All auxiliary exercises are to be also locked like the standing exercise (see standing exercise)



1. Supply of head: against to high blood pressure

Standing attitude as during the standing exercise.

Tongue point by the lower teeth hold.

With both hands laterally you draw the cosmic Qi up and press it into the point Haihui (head center) inside (the two middle fingers face each other each other over the head). Then you press slowly the Qi with the same hand attitude before the Korper up to the point Dantian (under the navel) and centrifuges then the hands with the ill Qi laterally to the rear.

This exercise is to be repeated 20 minutes long. Daily 1-2 times.



2. Blisters: against illness of lung, Bronchin, brain and heart

They sit down on a low chair or on the sofa, put both to elbow on the knees, form with thumbs and index fingers of the two hands a ring and hold it between the brows. Slowly and deeply by the nose inhale (without hiss) to it any longer does not go, then just as slowly the cloudy Qi out to blow, until all air from the lung is.

This exercise is to be repeated exactly 10 minutes long. Daily 1-2 times.



3. Gegenatmen: against illness of liver, Galle, spleen, stomach, kidney, Gebärmutter, Prostata among other things

In standing. Pull to belly muscles strongly inward and when breathing out with the inhalation ease.

This exercise is to be repeated 200-1000 times daily. It must be made not necessarily at one time.



4. Kidney course: against Impotenz, subfunction of the kidney, Prostatahypertrophie

At the same time draw in the teeth together-bitten and the Anus.

This exercise is to be repeated 100 times.



5. Qiang gong (the intensive exercise): against illness of members, bones and chords and/or Menstruationsprobleme

This exercise can step also because of lack of time to the place of the standing exercise, in order to obtain in shorter time the same. The beginner is to deal however carefully with it!

Riding attitude. Arbitrary height, the more deeply the more intensively.

Palms fold up, fingers upward direct, before the chest hold. Eyes gently close. Time: arbitrary.



6. Vierer combinations: for people, which can concentration difficulties have and not to the internal peace come

At the same time: the toes firmly to the soil press, which clench fingers to the fist, which teeth together-bitten and which Anus draw in (see exercise 4).



7. Bagua course: People, which know the other exercises not to understand not to be able and nevertheless to practice want, also with this exercise begin

The hands perpendicularly one above the other (the internal hand above), palm to the tree, view also of the tree direct, knees easily bent, gone around the tree, in order to exchange the Qi with the tree (the ill Qi in the tree and the healthy Qi of the tree to you).

Man: first 33 times circle in Uhrzeigerrinchtung, then 33 times circle

against clockwise direction.

Woman: Turned around like the man. Altogether 66 circles.

The tree may not be a pasture or a Japanese Schnurbaum.

If necessary the exercise can be accomplished also in the area opposite a chair.



8. Reverse gear: against immune illness, back spanning among other things

Backwards go, as the hands in Schulterhöhe swing. The palms show always downward.



Remarks:

1 the exercise is not to be accomplished with full stomach.

2 during the time of the exercise one becomes more sensitive. Therefore one is to protect oneself particularly against cold weather. One is to dress warmly, eat and drink warmly, to wash also with warm water the hands, so that the flowing Qi is not deterred.

3) During the time of the exercise the Meridiane are open. In order to protect itself against strange “intruders”, one is to lock all Meridiane and points for each morning against bad Qi, by imagining this.

4 if after the exercise make chronic or latent symptoms acutely become, is this a kind “first degradation”. Simply strengthened practice or for advice ask.

5) If cold weather collects itself during the standing exercise at the leg and cannot not be derived, this can be eliminated by Fusstampfen, foot joint moving, Massage, Schmerzpunkt or toe pressures.

6 parallel no other mental exercise is to be practiced.

NLP and Fitness Training

by



Robert Dilts, Daniel Dilts and Lily Dilts

Personal fitness is one of the keys to a long, happy and healthy life. In addition to increased energy, vitality, strength and flexibility, the benefits of good fitness include better concentration, more stamina and greater readiness to meet life’s challenges. Research also shows that good fitness greatly reduces the risk of a variety of illnesses and physical problems such as osteoporosis, heart disease, and adult onset diabetes.



Despite the many positive consequences of fitness, people often struggle to achieve and maintain it. Sometimes this is due to lack of knowledge of effective health habits. It can also be because people need help to reshape their lifestyles and reprogram unhealthy patterns of behavior.



Physical and mental fitness both involve developing a certain degree of flexibility and stamina. These are achieved through consistent exercise and healthy life practices rather than through “quick fixes.” In general, fitness is a result of personal congruence, respecting the value of the body, and promoting the connection between mind and body.



Good fitness, then, is more than physical conditioning. Complete fitness applies to both body and mind. To be truly “fit” means to be healthy physically and mentally. Ultimately, fitness comes from living a healthy lifestyle. Nutrition and exercise are the two areas of focus necessary for good physical fitness. Both are very important. Eating a healthy diet, for instance, leads to having a healthy heart, a sturdy cardio vascular system, low body fat, strong muscles, solid bones, etc. Being fit also means having a healthy attitude and outlook on life. Attitude, physical conditioning and good nutrition all support each other to produce a healthy life style.



Helping people to achieve and maintain a better state of fitness is the role of fitness trainers. Fitness training is the act of teaching, supporting, helping and motivating clients to achieve a healthy lifestyle. This involves supporting clients on a number of different levels. In addition to the environmental and behavioral aspects of fitness, people must address issues relating to the development of new capabilities, beliefs, values and even their sense of identity. Thus, fitness training is much more than just counting repetitions on the weight machine. In addition to teaching proper lifting techniques, correct form and proper nutrition, fitness trainers counsel and listen to problems, acting as caretakers, guides, coaches, teachers, mentors, sponsors and, at times, awakeners for their clients.

The “Inner Game” of Fitness

The mental aspects of fitness are related to what can be referred to as the inner game of fitness. The concept of the “inner game” was developed by Timothy Gallwey (1974, 2000) as a way of helping people to achieve excellence in various sports (e.g., tennis, golf, skiing, etc.), music and also in the workplace. Success in any area of performance involves using your mind as well as your body. Preparing yourself mentally to perform well is the essence of your “inner game.”



The “outer game” has to do with physical skills. In fitness training, for example, this would involve how many calories to eat, which types of exercises to do, how many repetitions to make, etc. The “inner game,” on the other hand, has to do with your mental approach to what you are doing. This includes your attitude, confidence in yourself, your ability to concentrate effectively, deal with setbacks, and so on.



People tend to think of fitness training as being mostly focused on the “outer game” of fitness, but in order for people to successfully reach fitness goals, they must also develop their “inner game.” Many fitness trainers will tell you that the hardest muscle to train is the muscle “between the ears.” You can have a room full of the latest and best equipment, but if it is not used, it is no help. Some key components of a successful inner game of fitness include:

• Setting clear and achievable goals
  
  
• Developing the motivation and self-discipline to follow through on those goals
  
  
• Having tools with which to break old habits and set new healthy ones
  
  
• Updating your self-image and mental maps of yourself
  
  
• Appreciating and acknowledging your progress and building self-esteem
  
  
  

Neuro-Linguistic Programming (NLP) provides a model of change and a variety of tools that can help clients in this “inner game” of fitness. In addition to their applications to problem solving, NLP processes and principles can greatly enhance a person’s fitness in a number of ways.

Creating the Future

Goal setting is the first and primary technique used by fitness trainers to help their clients define what they really want. A key to goal setting is defining the right kind of goals. Fitness, for instance, is not about having the “perfect body” but rather about having your own body become fit and healthy. It is important for fitness trainers to help their clients rephrase goals such as “being thin” to “being healthy” (i.e., having strong bones, a good heart, able to touch your toes, etc.).



For women who have recently completed a pregnancy, fitness goals might include losing excess weight, toning up their lower abs and getting their breasts back in shape. For other women, fitness training is useful to help shape up their triceps, glutes, hips and abs.



While people frequently seek fitness training when they are out of shape or overweight, it is not always the case. Bob, for example, was an avid bicyclist. He had powerful legs but a weak upper body. Dan helped Bob to define and achieve a balanced physique by working with him to get his upper body to catch up with his lower body.



To succeed in reaching fitness outcomes, it is often important for fitness trainers to help their clients to begin by setting short-term (micro) goals. For instance, the trainer may urge a client who is very overweight to think in terms of losing 10 pounds first (rather than 90). But shorter term goals must then be connected to long-term outcomes and life-long motivators. It is important to keep in mind that fitness is not only about eating right or exercising so that you feel better for today. Fitness is preparing for your future and constantly looking toward the future.



As an example, Sue set a goal of losing 60 pounds for her wedding—which she did—but then gained it all back afterwards. Lily helped Sue to get a clearer picture of her longer term future and connect her current actions to that future. When thinking about her daily eating and exercise habits, Lily coached Sue to ask herself questions like, “What kind of body do I want at the age of 70? How do I want to move? How much energy do I want to have? What do I need to start doing today in order to ensure that I will get there?” As a result, Sue was able to develop more realistic, long-term health habits and reach a healthy, manageable weight.



