Rande Howell

gosu My intent is to help some traders build psychological skills necessary for their trading. It is not to seek approval from someone. I asked zdo to moderate a forum because feedback in the past from this particular course indicated that having a forum to discuss would help integrate the work. zdo over time has also proven level headed and genuinely motivated to help others learn -- and not appear as an overlord. These traits seem appropriate for a moderator. And zdo graciously accepted my invitation. His acceptance allows me to leverage my time more effectively. You are welcome to apply for the scholarship, or you could register at the course price. You could bring your opinions to the forum on TL like every other trader. If you are a trader who wants the opportunity to engage this work and learn, then please apply. Then, people of all levels of trading will have the opportunity to assess the value of Developing Traders State of Mind. And walk away with something intended as a gift. Rande Howell

This is kinda like Nancy Reagan's campaign for drug avoidance in the 1980's -- Just Say NO. The problem with this approach is that it doesn't work, though it sounds like it is good advice. Deeply embedded perceptual maps just don't respond to logical problem solving. Changing a habituated engrained emotional pattern that has proven successful requires much more than good sounding advice for change to occur. Many people read trader psychology books , or advice like this, till they can quote them and talk the talk. They know what the mindset is supposed to look like, but they keep their inconsistent ways. But they can't walk the walk based on their performance. They don't understand HOW to change their current perception into an effective mindset for trading. This is what this article addresses. Rande Howell

It's accurate for sure. Rande Howell www.tradersstateofmind.com

Self soothing is an element of compassion. Self compassion is the antidote to anger at self or fear (assuming the object of threat is not a biological threat to life and is psychological discomfort). This is why beating the self up after a mistake or loss is counter productive. It does not open us to learning to respond differently. Directing compassion toward the self after a mistake or loss occurs opens the ability of learning beyond the comfort zone that got you in the trouble in the first place. In this vignette David learned during his formlative period to be in control or face chaos. Years later in a trade, he experiences the potential of chaos (losing) and is historically triggered right back into the learned repetoire of perception. In the here and now, he learns to counter act this response to fear by bringing self compassion to the part of himself that had to be in control. And he recognizes that once he is in a trade, he is not in control of what the markets are going to do. This is where compassion is able to calm his fear so that he becomes capable of acting from a higher organization of self. Compassion soothes the fear so that he can act, not from the fear of loss of control, but from the impartiality that allows him to think and act from his trading plan -- which is more about vigilance and defense rather than the offensive nature so natural to him. This is called Emotional Intelligence. Rande Howell www.tradersstateofmind.com

The potential of our humanness is enormous. Fear tends to be the factor that most limits our capacity to change. Self compassion is a necessary tool for reinvention of the self. Some people are simply born with a disposition suitable for trading. Some grow up in families where risk evaluation is encouraged.. Jan Arps is such a guy as is his son Hawk. When they trade, there is a natural imparitiality. Most don't come equipped off the shelf with this temperment. It has to be developed. Fortunately there is ample proor that the traits needed to trade consistently can be taught. First stop is emotional regulation. Unless fear is managed, your potential stays locked up. Rande Howell www.tradersstateofmind.com

Dave is actually a client of mine with a different name. And I lifted material from my notes to write this article. I change names for protection of client's privacy. Dont think he'd like his laundry spread out for the TL crowd to pontificate about. Self soothing is a term I use for self compassion. The emotional state of compassion is the emotion that actually teases apart fear based self limiting beliefs so that the belief (also about self) can be reconstructed into a higher functioning belief. As an example, consider what happens when things go wrong in a trade. You'll notice that most traders beat themselves up whenever they make a mistake or are on the wrong side of probability in a trade. It is this "beating self up" that keeps the self limiting belief in persistance. The more you beat yourself up, the more embedded the belief pattern is. Self compassion, self soothing, mollifies the fear so that the meaning that has fused to the fear can be changed. It's a very unique emotion in its capacity to change beliefs. In the Christian Bible you will notice that Jesus is moved by compassion when he performs miricles (changes the person's self beliefs). Nelson Mandela used compassion as a tool to change aparteid. Compassion is strong stuff in the hands of a skilled practitioner. In the same way that fear is inherent to the human condition, so is self compassion. It's a matter of emotionally regulating the fear and intentionally seeing through the eyes of self soothing, discipline, courage, and impartiality -- which are also inherent to the human condition. It's a matter of the intentionality that you can consciously bring to the trading mind. What was remarkable about David is that his belief system was not rigid as most Type A's are. Men tend to be stubbornly resistant to any thing beyond their current comfort zone. Most pretend that they can "leave their emotions at the door". And there is a hard edge about this group. The truth is that as long as you are alive, emotions will guide thinking. Thinking and emotions simply are not separate from one another. If you buy into this assumption, it becomes vital that the trader become emotionally intelligent and intentional in their use. Not just in trading, but in the rest of your life. Rande Howell www.tradersstateofmind.com

