Updated: Sep 20, 2022
In today's newsletter, I am going to be covering how one single choice, one action, or one decision can affect your future...
It's a phenomenon known as the 'Domino Effect.''
What is the Domino Effect?
The Domino Effect states that when you make a change to one behaviour it will activate a chain reaction and cause a shift in related behaviours as well.
A domino effect or chain reaction is the cumulative effect produced when one event sets off a chain of similar events.
There are 2 Types Of Domino Effect
A Positive Effect
The first way a domino effect can work is it can create positive momentum and this can be in anything and in all areas of life, not just trading, for example, let's take going to the gym
This gives you more energy > More focused > Sleep better > This leads to better work results.
Even though you may never have planned it. Just by going to the gym, you created a positive domino effect that helps other areas in your life.
Now let's look even deeper into this, by going to the gym you teach your family about health which leads them to live healthier and fulfilled lives and then your children's children learn from them the same health benefits which impact their lives, and boom that one domino you decided on has created a whole generational effect.
This is the power of the domino effect.
A Negative Effect
And at the other side of the spectrum is the negative cycle which creates negative momentum
Let's use an example you have a habit of checking your phone constantly
Check phone > Lose time > Miss important tasks > Become upset > Stressed
As you can see our behaviours are interconnected, one simple thing you don't notice right now can have a great impact later down the line.
The Rules Of The Domino Effect
Every single action creates an effect
It can be a positive or negative outcome
You can choose what domino effect you want to create
The main takeaway from this is that it is in your power, it's a choice!
How It Works In Trading
In trading, you design a trading plan with rules and steps and when you follow this process it creates a domino effect that leads to positive outcomes in the long run but when you don't follow these steps it can create a domino effect to the negative side of the spectrum which can lead to minor setbacks or even fatal ones.
On the psychological side, every step is a domino and as each tiny domino falls, you start believing new things about yourself and building identity-based habits whether positive or negative. If you want to learn how to create positive mindset shifts I go deeper into it in my book 'The Blueprint To Trading Psychology.'
Each decision you make every day was a domino. Every decision you make helps either positively or negatively build momentum in the direction of that single choice.
The power of the domino effect is happening every time you act or make a decision in trading...
How to use it?
You first need a goal, when you have an actual goal you can then create steps and systems in place to get to said goal.
And with this, you will know that every time you follow the process and steps in place you are now actually creating a positive domino effect, and this now also gives you awareness of any negative domino effects if you don't follow the steps.
And that's the key understanding that every single action you take can have a domino effect and can be a great motivator to the right thing.
The key to using it now is asking yourself every single time you make a decision in your trading no matter how small or big it may be you need to ask yourself...
'What will be the domino effect of this decision?''
Play it out in your mind and see how this single decision can affect your trading. See how it creates the next domino and the next etc.
The more you do this exercise the higher the chance you will start to make sure you are leaning more towards the positive end of the spectrum.
For example, if you are about to break a rule that can lead to a negative domino effect you stop for a moment and begin visualizing all your future pain, frustration, disappointments, and anger from this one moment it will act as a strong motivator to do the right thing in that particular moment.
It's simple but powerful...
The domino effect is an amazing thing that can be utilized to hit the goals you want in trading or life.
And the power first comes from being aware of the fact that this effect is constantly in motion and is happening all the time. If you are in a negative cycle right now, stop and create the positive steps and habits that will help you to your goals.
Enjoy your Saturday.
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