People who are truly fit make fitness part of their identity. Good exercise and eating habits should be as natural as washing your face, brushing your teeth, bathing, etc.



Achieving good fitness involves making yourself a priority. We do so many things for others in our lives (children, partner, boss, clients, colleagues, etc.); it is also important to consider, “Who is taking care of me?”



Fitness is about doing what you can for yourself. When deciding what to eat, for instance, think of yourself as an expensive car. If you had a Ferrari or a Jaguar, what type of fuel would you put in it? Treat your body the same way. Think of your body as a temple. Care for it the best you can

Motivation and Confidence

Motivation is critical for people to achieve good fitness. A trainer can tell clients what they need to do and how to do it, but that will not make any difference unless their clients are motivated.



Many people desiring to achieve good fitness are challenged by motivational issues, especially when they are overweight, tired, discouraged, etc. People who are out of shape frequently feel very low self-esteem. They joke about their “multiple chins,” for instance, and feel embarrassed to be seen by others. This can even start a downward spiral. They will avoid going to the spa to work out because they are embarrassed to be seen in their gym clothes and, as a result, end up even more out of shape.



Good fitness requires a lot of learning, discipline and control. It can be difficult for people to keep up their momentum, and they may find themselves struggling with laziness and boredom. It is important for fitness trainers to help clients discover and focus on their own personal “motivators.”



A good illustration of this is the case of Scott. Scott is a business owner who weighed nearly 500 pounds. Scott knew he had to lose weight but did not want to. He signed up and paid for fitness training to help him lose weight but was not motivated to follow through. He constantly showed up half an hour late for a one-hour appointment, knowing he would then only have to work out for half an hour.



The big breakthrough for Scott came when Dan helped him to reframe his motivation from “losing weight” to “gaining strength.” Dan realized that Scott was a successful businessman who understood the need to meet a quota. Increasing strength was something Scott could relate to. As a businessman, Scott did not like to “lose” anything. More strength was something Scott could go toward and increase, rather than “lose.”



The resulting transformation in Scott has been remarkable. He drives an hour and a half three days a week to make his appointments, and if he misses, he reschedules immediately. He has lost more than 50 pounds, but, more importantly, has quadrupled his strength. Scott is happy that he is losing weight (now that he can get on a scale that is able to weigh him), but his biggest motivation is seeing his gain in strength. He makes it a point to try to compete with the biggest, strongest guys in the gym.



It is significant to note that Scott was originally planning to have his upper intestine removed or have his stomach stapled because of his ambivalence towards losing weight. It is important to realize, however, that drastic or extreme measures such as these do not ultimately lead to fitness. They leave flabby skin, affect the body’s ability to retain sufficient water and nutrients, and rob people of the opportunity to learn about healthy living for themselves. In addition to losing weight, Scott has benefited from becoming educated about good exercise and nutrition, learning about himself and seeing the relationship between strength training and food.



As Scott’s example shows, people’s belief and confidence in themselves and what they are doing can be important motivators for fitness. Fitness trainers are constantly building confidence in their clients by reinforcing their progress in strength, weight loss, body definition, proper form, etc.

Another important motivator for clients can come from thinking of others whom they care for and who look to them as role models or mentors. A key motivation for a woman, for instance, might be to become “a good strong role model as a woman for my daughter.”



Of course, the trainer himself or herself must at times be a key role model and motivator. Lily’s client Liz, for instance, hated the “gym scene” and refused to come to the gym to train. Lily offered to train Liz at home for months, even though it was not as efficient and desirable as working out at the spa. After fostering a strong sense of rapport and trust with Liz, Lily finally convinced her to come into the gym with a friend.



Knowing that Lily was going to be there to tell her how good she was doing and how good she looked was an important motivator for Liz. As a result, Liz now enjoys both the success and camaraderie of working out and she has lost 30 pounds.



Another benefit for Liz has been a change in her relationship with her husband, a “workout nut” who had been constantly nagging her about getting in shape. Now she can relate to his interest in fitness and join him in workouts at the gym.

Creating a Compelling Future

Creating a compelling future is one of the keys to winning the “inner game” of fitness training. Creating a compelling future involves visualizing desired goals and successful outcomes. Such images help to inspire us and propel us forward toward a dream, goal or outcome. In addition to helping create positive expectations, visualizing successful outcomes helps you to tap into and direct your own inner source of motivation. Compelling futures are typically formed around key values. To get a sense of your own values, consider for a moment the following questions: “In general, what motivates you?” “What inspires you?” “What moves you to action, or ‘gets you out of bed in the morning’?” Some possible answers might be:

Success

Praise

Recognition

Love and Acceptance

Setting my sights on something that I want to make my own (a home, an education, a thinner body, a job, a cause)

Making a difference in the world

These are all examples of “values.” When we can connect our future plans and goals to these values, those goals become even more compelling. Use the following structure with yourself or clients to link fitness goals to key values:

______________will help me to better achieve _____________because_______________________

My fitness goal                      my value(s)        the connection between them

According to NLP, we hold or represent these values to ourselves in the form of inner pictures, sounds, words and feelings. These sensory perceptions influence how we think and feel about something a great deal. Consider the ways in which your sensory perceptions influence your degree of motivation and desire. Think of an advertisement on television that made you want to own the product being advertised, for example. What was it about the ad that inspired you to go out and buy the product? Was it the color, brightness, music, words, tone of voice, movement, etc.? These particular features are known as “Submodalities” in NLP, and often play a significant role in people’s degree of motivation and desire.



The following process uses imagination, values and visualization to help create an inner representation of a compelling future.

Visualizing Success

1. Think about both your near-term and long-term future. Ask yourself, “What kind of body do I want at the age of 30, 40, 50, 60, 70? How do I want to move? How much energy do I want to have?” Put yourself into your future and imagine that you have already achieved these fitness goals and are really enjoying it. Get in touch with what you are seeing, hearing, doing and feeling while enjoying these benefits.
   
   
   
   
2. Adjust the sensory qualities of your internal experience in such a way that it feels more motivating or compelling. Does the experience become more compelling and attractive if you add more color? Brightness? Sound? Words? Movement? What happens if you bring the image closer or move it farther away? What happens if you make the sounds or words louder or softer? What do you experience if you make the movement quicker or slower? Identify which qualities make the experience feel the best. Applying those qualities, experience the good feelings that come from having your outcome.
   
   
   
   
3. Ask yourself, “What do I need to start doing today in order to ensure that I will get my long-term fitness goals?” Remember the good feelings that will come from reaching your successful future as you picture yourself doing the exercises and eating the way that you know will help you move closer to your fitness goals.
   
   
   

   
   

Breaking Old Habits


Changing old habits and establishing new healthy ones is another key to achieving good fitness. It is important, for instance, for fitness trainers to remind and support their clients to step back and “think before you react.” For example, let’s say a client is offered some cake. Rather than just reacting by reaching for it, clients need to first ask:

How much do I want?

Why do I want it?

Do I need it?

What will it do for me to have it?

What do I really need right now?

As these questions imply, it is important for clients to sort out “need” from “want.” If a client wants the cake for the taste, for instance, how much does he or she need in order to get the taste? If it is to please him/herself or others, are there other or better ways to do that? Additionally, if the client is eating in order to please him/herself, he or she can be prompted to consider, “Are you really pleasing yourself?” “After you’ve eaten it, how will you feel?”



Questions such as these can help clients to switch their mindset about healthy eating from “depriving myself” to “benefiting myself.” This allows people to get the same feeling and gratification from not eating as they do from eating. They begin to realize that the pleasure of not eating will last longer than that derived from eating, and that the “food hangover” that frequently results from overeating is not nearly as pleasant as the feeling of energy and confidence that comes from eating healthy portions of food.

Clearing the Past

In working with diet and weight issues, it is also useful for fitness trainers to help clients understand the difference between themselves and food, what food is for, and what their internal “programming” is regarding food. Some people, for instance, “live to eat” rather than “eat to live.” Frequently, these people have addictive personalities or enjoy food beyond enjoying themselves. In some people’s minds, their joy in life comes from sitting down and eating something, trying to satisfy a never-ending need.



This is where NLP can be especially handy for fitness trainers. NLP techniques, such as those involving time line work, can be very useful to help bring such a person back into his or her past in order to discover the situations that triggered unhealthy eating habits leading to weight gain. This can be a very emotional process, but once people find such triggers, the issues can be addressed directly rather than trying to resolve them through food. It does take more than one or two sessions to identify and reprogram the problematic thought process. Taking this time, however, can help lift the burden off clients so that they are able to move forward with their lives.



Alexandra, for example, struggled with eating and weight issues. The source of this struggle was her feeling that she didn’t deserve to be happy. Dan helped Alexandra explore the origin of this feeling and discovered that she came from a rural, blue collar background. Having grown up in a poor but hard working community, Alexandra felt guilty that she was more successful than her friends and relatives. She was afraid that if she embraced her success, she would lose it all. Overeating and being heavy was a way of punishing herself for her success, so that she wasn’t perfect.