by Rande Howell www.tradersstateofmind.com David had never known fear he could not conquer before now. Both as a competitive karate champion and a business man, he had controlled his fears - not allowing them to get in the way of victory. David was a very successful, "large-and-in-charge" executive. There was no mountain he could not climb and no situation he could not conquer. By sheer will power and a commanding presence, he could set a goal and make it happen. And he had the success to prove it. He had sold his business, and, with a large amount of cash he was ready to attack his next venture -- trading. He believed that all he had to do was to learn a methodology and he was ready to take on trading. In his mind, trading was just another challenge to master. Three years later, he had hit a brick wall. He was not losing much, but he was not winning either. Instead, David was losing his nerve once he entered a trade. After entry, he often became so frazzled with a trade initially bouncing around that he lost his nerve and would bail out on a trade before it could refresh. This aspect of the uncertainty, so common to the trading world, was an alien concept to him. He had always been able to conquer doubt. By sheer will, he had forced his way to success. But trading was a very different world, with different rules, than the world he knew. David saw the handwriting on the wall. It was time to re-tool his skills. A Need to Control Uncertainty David’s problem is that he has been successful in other domains of performance. He is so comfortable with his belief system (which had, after all, produced success in one area of his life) that he is now oblivious to what produces success in trading – particular managing uncertainty. And it is a problem rooted in both his biology and psychology. David’s brain, like any brain, is going to avoid chaos or uncertainty and will organize the mind to seek certainty as a way of ensuring survival. This is called adaptation. Once the brain locks in on a successful strategy for creating certainty in a world of uncertainty, it habituates the solution in a self-fulfilling pattern. These hard-wired patterns become our beliefs from which our psychology arises. Listen to David as he explains his Type A Personality: “My wife calls me a control freak. And I do need to control things. For my entire life I have felt that I have to be in control. And this attitude worked. I thought it was me, but I have learned that this need to control was the way my brain adapted my sense of self to the circumstances of my life. When I was growing up, I had to be in control. After my parents divorced, I lived with my mother and we were hard pressed to keep a roof over our heads. Mom worked three jobs and I was in charge of the house, and my sister, by the time I was eight years old. If I had not been in control, things would have fallen apart. And that was not going to happen. It’s these very traits that formed me. When I left home, it was just natural for me to be in control and to run things. I had a gut sense of how to manage and overcome challenges. This served me well until I began to trade.” Biology Meets Psychology of Trading David's brain adapted him to successfully negotiate the difficult circumstances of his formative period. This adaptation of self, his predisposition, was a perfect set-up to become a successful executive and businessman. His control-centered Type A Personality had served him well in business and competitive sports. Here’s the glitch, though. The pattern-producing brain, always biased toward creating the feeling of certainty, had created pre-conditions that were counter-productive in the world of trading. In trading, there is no controlling uncertainty by using sheer willpower. Rather, a successful trading psychology is built around the management of uncertainty – not its control. To become success in the domain of trading, David (and all traders) must build a new psychology where uncertainty is at first tolerated and later managed. Because your brain is mandated to create a feeling of certainty out of the uncertainty of life, a trader will have to build a new psychology intentionally. Your brain was never built for trading where the trader understands that he cannot control the outcome of the markets – he can only control how he responds to the market’s action. This is where there is a great divide - between the pre-disposition of our brain’s desire for certainty and our mind’s need to manage ambiguity. David developed his psychology by being born into a particular history and adapting to it successfully. The brain will always lock in this success as self-fulfilling pattern. It then becomes the way our mind perceives the world. For traders who refuse to change the way they perceive ambiguity, they will always fear uncertainty. This is David’s dilemma – giving up the illusion of control. His Type A Personality has been a very successful adaptation – so it is hardwired into his neuro-circuitry as a self-belief. Yet this belief that the outside world can be controlled and made to conform to your vision does not work in trading in the markets. Trading requires a very different emotional and mental disposition. It requires that you develop a mindset that allows you to take what the markets are willing to give you. Reconstructing a Mindset David is in the process of re-tooling his mindset. He is moving away from trying to control events (so successful in his previous career) and embracing a mindset built to manage uncertainty. What he has come face to face with is his fear of uncertainty. He calls this, “the glitters”. The environmental pressure he grew up in was all about controlling the potential of chaos to destroy his mother’s home. Later, as it became the shaper of his psychology, it evolved into a generalized need to have the power to force things to go his way. It is this fear of uncertainty, and the way a trader deals with ambiguity, that has to be re-understood so that a more effective mindset can be developed for trading. As David embraced emotional regulation training, here is what he is now saying: “Focusing on my breath during my trading the last few days has definitely helped me keep my wits about me, but I can certainly feel the fear response trying to take over so I know I have lots of work to do! I see that when I enter a trade, I am no longer in control. I can’t make it do what I want. I am seeing my need to control comes from how I learned to manage uncertainty. Once I experienced uncertainty, it was a short ride to my fear of loss of control. I can interrupt the pattern from taking control of me now. But I’m a long way from being comfortable with not having control over external events. What I am learning is that I can have control over how I respond to the uncertainty of not being in control. Once you’re in the trade, it requires a different mindset.” Learning to interrupt the arousal of anxiety by breathing and relaxation, David is now acknowledging the honest fear behind his need to control. With his biology of fear calmed down, he is learning to soothe his fear rather than push it away. He no longer is beating himself up when he triggers to fear. He is recognizing that he is simply bringing his learned dispositions that have been on automatic into his trading. Now when these pre-conditions trigger, he has the opportunity to re-train them. He is learning both on a psychological level and a biological level that fear, like risk, is to be managed, not controlled. He watches for the tell-tale signs of an emotional hijacking – eyes bulging, tense muscles, breath held, and a clinched fist. He interrupts this bio-emotional arousal before his mind is hijacked. He then soothes his fears by talking himself down. And he acknowledges that, once he enters the trade and takes off a chunk of the risk at the first ping, he is not in control anymore. He had control until he pulled the trigger. Now his job is to manage his reaction to uncertainty. But my staying calm, his mind is no longer being overwhelmed by fear when he does not have control of outcome. He takes on the mindset of a defensive coordinator rather than an offensive coordinator – which is far more comfortable. He is learning to shift psychological gears from the kind of mindset that evaluates set ups that give him an edge to a mindset that manages the emotional turbulence that can come when capital is actually at risk. In the first mindset, discipline and impartiality are needed to spot the opportunity and to act on it. In the second mindset of managing the trade once capital is committed, a heavy dose of self-soothing is required to keep the uncertainty of managing the risk from snowballing into fear or panic. This is the intersection where trading, biology, and trained psychology meet. It did not come natural for David, self admitted Type A control freak that he is. But, as he discovered, he is trainable. The skill sets he learned included emotional regulation, mindfulness, and internal dialog management. He also had to re-discover and develop a self-soothing aspect of himself that he had never used before. He discovered that self-soothing was a powerful internal strength that every trader needed to develop to keep his mind thinking clearly during the ambiguous times of riding the trade. By learning how to do this, his trading is far less stressful and more profitable now.

