integrated and joined together. This is ultimately how individuals with previously average or suboptimal performance can achieve goals greater than they ever imagined.

So the next time you are feeling frustrated for lack of progress in an area of your life, examine your beliefs and see if you have any conflicts holding you back.

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