Once they discovered this fact, Dan helped Alexandra to reframe the part of herself that felt guilty for succeeding. As a result, she was able to change her perception of success and find other, more satisfying ways to share and celebrate her accomplishments with her family and friends.



Elise struggled with her weight for a different reason. She had recently broken up from a long-term relationship with a particular man. In exploring her unhealthy relationship toward food, she discovered that she was doing it as a way to punish both herself and her old boyfriend. A part of her thought, “I’ll show him and get huge. I’ll punish myself, then he will feel sorry for me for being unhealthy and overweight.” This realization allowed to Elise to reevaluate her feelings toward herself, her ex-boyfriend and food, and to get satisfaction by taking care of herself rather than punishing herself.



By exploring the events that triggered her unhealthy eating habits, Lily helped Josie discover that her conflicts about fitness stemmed from the fact that she had been molested by her father when she was a child. Josie placed much of the blame for this situation on her mother, who always wore a lot of makeup, and who Josie thought of as a “slut.” As a consequence of her family history, Josie did not want men to look at her. She hid behind her weight, choice of drab clothing and lack of makeup. After working with Lily using the NLP Change Personal History technique to bring new resources to herself and resolve these past events, Josie went home, dressed up and put on makeup for the first time. This was the beginning of a series of positive changes that Josie claims has “changed her life.”



Triggers and beliefs that come from the past are not only limited to weight and food issues. Kathy, for example, was a ski instructor who was involved in fitness training in order to get to the next level in her profession, but she found herself “holding back.” An exploration of her resistance revealed that she felt she “shouldn’t do things boys can do.” Her belief was, “If I am fit, I will compete with men. Girls don’t do that.” When Dan helped Kathy reflect upon the origin of this feeling, she recalled that her mother had discouraged her from being athletic. It turned out that Kathy had an older brother who was not interested in athletics at all. Kathy would use the equipment her parents bought for her brother and her mother thought her father would “have a fit” if he found out. By going back on her time line to explore the situation more deeply, Kathy realized that her father did not mind at all. As a result, Kathy was able to let go of the concern that she had picked up from her mother’s well-intentioned but erroneous messages and reach her goals on the ski slopes.



Another example is that of Margaret who was thin and athletic but had suffered a back injury. She came to fitness training in order to regain her strength after surgery. She sometimes found herself listless and demotivated, however, because she had lost a lot of money in the stock market as a result of the “dot-com” crash. Lily found that it was important for her to do a lot of listening and be an outlet for Margaret’s concerns in order for Margaret to be able to keep up with her training.

Reframing Inner Resistance

To successfully reach our goals we must be congruent about getting what we want. This is another aspect of the “inner game” of fitness. Sometimes it seems like parts of us are resisting or uncooperative. Other times, we have to struggle against old patterns, responses and habits. Rather than simply fighting with ourselves, it is important to acknowledge and communicate with all parts of ourselves.



Reframing is an NLP process for addressing inner conflicts and resistances, and for finding other ways to get what we want without engaging in negative or unwanted behaviors. Reframing is based on the principle of “positive intention.” The principle of positive intention states that at some level all behavior is (or at one time was) “positively intended.” Another way to say it is that all behavior serves (or at one time served) a “positive purpose.” The positive intention behind eating candy, for instance, might be to “get comfort” or “reward yourself.” “Comfort foods” often serve the positive purpose of “showing appreciation or love,” “sharing a good experience,” etc. In other words, every behavior or response is aimed at getting for a person something that he or she wants.



Once the positive intention behind the seemingly negative behavior has been discovered, resources and alternatives are much more easily found. It is important to have other choices that are at least as effective for fulfilling the positive intention of the problem behavior in order to appropriately address the obstacle. If there are no alternatives, the risk is that you will become conflicted internally or become overly rigid or dogmatic.



Rather than feeling mistrustful, guilty or ashamed about difficulties, the recognition of your own positive intention leads to trust in your positive intent and gives a specific strategy for finding other alternatives rather than becoming frustrated with the typical “trial and error” (or “trial and horror” as it is sometimes called) approach.



The reframing process involves understanding and communicating with yourself, rather than blaming or punishing yourself. The basic steps involve:

1. Identifying the problematic feeling, response or behavior. What behavior or response is getting in the way of achieving your fitness goals?
   
   
   
   
2. Discover the source of the problematic feeling, response or behavior in your past. When did this pattern of behavior start and what were the conditions under which it began?
   
   
   
   
3. Finding the positive intention or motive for the response or behavior. What is that behavior getting for you or trying to do positively for you?
   
   
   
   
4. Identifying alternatives and resources that address the positive intention, but without the negative consequences. What other ways can you get that benefit? What resources and understandings do you have now that you did not have at the time that this pattern started? (Find as many as you can.)
   
   
   
   
5. Enlisting the cooperation of all of your inner parts to try a new choice. Which new alternatives and resources would you be willing to try? (Choose at least three.)
   
   

   
   

Conclusion


Fitness and fitness training are classical examples of the overlap between mind and body, and achieving good fitness demonstrates the many benefits of that integration. The ultimate objective of fitness training is to create a positive spiral in which eating right and working out lead to better sleep and more energy which, in turn, lead to natural weight loss and other positive physical results. People are often surprised to find that they can be eating plenty of food and losing weight at the same time.



While fitness training requires a certain amount of motivation, learning and effort to begin, once a good routine is in place, it becomes a form of therapy and stress management in and of itself. Workouts are like a type of therapy and can become powerful ways of relieving stress and provide an effective strategy for taking preventative action. Fitness trainers can show clients how to use workouts to relieve stress. Then, instead of having a couple of drinks at the bar, clients can go to the gym for the same amount of time and work out the stress.



While there are basic guidelines for achieving good fitness, it is important for fitness trainers to remember that each person is unique and trainers must treat them as individuals. Fitness training and nutrition plans need to be adapted to the needs of each client, helping clients find their individual motivators and dealing with potential inner blocks and resistances. NLP is an important resource for fitness trainers in order to accomplish this.



NLP Tools such as establishing Well-Formed Outcomes, Creating a Compelling Future using Time Lines and Submodalities, Mental Rehearsal, Future Pacing, Changing Personal History and Reframing can be used to help clients achieve success in the “inner game” of fitness.

About the Authors

Authors Dan and Lily Dilts are both certified Fitness Trainers and certified NLP Practitioners. They help people to unite their mind and body to achieve good fitness through their company Whole Person Fitness. Dan and Lily combine NLP and fitness training in 1, 5, 10 and 20-day training packages. For more information, see their web site at http://wholepersonfitness.com.



Robert Dilts is an internationally known NLP trainer and developer with a strong interest in fitness and health. He is co-creator of the NLP Health Certification Training (with Tim Hallbom and Suzi Smith) and a founding board member of the Institute for the Advanced Studies of Health (IASH). Robert is an author of 20 books on NLP. His most recent book From Coach to Awakener describes the tools that coaches can use to support their clients to grow and change at a number of different levels. You can find Robert’s training schedule and other NLP resources at http://nlpu.com.

Bibliography of Reference Texts and Related Readings

Bandler R. and Grinder, J., Frogs into Princes, Real People Press, Moab, UT, 1979.



Dilts, R., From Coach to Awakener, Meta Publications, Capitola, CA, 2003.



Dilts, R., Changing Belief Systems with NLP, Meta Publications, Capitola, CA, 1990.



Dilts, R. and DeLozier, J., The Encyclopedia of Systemic Neuro-Linguistic Programming and NLP New Coding, NLP University Press, Santa Cruz, CA, 2000.



Dilts, R., Hallbom, T. and Smith, S., Beliefs: Pathways to Health and Well-Being, Metamorphous Press, Portland, OR, 1990.



Dilts, R. and Hollander, J., NLP and Life Extension: Modeling Longevity, Dynamic Learning Publications, Ben Lomond, CA, 1992.



Gallwey, T., The Inner Game of Tennis, Random House, New York, NY, 1974.



Gallwey, T., The Inner Game of Work: Focus, Learning, Pleasure and Mobility in the Workplace, Random House Trade Paperbacks, New York, NY, 2000.



O’Connor, J. and Seymour, J., Introducing Neuro-Linguistic Programming, Aquarian Press, Cornwall, England, 1990.



Rodin, Judith, Aging and Health: Effects of the Sense of Control, Science Vol. 233, September 19, 1986, pp.1271–1276.

The Art Of Mental Programming
Most of the programming techniques described here work in a similar
manner:

You visualize what you do not want and mentally diminish it, eventually erasing it.
You then you visualize what you do want, imagining the goal accomplished.
But to amplify and powerize your mind you must go to the alpha level by lowering your brain waves.

That is the time to program for change.

When programming for a goal you are sending out a message to the universe that you either want something you do not have or wish to rid yourself of something you do have.

This message travels in much the same way as a television or radio program is transmitted, the station sends out waves of energy.

The wave of energy travels in all directions until it reaches a receptive device of some sort, a radio or television set. Providing the frequency or amplitude of the waves and receptor match, there is a fitting, and the program manifests.