I get that alot. I really don't know much about the process he uses. Fundamentally, my position is that psychological learning and change occurs when the neuro-circuitry, the biology of the brain, is re-wired into new patterns of perception. Until that happens, change may be sweet, but it is short term. Kinda like diets. People can lose weight short term, but they gain it back because they don't do the work of changing belief and adaptation to stress at the neural pathway level. If this element is not accounted for in a change process, the old ways will widdle themselves back into the performance psychology of the person. There is no AHA MOMENT and life changes for ever. There is a moment of possibility for change that has to be make into a habit. And that new habit has to be practiced just like any other skill set. That's the work of long term change. You're in Chicago. I'd love to have the opportunity of meeting you. I will be speaking at the Options Industry Council's seminar in Chacago on October 22. I see you're into Emini's and don't know if you trade and teach options. But if your coming to the event, would love to meet you and see how we might work together. Rande Howell www.tradersstateofmind.com

zdo Thanks for asking. The rumors of my demise are premature. To tell you the truth, I simply haven't found much that I could contribute to for awhile on TL. The conversations in the Trader Psychology section did not seem focused on the psychological aspects of trading. Writing and speaking schedule, clients, webinars, and building affiliations have keep me busy. Lots of solid feeback on the book. I'll added a section on Memory Enrichment in the ebook as a tool for developing the internal resources of the trader. I have found that it is a more effective way for traders to build strength and manage emotional state rather than the symbolic representation I've used in the past. Together, they help build a mental model for peak performance that is easier to grasp and learn. I'll be speaking in Chicago in October, Wall St and Las Vegas in November, and Charlotte, NC in December - so I'm going to traveling a bit. Would you be interested in attending my 4 session webinar course for free? Let me know. I have a couple of scholarships available. By the way, I looked at the study about psychopaths and traders. I have found that there is a vast difference from Wall St types and the folks who actively trade for themselves. The traders in this market tend to be decent people trying to build a life for themselves and their families. Very different than what is found in a trading room on Wall St. Rande Howell

What is described here is external discipline - an essential element in trading. And it is good advice - if a person could only snap their fingers and change their beliefs when engaged with uncertainty, most traders I know would be successful. To make external discipline work, internal discipline has to be built into the psychology of the person -- if they did not come equipped with it as standard psychological issue at birth. It is the triggering of uncertainty morphing into fear that creates the irrational thinking that keeps people stuck in self limiting trading patterns (like dealing impartially with their stops). Until this element is resolved, external discipline by itself will be undone by learned patterns of fear being exposed in the process of trading. This also tends to be one of the last things that a trader is willing to do. Rande Howell

Taming the Furies Disrupting Fear and Calming the Mind “I don’t get it. I know how to trade,” explains Brian, “I’ve been trading for 9 years and I can’t seem to break through this barrier to really successful trading. Something is holding me back, and I don’t know what it is. I see a pattern though. I see the set up. I see its potential. But I’m tough on the price I’m willing to pay to get into a trade. I’m determined to buy at a price that will limit my losses. The problem is that often my buy order just sits there not getting filled as I watch the price climb. I realize that I could have bought at a higher price point and still made good money, but I want to limit my losses first. What I’m beginning to see is that by focusing on loss abatement, I’m not really practicing risk management. Both the potential and probability for a winning trade is there. But I shut myself out of the trade because I assess from a negative expectation (contain loss) rather than risk capital on the probability of a successful trade. It may seem like a subtle distinction, but now I see that is what has kept me from achieving my potential in trading for nearly a decade. I’ve tried various training program about how to change my beliefs, and I’ve tried to click my heels and snap my fingers, but they don’t seem to work for me. How do I get beyond this mindset?” The Brain, the Mind, and the Market Collide Brian, like many traders, does not understand how to change deeply ingrained patterns of perception and behavior. He assumes that changing beliefs is a mechanical process where he can take a part off and put a new one on. His assumption about change is highly inaccurate. Until he grasps how to disrupt the biology of pattern, attempting to change his beliefs and thoughts will accomplish short term results