There are as many ways to make money in the markets as there are people participating in the markets.

• Many of these methods of contradictory. The environment changes and advantages get arbitraged away.
• Negative advice > positive advice.

But there are relatively few ways to lose money in the markets.

• Psychological factors almost always more important than errors in analysis
• Key: avoid psychological errors using simple framework

Seeing life situations as a game

• College, Army, etc.
• The rules are set and you simply play by the rules. But always know that the rules are somewhat arbitrary and don't take them too seriously.
• Sometimes, you can take risks by breaking the rules. But be prepared to accept the consequences.
• If you enjoy a string of success, be careful. You might have just gotten lucky. Don't personalize your success/failures too much.
  • You can control the process, but you cannot necessarily control the outcome.
• "From my trading and gambling experiences I have learned that the more the markets are treated as a game, the less likely you are to have losses due to psychological factors. Why? Games have rules and defined ending points. Their participants have a game plan."

Discrete events (e.g., games) vs continuous processes (e.g., markets)

• Games are discrete because they have a defined end point
• Markets can keep going...

External Loss vs Internal Loss