So it is with your own programming. When you program, using the
various techniques you find here, you must be in the outgoing mode.

When you receive, you must be in the receptive, incoming mode. Constant programming will keep you in the outgoing mode.

As long as you are transmitting, you cannot receive. You must place yourself in the receptive mode at some point in time to attract the result you are programming for.

Expect it to happen and it is more likely that it will happen.

As with so many facets of life, the injunction “Ask, and ye shall receive” is much more effective when carried out at the ten-cycle alpha level of mind.

One of the most versatile and effective programming techniques in our repertoire is Center Stage. You may use Center Stage to gain something that you want, or to rid yourself of something that you do not want.

The essence of the technique is this:

Consider for a moment what it is that you want. Think about the end result only. Do not contemplate how to go about getting to the end result; imagine only having achieved it.

If there is something standing in the way of that achievement, think about that as well. When you visualize yourself with the positive outcome of your programming, visualize the date you wish the action to take place by.

Here is how the three-act Center Stage technique works.


Center Stage—Programming Technique
Go to the alpha level (center yourself) by counting downward from
three to one, and then from ten to one.

Visualize yourself outside a theater.

Walk into the theater and take a seat in the third row center.

Act I.

Imagine that the curtain is closed and you are sitting comfortably.
When that picture is set in your mind, visualize the curtain opening and
then project yourself onto the stage. Bring people who are involved in the problem onstage as players in the drama. Imagine the scenery, the setting; bring in appropriate props. Now act out your problem.

After going through the scene, project yourself back to your seat and
visualize the curtain closing. When the curtain is closed, mentally write a
big red NO on the curtain and mentally say, “Any past feelings that hold
me to that scene, I now release.” Sense those feelings departing from you, and note how you feel when rid of them.

During the second act you are going to set the pattern to make the
way easier for yourself. Most successes are preset patterns. The more you do something, the easier it becomes. Your goal in the second act is to remove all limitations from you so that you can go beyond your normal abilities, and most of all to set the pattern for success. During the second act of Center Stage you will use an alter ego to smooth the path for you.

Think for a moment: if you could choose any personality, living or not,
real or fictional, to represent you in a play about your life, whom would you choose? This player will be your alter ego and will act out the solution to your problem during Act II of Center Stage.

You have already determined the positive end result of your program; during Act II you will remain in the third row center while your alter ego acts out the scene. You are the director as well as the author, and you may mentally change the action at any time.

Act II.

The curtain opens. Your alter ego is playing your role. You begin
the action. Visualize your alter ego being successful at whatever you are
programming for. See the action. If you’re programming for a new job, for
example, see your alter ego in the new job, sitting at your desk or performing your duties on a stage set to represent your desired work environment.

Have the players act out all of the activities of your goal accomplished.
Now bring in a target date: hear a voice saying, “This will happen by
[target date].” After setting the date, close the curtain. Mentally write on the curtain the word BETTER, and mentally state, “This is the way I want it to be.”

Now that the pattern has been set, the only thing remaining is to do it
yourself, and that is when Center Stage Act III comes in. During Act III you will play out the scene in exactly the same way as your alter ego did. The pattern has been set. You bring in the same date. This time, however, you will project yourself into the scene and you will act out the positive end result of your program accomplished.

Act III.

The curtain opens. You project yourself onto the stage and act
out the solution to your problem in the same manner as did your alter ego in Act II. Bring in the same target date. After acting out the positive end result with yourself playing the starring role, project yourself back to your seat in the third row center. The curtain closes, and you mentally write on the curtain, better and better. Mentally state, “This is the way it will be.”

That is the Center Stage technique.

We recommend doing Center Stage three times for each one of your
goals. Run through Center Stage once each day for three consecutive days.

On the first day perform Acts I, II, and III; on the second day, do only Acts II and III; and on the third day, perform only Act III. Act I is visualized only once for each problem.

You want to concentrate on the solution.

Case Study: Bankruptcy To Success in Four Months
Bart Alexander was a gentleman who had recently gone through a
bankruptcy and for a year had languished at home feeling sorry for himself.

A friend brought him to our seminar, and Bart showed some interest in a
a few of our ideas. But the Center Stage programming exercise was, he said, “a bit too far out to accept.”

That was fine with us, since many of our instructors had been skeptical
themselves when first hearing of such techniques. We do welcome skeptics as long as they have an open mind and will take a wait-and-see attitude.

Bart was skeptical, but he participated in the Center Stage exercise,
programming as his end result a thriving business and a new car (specifically, a gold Lexus LS430).

He wasn’t sure what business he wanted to be in so long as it was not
his old one, and so for his end result he visualized himself sitting in a plush office and speaking on the telephone, his feet up on the desk (only the boss puts his feet on the desk with impunity). He also saw himself signing checks, going to the bank, and taking delivery of his brand-new Lexus.

He visualized himself being admired in his new car and mentally saw all the positive actions of a successful businessman. He did feel a bit foolish doing the exercise, he said later, but he considered the fact that millions of people all around the globe have been using positive thinking concepts for problem solving and programming for more than thirty years—he decided to take a wait-and-see attitude.

He called us four months later to report with excitement, “It all
happened. Everything! I can’t figure it out. It doesn’t make sense to me, but here I am in my plush office, head of a successful business—and oh yes, I have a brand new Lexus in a parking spot with my name on it.”

Bart Alexander brought more than forty of his friends to the class after
that, and his success story was repeated by many of them.
Programming works. Try Center Stage for one of your goals.

Millionaire Mindset: Is Your Brain Sabotaging Your Success?

Have you ever wondered why some people seem to have success with every they do? Do they have some magical power that you don't?

Would you like to quickly get that power?

In a recent interview for the List Crusade program, T. Harv Eker revealed what he calls the Millionaire Mindset-which gives extremely successful individuals what seems to be an "unfair advantage."

(Note: To access T. Harv Eker's complete audio interview for fre^e, see end of article)

Harv is the author of the best-selling book, SpeedWealth, as well as several highly-acclaimed courses such as The Millionaire Mind Intensive, Life Directions, Wizard Training and Train the Trainer. He is also the producer and trainer of the world-famous Enlightened Warrior Training.

He went from zero to millionaire in only 2-1/2 years using the Speed Wealth principles he teaches. He shows you how to instantly rid yourself of limiting beliefs that have stopped you from accumulating wealth in the past.

According to Harv, your subconscious mind may actually be holding you back from the success you want in business and in life.

The subsconscious is much more powerful than your conscious mind.

It's like an ice berg, most it is beneath the surface, and that's usually what sinks ships.

Ideas and misconceptions you formed as a child can affect your life right now. If you believe that money is evil or that money is hard to get, then your success will be limited. Even though you go through the motions to reach your goal, you'll always fall short on something that is critical to your success.

You mind will automatically stop you just like a thermostat turns off the heat at a certain point.

Harv revealed 4 easy actions you can do today to change your money thermostat and gain a millionaire mindset right now.


Stop blaming. You must take absolute responsibility for every result in your life. If you didn't cause it that means it's out of your hands. If you did cause it then you can change it and get a different result. What an empowering concept …

Stop complaining. When you complain you are focusing on the problem. The Universal Law of Attraction states that what you focus on expands. So if you focus on what you don't want, what do you think you'll get?

Use the power of intention. Take your current goal and double, triple it, or even quadruple it. For example, if you want to make an extra $2000 a month, raise your goal to $8000. According to Harv, the Universe usually gives you only what you ask of it. You'll probably find that the higher goal will spark your enthusiasm and energy and make it much easier to accomplish.

Bless that which you want. If you see someone with a fancy car, say "Good for him!" Don't use your key to scratch it as you walk by like a lot of jealous low brow people may do. If someone you know gets a promotion, congratulate him. This secret alone will cause money and wealth to start flowing to you effortlessly.
The more you practice these Millionaire Mindset secrets, the more you'll discover that you too will experience dramatic success and your income will skyrocket.

The Principles of Successful Trading

Over many years of trading, I’ve found certain principles to be true. Understanding and using basic principles provides an anchor of sanity when trading in a crazy world. Whenever I find myself under stress, questioning my judgment or my ability to trade successfully, I pull out these basic trading principles and review them.

Don’t Try to Predict the Future
I used to think that there were experts and geniuses out there who knew what was going to happen in the markets. I thought that these traders and market gurus were successful because they had figured out how to predict the markets. Of course, the obvious question is that if they were such good traders, and if they knew where the market was going, why were they teaching trading techniques, selling strategies and indicators, and writing newsletters? Why weren’t they rich? Why weren’t they flying to the seminars on their Lear Jets?

No one knows where the market is going
It took me a long time to figure out that no one really understands why the market does what it does or where it’s going. It’s a delusion to think that you or any one else can know where the market is going.

I have sat through hundreds of hours of seminars in which the presenter made it seem as if he or she had some secret method of divining where the markets were going. Either they were deluded or they were putting us on. I have seen many complex Fibonacci measuring methods for determining how high or low the market would move, how much a market would retrace its latest big move, and when to buy or sell based on this analysis. None has ever made consistent money for me.