that fade over time. And the old historical pattern will reclaim perception. This is the same reason why diets do not work. Most diets (and dieters) attempt to change behavior from the outside. This only changes the surface. The dieter, in the attempt to change appearance, remains blind to his self limiting core beliefs of which over-eating is only a symptom – not the problem. Let’s take a look at what Brian does not understand about the biology of pattern and belief that limits his potential as a trader. He is trying to understand the market when he does not understand some fundamental aspects about himself. This is the piece about changing beliefs long term that nearly all traders miss. Before moving to the market, let’s make sure you know what the default position is for your brain and your mind regarding the market. Your brain evolved over eons of time to be a pattern recognition machine. With survival as an adaptive stressor, it also evolved to negatively assess situations as a default position. So it is a pattern recognition machine as well as a negative assessment machine. That is the biological predisposition that you bring into trading just because you have a brain and body to preserve. You have an uphill struggle for re-training your biology to right this situation for successful trading. This subtle difference can be seen in Brian’s discovery. Despite knowing how to trade, the fundamental assumption he makes is focused on “not losing, or minimizing loss” rather than maximizing the probability of success. Because his mindset is locked on this position, Brian cannot “see” another world of risk management in which consistently successful traders operate. There is a biological bias, which has become a psychological limitation, and which Brian will need to correct in order for him to move to the next level. As a pattern recognition and pattern creating machine, your brain’s job is to discover pattern and build structure around that pattern so that chaos is avoided (same thing you attempt to do in trading). Like a singular cell biological system organizing itself so that the chaos outside the cell wall will not destroy the engine of life within the cell, so also do very complicated biological systems (such as “you”) organize themselves. Your brain organizes you into contained structures (called comfort zones or perceptual maps), both biologically and psychologically, to avoid intrusion of the uncertainty of the world in which you exist. The problem is that in trading you have to embrace the uncertainty of the market. And instead of trying to control the market, you have to learn how to control yourself. To master the market, you will have to conquer yourself. Like your biology organizing itself to survive in a larger eco-system that can and will be threatening, you build a psychology primarily invested in avoiding dangerous elements in your environment that could disrupt the structural integrity of the organization of the self called “you”. Have you noticed how unsuccessful this strategy is when used in trading? Like Brian, you try to avoid threat to integrity (loss), rather than manage risk for probable outcomes. As humans in a quest for certainty in a world of uncertainty, we have closed ourselves off from the inherent dangers in the natural world. We build and live in houses where we control who and what we allow in the front door; we control the weather; we control our food, and so much more. It would seem that we have created the conditions of certainty where uncertainty used to prevail. We have the illusion of control. Then life throws us a curve ball for which we are unprepared or we live lives devoid of adventure and meaning. Both are undesirable. In the first case, we are thrown into chaos. We are surprised because we have been following the rules under the assumption that they will lead to certainty. Faced with uncertainty, we either re-examine our beliefs and position and begin to create a new life – or we stay stuck insisting that our rules should work. Or we begin to seek adventure and meaning that throws us back to grapple with uncertainty and risk. The key is whether we have the skills to manage risk and uncertainty. If we do, we embrace probability and organize ourselves for the adventure to achieve that potential. If we do not develop the skills, we continue to crave certainty so we can prevent loss. And we forfeit our potential just as Brian is doing in the vignette above. Brian’s performances in trading kept crashing him up against the rules of his sense of certainty. Because he was so far removed from the uncertainty of the natural world that contains an element of chaos, his beliefs about how to interact with the forces of life seemed to work. He had achieved a false sense of certainty in his man-made world. Then he started trading and discovered that the world of trading did not follow his carefully orchestrated belief systems of loss containment. The market he encountered defied certainty. To protect himself from this uncertainty, he screwed down the conditions on his buy prices so that he could contain his losses. This protective behavior continued until he ratcheted down his potential for loss – only to find he also closed the probability of profit. What was he missing? Rande Howell