No one knows when the market will move
It also has taken me a long time to understand that no one knows when the market will move. There are many individuals who write newsletters and/or books, or teach seminars, who will tell you that they know when the market will move.

Most Elliott Wave practitioners, cycle experts, or Fibonacci time traders will try to predict when the market will move, presumably in the direction they have also predicted. I personally have not been able to figure out how to know when the market is going to move. And you know what? When I tried to predict, I was usually wrong, and I invariably missed the big move I was anticipating, because it wasn’t time.

It was when I finally concluded that I would never be able to predict when the market will move that I started to be more successful in my trading. My frustration level declined dramatically, and I was at peace knowing that it was OK not to be able to predict or understand the markets.

Know that Market Experts aren’t Magicians
Some of the experts that try to predict the markets actually make money trading the markets; however, they don’t make money because they have predicted the market correctly, they make money because they have traded the market correctly.

They don’t profit from their predictions

There is a huge difference between trading correctly and making an accurate market prediction. In the final analysis, predicting the market is not what’s important. What is important is using sound trading practices. And if sound trading habits are all that is important, there is no reason to try to predict the markets in the first place. This is the reason strategy trading makes so much sense.

They have learned trading discipline
I have watched many market gurus continually make incorrect market predictions and still break even or make a little money because they have followed a disciplined approach to trading. More importantly, they used the exact same principles that I will show you how to use in creating your strategy. It is these principles that make the money, not the prediction.

To be a disciplined trader, you have to know how and why to enter the market, when to exit the market, and where to place your money management stops. You need to manage your risk and maximize your cash flow. A sound trading strategy includes entries, exits, and stops as well as sound cash management strategies.

Even the market gurus and famous traders don’t make money from their predictions, they make it from proper trading discipline. Over the years, they have learned the discipline to control their risk through money management. They have learned to take the trades as they come, and not forgo a trade because they are second-guessing their strategy or the market. These are the same practices that you will learn to include in your trading strategy.

They profit from sound cash management & risk control
Sound money management and risk control are the keys to being a profitable trader. I will say over and over again, it is not the prediction or the latest and greatest indicator that makes the profit in trading, it is how you apply sound trading discipline with superior cash management and risk control that makes the difference between success and failure.

I often tell the story of the great fish restaurant that opened up just down the street from my office. It opened with great fanfare and was ranked in the top five restaurants in the city. The food was outstanding. But it only took a little more than a year and this great restaurant was out of business. Why? Because the key to running a good restaurant is not the food…it is cash management and risk control. It is making sure your business is run efficiently, keeping your costs (risk) in control, and managing your staff effectively. If you believe that the taste of the food is what makes a great restaurant, think of how great the food is at your favorite fast food restaurant. But, someday, watch how well that restaurant is run.

Just as in the restaurant business, the key to profits in trading is not in the prediction or the indicator, but how well the trading strategy is designed and executed. The ability to achieve risk control and cash management will make the difference between a successful trader and an unsuccessful trader. If you ever have the opportunity to watch a successful trader, you will see that they don’t worry about where the market is going or about predicting when the next big move will take place. They aren’t looking to tweak their indicator. They are worried about their risk on each trade. Is the trade being executed correctly? How much of their total account is at risk? Are the stops in the right place? And so on.

They don’t have superior performance numbers

If you want to have some fun, look at the performance of a successful market expert, one who is known for his or her market predictions and trading expertise. You will find that their performance numbers really aren’t any better than an average trading strategy. The percentage of profitable trades, the return on the account, average profit to average loss, number of losing trades in a row…all of these trading parameters are within the average trading strategy performance parameters.

Why is this? Because you can’t predict where the market will go and when it will move. But if you use correct strategic trading disciplines, you will make money whether you try to predict the market or just trade a good strategy. You might as well save yourself a lot of time, energy, and mental anguish and trade a good strategy.

Be In Harmony with the Market
We make money trading when we are in harmony with the market. We are long when the market is going up, and short (or out of) the market when it is going down. If we bring an opinion with us while trading, we will end up fighting the market. We keep trying to go long as the market is declining, or we keep shorting a market that it is in a bull phase.

Don’t fight the Market
Fighting the market is not good for two reasons. First, we lose money. How much we lose depends on how well we are managing our money and controlling our risk. Second, fighting the market affects our judgment, and causes us to try to confirm that our judgment is correct, or persist in fighting a trend so that we will eventually prove to be correct. We figure that if we persist long enough, no matter how long it takes, we will eventually be right.

The same can be said for being in a canoe in a river. There is a reason for leaving your car downstream, launching your canoe upstream, and paddling downstream. It is much easier and eminently more fun to go with flow and paddle downstream. We could do the opposite and paddle upstream. Eventually we may even get to our destination, but the cost would be substantial. It would take much more time, more physical and emotional stamina, and we would be constantly fighting the current. Reaching the goal would not be worth the cost.

Even if you ultimately make money fighting the market, it is not worth the price you have to pay, both financially and with peace of mind.

Let the market tell you what to do and when
The correct attitude for successful trading is to let the market tell you what to do. If the market says to go long, buy, and if it starts to go down, sell. This sounds easy but it is much more difficult than you think. We always like to believe that we can be in control. We want to be in control of our trading and of the market. If you accept the notion right now that you cannot control the market, that all you can control is your execution of trades, you will take a great step toward being a successful trader.

Instead of trying to control the market, let the market tell you what to do. Let the market and your strategy take you long rather than you personally trying to predict or decide when to go long. Let your strategy take you out or get you short. Once you realize that you can’t understand the market, and that you can’t predict when the market will move, you will move into that detached state of mind where you let the market take you where it will when it wants to.

The market gives and the market takes away
To remove your personal biases and let the market tell you what to do is to give up control, to give up the notion that you are actually in charge of how much money you make. For profitable trading, you need to move into the mental state of letting the market determine the profits, not you. It won’t be whether you predict the market correctly that determines the profits, but whether your strategy is in a profitable mode or drawdown mode as determined by the market.

So, let the markets tell you what to do based on your strategy. Let it get you long and put you short. Let the market determine how much money you are going to make. Trade your strategy and let the market do the rest. And know that the market gives money and the market takes away money. Your goal should be to develop a strategy that gives you more money than it takes away.

Have a Healthy Time Horizon
One of the biggest problems new traders have is that they think they will make a large amount of money right away. They think they will get rich quick. This type of reasoning is very similar to the short-term thinking in American business in general, usually managing for the current quarter’s profits, focusing on short-term earnings at the expense of long-term investment and profit growth.

Trade for profits over time
Traders tend to get wrapped up in current market conditions, the news of the day and the current trade, usually at the expense of the big picture and profits over time. My grandfather used to have a saying, “You can’t go broke taking profits.” He was very wrong. You can go broke taking profits. If you take profits before the market tells you to, or you succumb to fear and close out the trade before its time, you are focusing on the short-term and forgetting how to make money over the long haul. Close out no trade before its time.

Give your trading strategy enough time to work
We tend to be impatient, and we sometimes think that we should get instant gratification. This will not work in trading. The only way you will really know whether you are a successful trader is to be successful over time. A week or a month will not be enough time to tell you how you are doing. You should be trading with the objective of making money in the long run, consistently, and with the confidence that your strategy will make money given enough time.

One of the benefits of trading with a strategy is that having done the requisite historical testing, you should know how long it should take you to start making money. You should have an idea as to the length of time that the strategy has lost money in the past, how much money it has lost, and how long it will take the strategy to become profitable. If the strategy has proven profitable historically, it should be profitable in the future. You just need to give it the necessary time to do its work.

Understand the Psychological Keys of Trading

There are many people who teach the psychology of trading. There have been many books written and effort spent on seminars trying to teach the discipline needed for trading. I don’t think trading is that complex. I have developed a few simple psychological rules for myself, and once you accept them, they should greatly enhance your ability to trade effectively.

Accept losses as a cost of doing business
Most successful traders will tell you that the most difficult thing about trading is accepting the losing trade. We all have the desire to be to be right, to be correct all of the time. For novice traders, the losing trade means that something is not working and that you have somehow made a mistake. For experienced traders, losses are just a cost of doing business.

Some of the best traders in the world lose money on more than half of their trades. If you look at the performance results of the best traders and money managers, you will see that they all have a large percentage of losing trades. If you trade, I guarantee you that you will have losing trades. Learn to love losing trades. They should be your friend because you will be spending a lot of time with them.

Use historical statistics
I don’t think anyone has ever traded without first looking at historical statistics. Even some traders who deny they are strategy traders have used historical data. And before EasyLanguage and TradeStation were available, most good traders developed a strategy’s history by hand. I can remember countless hours pouring over charts spread out on the kitchen table, writing down trades by hand. Before I would trade it, I absolutely insisted on knowing what the strategy’s personality was and how much money it would have made.

Using historical statistics gives you great peace mind, particularly in learning to love losing trades. Knowing the history of a trading strategy can give you tremendous psychological comfort during those tough periods of losing trades and drawdown. Historical statistics tell you how much money the strategy has lost in the past, how many losing trades it has had in a row, and the largest losing trade the strategy has experienced. This is very important information if you are learning to accept losing trades. Comparing historical data with the current string of losses and drawdown can give you much comfort that what you are experiencing now is not unusual and has happened before. Maybe not in exactly the same manner, but it has happened before.

Let the market and STRATEGY determine the profits
Don’t have an opinion, don’t try to predict the market, and don’t try to second-guess your strategy. It’s human nature to have an opinion about things, but this opinion can become a stumbling block if we let it affect our trading. One of the alluring aspects to having an opinion on the market is the exhilaration of being right. Even though we know that the chances of being right are slim, we nonetheless want to prove our intellectual prowess by being right.

Your trading strategy is ultimately a little business. You have developed and tested the product and are now operating the business in the real world. Let the strategy be the strategy. Let it make the money you know that it can. And know that if the market doesn’t move in the manner that will allow the strategy to make money, it won’t make money. Ultimately, the market determines the profit through its movement. If it doesn’t make that move, there will not be profits.

Put the responsibility of making money on the strategy and the market. When they work together, you will have a profitable business.

Don’t Trade for the Money
I have met many successful people, and the one thing that they have in common is that they love what they do. Many have told me they can’t believe that they actually get paid for doing what they do. They have so much fun they feel guilty taking money for doing it. Many successful people will tell you that they would do what they do even if they weren’t paid at all.

Successful people don’t work for the money
Work hard and love what you are doing and the money will follow. Successful people work first and count the money later. Sometimes they don’t ever count it, and some don’t even know (or care) how much they have. They just know that they have enough to allow them to continue what they are doing; working hard and having fun.

Love trading for its own sake
I know that many individuals want to trade because they think that they can make a lot of money easily and quickly. Because of the low start-up costs for trading as compared to other businesses, they think that trading should be the easy road to riches. Their goal is to make a lot of money fast. These are the people who come to seminars and want an indicator that will guarantee profits. They don’t want to learn the ins and outs of the business; they want the magic indicator that will get them the money they desire. They are doomed to failure.

I remember a guy named John walking into a seminar I was about to teach. He threw up his hands and said, “Ah, Traders! I am glad to be home.” This individual was a successful trader. John loved going to seminars, not so much for the techniques and indicators, but for the camaraderie. He loved being around traders, talking with traders, analyzing trading strategies and techniques, and learning about the latest and greatest trading technology. He loved learning the latest features added to TradeStation and finding out a new way to use EasyLanguage.

He loved designing new indicators, and spent countless hours working on new and different ways to exit the market. He was excited about getting up early in the morning to monitor the overnight market information and checking what the S&P was doing in London. He looked forward to calling his broker and putting in his orders. He loved watching his strategy run on TradeStation. He was exhilarated when he had to call his broker and give him a lot of grief for the latest bad fill. He even loved losing trades. Even when he had to take a losing trade, he was still doing what he loved to do—trade.

John is a successful trader. He loves what he is doing. And as long as he can keep on trading, he will be happy. The money he makes is secondary, but he makes a lot of it. He can’t believe that he can have all of this fun and make money as well.

Concentrate on Execution

All of your market and strategic analysis should be done before the markets open. The strategy design should be clear in your mind. You should have the historical Performance Summary of your strategy at your fingertips to remind you of the personality of the strategy, how much money it has made over time, and what its largest string of losses in a row has been. You should know what kind of orders you are going to place, and how you are going to communicate this to your broker.

The last thing you should have to worry about during market hours is where the market is going, and whether to be long or short. Your strategy will tell you all of this. You should not be concerned about the news, or even if you are making or losing money. You should not be concerned with analyzing the market, always reserve this for when the market is closed.

The only thing you should be doing during market hours is concentrating on effectively executing your strategy. If you can’t execute your strategy effectively, there really is no point in trading. There are two sides to trading, strategy development and trading execution. During market hours is when you should concentrate on execution and nothing else.

Always Be In the Market
I have always characterized trading the trend as keeping your costs down while waiting for the big move. We know that to trade profitably, especially for trend traders, you need to be in the market for the big move. Many traders stay out of the market when it’s quiet and try to predict when the big move will occur. These people invariably miss the big move.

Instead of trying to predict when the big move will occur, your task becomes to minimize your losses and drawdown while you are waiting for the big move to occur. This is a different way of looking at trading that focuses on managing cash flow and risk rather than finding magic indicators and making good predictions. Trading thus moves from a hobby to a business.

The only way to ensure that you won’t miss the big move is to always be in the market.

Buy High - Sell Low
Probably the most interesting rule for successful trading is to Buy High and Exit Higher, and Sell Low and Exit Lower. This is counter-intuitive to what we all have a natural inclination to do, which is buy low, sell high. Most great trading strategies are counter-intuitive. They are not based on our normal human nature and the normal human reaction to the markets. They consistently make money because they are designed with market sense not human common sense.

In the final analysis, any market is just a collection of individuals making decisions and placing money in the market based on these decisions. Most of these individuals are doing what comes naturally to humans, buying low and selling high. Statistics show that 95% of these people lose money.

To be a successful trader, you have to do the opposite of what this 95% is doing. It isn’t easy, because it goes against your human nature. But any strategy that is successful over time will most likely follow the rule of Buy High, Exit Long Higher and Sell Low, Exit Short Lower.

Thought I would start things off by sharing some of the things I have learned through my own experiences, and how it might apply to daytrading the NYSE. This is intended to give a little insight to some of the newer traders who are having a hard time finding information on reading the tape/specialist. I would welcome any of the more experienced traders to correct my mistakes or fill in things that I have missed. In a previous thread I spoke a little about how generally an institutional order works on the floor (http://www.elitetrader.com/vb/showt...=&threadid=2267 - hope I did that right). I think it's important to understand the big picture in order to profit from scalping, so let's start from the beginning…

What moves a stock price up and down? Easy - supply and demand. We all know that, and if we could just figure out when one was higher than the other, we would be successful traders. So where does this supply and demand come from? It comes from many different sources, but by far the most significant are the institutions. If you are a new trader do not be discouraged by some poster who quotes something like 'Yeah, I love taking some newbie's money'. That person clearly does not understand the mechanisms of the overall market. Whenever you buy or sell any stock, chances are there was an institution on the other side of that trade, not another daytrader. But don't worry about that - institutions come in all shapes and sizes, and are as wrong as often as we are. So in order to make money, we need to figure out when a good size institutional order is out there buying or selling. We have two tools to figure this out: The tape (which shows us the past - what has traded) and the specialist (who shows us the present - what the changing current market is). Which is more important? In my opinion it's the tape. The tape doesn't lie. Specialists can. But don't discount the specialist; he's going to determine your entry and exit points

I. Think Like an Institution


Like everything else in life, we tend to see things in our own image, and we try to explain things by using our own motivations. Trading as if everyone out there was a daytrader can be a costly mistake. If the market is an ocean, being tiny little fish, we are better off feeding off the scraps of larger fish than going head to head with other tiny fish. So what is the motivation of the institution? Obviously to make money, but not like us. An institution is not buying 1,000,000 shares of ANN to sell it back .25 cents higher. Most of their buy/sell decisions are based on fundamental analysis. Nowadays there are quite a few hedge funds that I know of that base everything on technical analysis, but even they are looking for a few points gain at least. The point is this: How many times have you bought a stock after spotting a significant buyer, saw a little resistance and subsequently sold for a 25 cent profit, and then watched the stock go up another dollar or more throughout the day? It can be very frustrating. What you need to understand is that what is important to you may not be important to the institutional trader. Yes, you care about that 10 cents. On 1,000 shares that's $100. But to the institutional trader who needs to buy those 1,000,000 shares it does not matter. What? That's $100,000! Well not really - could I really buy 1,000,000 shares at one price? No, not unless I negotiated upstairs (read the other thread). But what if I could buy 10,000 ANN at $31.50, 25,000 at $31.70, or 50,000 at $32? What would I choose? If I had 1,000,000 shares to buy I would easily choose 50,000 at $32. Why? Because of the most important aspect of institutional trading: opportunity costs. By saving a few pennies but having less shares I have just cost the firm money (and thus the clients), if the anticipated result occurs. It is more important for the institutional trader to complete the order than to get the best price. Sounds incredible but it's true. Remember, with the exception of some hedge funds, money managers make their money from management fees and commissions, not performance. True, if your performance is really bad, you may lose some clients, but from what I've seen, just plain bad performance interestingly enough doesn't seem to have any harsh consequences.

-cont-


There is a poster here whose signature reads "Trade what you see, not what you think." That is my favorite quote. Did you ever see a perfect setup - the market is up, the sector is up, the tick is positive and even a ray of sunlight is shining on your enter key to transmit your buy order, only to watch the stock continuously drop from unrelenting pressure? Somebody must know something, right? Let me tell you a little story. One morning I went into the morning meeting as usual, where the futures were up strong and one important stock had beat the street with good numbers. One of our holdings was a much smaller company but in the same sector as the larger stock was. One of my bosses had called the CEO to discuss the ramifications of the day's news, only to be treated "rudely" by the secretary. One hour later I had instructions to sell all of our 1.2 million shares. By the end of the day the sector index was up 4%, the stock was down $2 (about 7%). Only now can I feel the pain of the poor daytrader who just couldn't understand why. Why is not important. I have many stories similar to the one above. If you only knew some of the reasons of why I have bought/sold tons of stock you would be in shock. If any of you watch Seinfeld, then just picture the character of George Steinbrenner running an investment firm. (Big Stein wants his calzone!) It was certainly an interesting period of my life…

What's my point? When there is heavy buying pressure you should be buying, and when there's heavy selling you should be selling. In my last firm, we managed about $2.2 billion in equity. On average, I would trade about 1.5 ~ 2 million shares of stock per day. There are tens of thousands of other institutions out there that are much bigger than that buying and selling all day long for a number of reasons that may never have occurred to you. I never once looked at a chart and said 'Hey, ANN is at its 50 day moving average, I think I'll stop buying it'. My head would be on display on the trading desk as a warning for all those who dare to go against Big Stein. I can honestly say that most days I went home not knowing whether the market closed up or down. It was never a factor. It only mattered on extreme days - i.e. if the Dow is down 200+ there's no need to step up on any buy orders. Actually it's very common. As a test we used to call the other traders on the street through the direct lines and say 'Quick - what's the market doing?' Almost always there was a long pause with the occasional ummmmm, and after they looked at their monitor we would get an answer. The most important numbers for an institutional trader are the high and low of the stock, and round dollar prices ($32, $33, etc) which act as "mental" barriers of support/resistance. As much as I love and believe in technical analysis it is important to see it for what it is; a tool to measure investor/trader sentiment. Over the long haul it probably works pretty well, but it can never know the urgency of today's institutional buyer/seller. For that information we only have the specialist and the tape.


II. The Specialist

What is the Specialist's motivation? Most of us see the Specialist as some evil guy who's sitting on a 10,000 share sell order, just waiting for us to buy a few hundred shares so he can fill us and immediately knock the stock down half a point. While it can feel like that at times, his primary goal is not to screw us. His primary goal is to maintain a fair and orderly market. That's his job. In doing so, if he happens to make money, all the better for him. In order to keep the market as fair as possible, the Specialist will work harder for the large institutional orders, for a few reasons. First, because the large orders dictate in which direction the stock will move. Next, because of the relationships on the floor. If I'm going to sell 1,000,000 shares of ANN, it's going to take me a few days, and I'm going to be on the phone with my floor broker who in turn will be dealing with the specialist during that time. Is the Specialist going to screw me on 5,000 shares just to make a few pennies, risking a bad relationship with the guys on the floor who have to tell their client the bad news? (Actually, some have done that before, but it's not the norm) As discussed in that older thread, the Specialist will always want to know from the floor broker if there's more stock behind it. The more he knows, the more he can act accordingly, and the more he can profit from it. He realizes that the institution does have power in the form of size. If he has 5,000 shares left of a 25,000 share sell order from me, and he prints the 5,000 down an inexcusable amount and buys the stock from me just to try to make a buck, I can stuff a few hundred thousand shares in the form of a market order (where he cannot get out of his position) down his throat and he will lose money. In the long run that type of behavior won't benefit the Specialist.

The Specialist makes money in two ways: when traders buy and sell the spread that he has created for the stock, and by buying and selling out of his own inventory when certain situations occur where he is almost certain that he will make money. Playing the spread is easy. The Specialist can trade in front of a limit order, so he can basically adjust his spread all day. He'll normally do this when there is little activity in the stock (like the Dead Zone) and an absence of institutional buyers/sellers.

The other way the Specialist makes money is by buying or selling the stock at specific times in order to profit from moves; much like us, but with a lot more certainty. This is an example of when a little knowledge can be dangerous. Once people learn this they start to assume that the Specialist was part of every decent size print that trades. Next they assume that the Specialist is a participant of every opening trade. This is simply not true. The Specialist is not a risk taker. He doesn't have to be. If the opening of the stock is uneventful, there is no need to participate. He does not know in which direction the market is going to go, so why take the risk? It is only on those special circumstances, where some form of news will affect the stock, when there will be a gap up or gap down, that the Specialist might be involved. And even then, there is no guarantee that the Specialist bought stock on that gap down. Remember, a Specialist sees all the order flow on that stock that morning, which includes cancelled sell orders because the price is getting too low, and cancelled buy orders when the opening price looks to be too high. We only see the opening price after the delayed opening on a large print. We don't know how many institutions "checked" him. Floor brokers will be constantly checking the Specialist and changing their orders and reporting back to their clients with the opening indications, which eventually are displayed on a news server (unfortunately delayed and usually inaccurate). The Specialist gets a good sense of where buyers might come in and where sellers will start to unload and is pretty sure of whether he will be able to profit from it or not.

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One final note on openings - when an institution is buying or selling a stock the trader does not give the whole order to the Specialist on the opening. If I had to sell 300,000 shares of ANN, I would only give 25,000 - 50,000 shares depending on how big the opening print was going to be, just to test the water. Then I would see which way the stock was trending, and act accordingly. Nobody is going to show his hand, and it is very rare for an institution to buy/sell their whole order on the opening print. The Specialist is very much aware of this fact, and that is why he is not always a part of the larger prints that go up later in the day. If I continuously feed 25,000 shares of ANN to the Specialist without telling him my size, do you think he will take a chance and buy any significant amount of stock at any time during the day just because the stock is lower? No, he'll keep asking the floor broker who keeps giving him the order if there's more behind it. It could take days. But when the order is finished, most traders won't care about letting the specialist know, and now he'll participate on the clean up print.

So how does this apply to "reading" the Specialist? It keeps the focus on what we really want to know: how the Specialist handles larger orders, not how the Specialist makes money for himself. The Specialist will always make money and unfortunately we can't use the same methods for ourselves. For those of you excited about the possibility of 'Open Book' on the NYSE forget it. Do you really think that an institution would give the Specialist a 200,000 share sell order if the whole world could see it? Or even 50,000 shares? No, the orders will just get smaller that's all.

So actually we're not looking for much, just a typical pattern that the Specialist continues to exhibit when working a large order. Lets say the Specialist in ANN receives an order to buy 50,000 shares at the market, and he doesn't have a natural seller. What is his normal process? Well, if you knew beforehand that he had this order, and then watched what happened it would be easier to see, but unfortunately you'll have to work backwards and try to figure things out which will certainly take much more time. How does he start? Usually he'll start by flashing a decent bid of about 5,000 shares. It's a strong bid, but not enough to scare anyone away. If he gets some nibbles, he might up the ante and show 10,000 shares. As a daytrader, we get excited when we see this, but we need to think like an institution. If I was an institutional seller of ANN, I'd be more likely to react to a real bid than a tiny bid. That's what the Specialist is looking for. But if he can't lure one in, he'll have to just pick away, which means buying at the offers (Not many small orders will feel the need to sell 500 shares into such a strong bid). So the stock moves up slightly as different offers are taken, but how does the Specialist handle this? If he's accumulated 5,000 shares already does he sit tight with a 5,000 share bid at the original level? Does he replace with bid with a higher 2,000 share bid? Does he remove the bid altogether to make it seem like there's no support? You may have been watching the stock for the last hour, but will every trader catch that? Making the stock look weak is a common strategy. Instead of dropping the bid, it's actually more effective sometimes to show a weak bid, of say one or two hundred shares, as well as a strong offer one cent above it making it look like the stock is ready to fall. Not a bad way to attract sellers. Does the Specialist in your stock do this? How many times? What happened when sellers took out the weak bid? Where was the next bid? Where was stock being printed? Was it 5 cents below the weak bid? 10 cents? Some specialists will use the same amount every time. And unless the stock has just run up a lot already, he won't let the stock fall too much - remember his primary goal is to fill the order, not to get too cute about it's execution. He's still got more stock to buy, so he'll take all those panic sell orders and execute them at the same price. Eventually if there's no supply, the stock will move up. Does the Specialist use another 5,000 share bid, but up higher? Kind of obvious, huh? How about 3,400 shares - looks more like a stray order. Another 10,000 shares accumulated, time for the old 'weak bid' trick again. You get the point. The key is watching, and I mean really paying attention to what is going on so that you can get a good idea of the behavior of the Specialist when he has a large buyer and no sellers (or vice-versa). This could take an extremely long time, but could be well worth the effort.

One last thing - some Specialists trade more than one stock (not the really big ones), and at times, their attention may be drawn to another situation. Sometimes they are out sick or on vacation (or out to lunch). Sometimes an institutional trader will tell them exactly what they want them to do as far as showing bids/offers that may make no sense to us watching the stock. It happens, and there's nothing we can do to change that. Just try to stick with what usually happens, not what happened last.





II. Tape Reading


Interpreting the tape can seem very difficult and overwhelming at times, but it gets a little easier with practice. The key is not trying to interpret every trade that is printed, but rather to look for and identify situations that indicate a large or aggressive buyer/seller. We don't need to know about the small orders that are being traded back and forth all day - they can occur for a variety of reasons (retail orders, etc.), none of which concern us. So, what are we looking for?

Momentum. Is the stock moving up or down? If it's moving up I'll bet you that prints are going off at the offer. If it's going down then prints are going off at the bid price. That's the most basic and important rule of tape reading. How many times have you seen a bid get hit and then saw the bid step up to a higher level, only to get hit again, and then move to a higher level? Doesn't make much sense. When bids get tapped they go lower. In order to gauge momentum we need to look at the prints on the tape and the stock price, not the Specialist. What if the market in ANN is being shown as 10,000 bid at $31.60 and 1,000 offered at $31.70. Which way is the momentum? If nothing has traded then there is no momentum. However, if three trades of 1,000 shares each go off at $31.60, then the short-term momentum is down, even if the bid amount is greater than the offer amount. Is that enough information for us to make an informed decision of shorting the stock? Of course not, but it's a start. It's telling us that the sellers have a greater sense of urgency than the buyers at this time. I know this is really basic but it really is the key to profiting off stock momentum (NYSE or NASDAQ).

Once you've got that down you're ready to look for some institutional buyers/sellers. The first and easiest thing to spot is big size on a bid, taking out offers and stepping up on the bid. That clearly represents an aggressive buyer, as well as a market order. You'll have to be quick though, because everyone else is seeing what you're seeing, and when the momentum starts to die down, and the bid is down to a few thousand shares, there will be a quick pull back. How much and how quick depends on how fast and severe the stock just moved up. Obviously this works on the downside as well, but to capitalize from it you'll need bullets because you probably won't get any upticks to enable you to get your short off.

The next is when a large offer that has been sitting at one price for a while gets taken out (the larger the better). That shows that the buyers were willing to step up and pay the offer for size. It also breaks a mental "barrier" and buyers tend to feel there may not be any more supply left and scramble to buy whatever they can, and thus the stock moves up. Eventually it will get to another level where supply comes out and the process starts all over again. Since this technique is pretty much known buy everyone you may have to take more of a risk and wait until there are only a few thousand shares left on the offer and buy your stock. By jumping the gun, you risk the occurrence of the offer being refreshed by another large offer, but it guarantees that you won't miss any moves if the stock takes off. Again, this also works the same on the downside.

Another thing to look for are the double prints (my favorite). I went into detail about this in that older post, so please see that thread I referred to on the first page. This can be a very useful tool. Two buyers of 10,000 shares each are stronger than one seller of 20,000 shares. The fear that another buyer is out there whose size and intent you don't know will definitely motivate you to buy your stock faster and with less care as to execution.

The next thing to focus on are the larger prints. When a stock on the NYSE makes a move in a specific direction and is subsequently followed by a large print at the end of the move, it tends to signal a reversal (at least for the short term). Why? If I'm selling 100,000 shares of ANN and I knock the stock down 50 cents, while selling 35,000 shares, I'll be willing to sell the rest at a lower price if I can do it. Eventually the stock will find a level that will generate some buying interest. If I'm the buyer, then I'm in the driver's seat because I can produce a discount bid. If I'm the seller, I'm more likely to capitulate and sell the rest of my stock at one price. So if I can sell 65,000 down another 30 cents, I'll do it. But now my order is finished (for the moment at least - institutional traders tend to take a break after a significant piece trades to "let the dust settle") and the stock is at a level that has generated buying interest. The print goes up, the spread widens, and before you know it, the bids start stepping up for fear of missing a golden opportunity. If you're quick enough, you can profit from the short-term panic move. But what comes next is the most important. After the stock retraces a bit, if another large offer appears and does not get hit, this is where you cover your long and go short. The seller is back, and from the tape you know that he has sold at a lower price. He will have no problem doing it again. If this sounds new to you don't be impressed: you've seen it before. Where? On any intraday chart. The stock makes a decent move in one direction, retraces a bit, (you were taught to buy/sell at this point) and then continues in the original direction. It's the same thing, but now your info comes in the form of the tape instead of a chart.

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One thing I want to add is to be careful on playing the first move when a large print occurs at the high of the stock. Yes it often works well enough, but not as well as on the downside. The reason is this: Buyers are stronger than sellers. A buyer can always walk away, whereas a seller cannot. That is why stocks go down faster and harder than they go up. That is why most negotiated large prints are executed at a discount and not a premium. Most buyers will not pay a premium on a large print if it is the end of their order. They will however pay up to get some stock under their belt (remember to think like an institution), in case the stock moves even higher. Once that "high" print goes off, the specialist will usually not let the price fall too much too soon to avoid embarrassing the buyer, and believe me, the buyer will be pissed if he tells his PM that he just bought 50,000 shares at $31.90 and a minute later the stock is at $31.50.

One thing that can be read from the tape but is easier to see on an intraday chart is consolidation. On the tape there may be a battle between a buyer and a seller or there may be just inactivity. If you watch the tape during this time you will start to take notice of the key support and resistance levels. Eventually either the buyer or seller will finish the order, and there will be a lack of supply or demand. Key levels will be broken and that is your cue to go along for the ride. It may be boring to watch, but by watching the tape you may have a better chance of spotting real breakouts/breakdowns by looking at the size traded as opposed to the price where it traded (chart method).

Another thing I have not mentioned yet is spotting market orders. Market orders are very important in getting a stock to move in a specific direction. A large limit order can give you support in case the stock doesn't move, but isn't going to help you in making money. So how can you tell? Well aside from the obvious large bid stepping up pattern, you can't know for sure. But when I used limits as an institutional trader, they were always significant price levels - $32, $31.75, $31.50, etc.. I wouldn't give an order to buy 25,000 ANN using a $31.46 top. So when you see larger bids/offers at an odd price, they probably have room.

What else can you look for? What happens when you see a spread like this: 3,000 bid at $31.50 and 1,000 offered at $31.60, and a few prints of 1,000 shares go off at $31.59. Shouldn't they go off at $31.60? What just happened? It could be a couple of things. The first is that the Specialist jumped in front of a limit order to sell from his own inventory, because he knows that there is a large supply right above. Or, the Specialist could be working a large sell order with a lower limit (or a market order) but does not want the offer to be taken out. Or it could even be that a sell order of 3,000 shares came in with a limit of $31.59 at that exact moment (yeah, I know, but it could happen). Either way it doesn't matter why, because all of the reasons are bearish, not bullish. You've got buying momentum but too much supply, so if I was long stock, now is when I would pay very close attention to when the buying stops and the momentum reverses.

When you start to trade larger sizes you will also be able to "test" the specialist. When supply runs out the Specialist will often try to keep a lid on the stock by offering a few hundred shares a few cents away from the bid. If you want to know if it's a real seller, you can buy just a hundred shares. If the ask changes from say 400 shares to 300 shares it's probably a real seller. But if it was the Specialist, you'll get your 100 shares at that price, but the rest of the offer will often just disappear. You can also try a different approach; you can join him at the offer with a hundred shares. If you see 400 shares offered at $31.80 and you enter an order to sell 100 shares at that price and the amount then shows 500, chances are it's a real seller. But if it's the Specialist, chances are it will show 500 shares for a split second, and then you'll be all alone with 100 shares offered at $31.80. Cancel it quickly and you might get a glimpse of the real market.

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I really think the best way to practice reading the tape is to pick a small/mid cap stock that trades about 200,000 - 400,000 shares a day and watch it for a week. Yes, it will get boring, but keep a piece of paper in front of you and take notes. Not only should you paper trade, but also write down your concerns, ideas, and questions about the stock and the overall market and it's effect on the stock. Your questions will be answered later by watching how the stock trades. On the first day you'll probably want to buy every time the bid is bigger than the ask (and vice-versa) and by paying the spread you'll find that at the end of the day you would have lost money. When you start to get the hang of momentum, your shooting percentage will increase because you'll be able to better filter out the noise. Next start trading 100 shares because honestly, execution is everything when trading. Great ideas that would have worked don't pay the bills. The more size you trade, the harder it will be (% wise) to make money from scalping so I think it's important to prove yourself on 100 shares first.

What I have just written is by no means some "secret" formula to instant wealth. It's just a simple guide of perhaps how to get started in the right direction, in case you're having trouble finding anyone willing to share any ideas on this topic. I am continuously learning everyday and am always eager to learn from anyone else who has any tips/techniques to offer me. Happy trading!

IMO Open Book is just another way for the exchange to make an extra buck. In theory, it sounds like a useful tool, but to whom does it really benefit? The institutions don't need it: they already know where the real size is by talking to the floor brokers and Specialist directly. Besides, their goal is not to make a quick 25 cents off order flow. It seems like it might be useful to a daytrader, until you realize that no institution is going to give a size order to the Specialist and have him put it on the book. So if anything, I believe that Open Book will more often than not lead a daytrader to make a wrong decision if he bases it on the info he gets from it (Not to mention that it's delayed info). And it won't do anything for the Specialist, unless he uses it to fake out other traders. Remember, if he's working a huge market order, he can put any part of that order on the book and then remove it, which makes Open Book a rather useless tool for a daytrader. Just my opinion though…