by Rande Howell www.tradersstateofmind.com Matt had been here before. On paper his trading was methodical – just like he had learned. He had done his review. He knew what he was looking for. He knew his symbols, entry points, stops, and targets. He knew what to expect in a good set up. He had all the ingredients needed for disciplined trading. He was confident as he pulled the trigger at the entry point. Everything was under control until the trade started going against him. Then, without warning, trading starting playing with his mind and he got sucked into a vicious cycle. Logically he knew that this was probably a micro trend and he needed to be patient so the trade could refresh. Moments, in his hyper-vigilant mind, stretched into an eternity. Pressure was building. Finally he was riding the trend, but now his discipline had eroded. Itching to take a profit after his turbulent ride, he saw a chance to take a small profit and get out of the trade before it went against him again. He took it. Relief coursed through his body and mind for a moment. No longer consumed by the fear of loss, his thinking again became objective. Then, it was déjà vu all over again. He had been here before. And he had done the same stupid thing. Out of his fear, he had taken profit early and had missed his target (and, by the way, the trade hit). The Challenge of Mental Discipline Many traders experience a similar real-time breakdown in discipline in their trading with similar results. It could be at different critical moments in a trade, but the results are the same. Fear or impulse overwhelms discipline in the trader’s mind when he engages the uncertainty of risk. This is the hurdle that separates most traders from the potential they know is possible in their trading – and their actual performance. Most traders engage the process of trading with an unexamined set of beliefs about the management of uncertainty. Until they really begin to peel back the layers of their own fears, they believe that discipline is found primarily in methodology and platform. This is external discipline. Though necessary, it is not enough. It gives the trader a false sense of safety that something outside of the self could control risk and create a sense of certainty. What they do not examine is how internal hardwired beliefs, embedded in their brain, take over their trading mind when danger is perceived and this hijacks rational thinking no matter how proficient they are in their methodology. Both external and internal discipline is required for proficient trading. They are not the same. Like in the case example cited above, your brain, your emotions, and your mind (until re-trained) are most likely going to conspire against you in trading. This is why internal discipline has to be developed. No matter how well you know how to trade, how long you have been trading, or how well you trade when personal risk is not involved, discipline in an untrained brain and mind breaks down when it perceives danger. Your brain is built to be a pattern recognition machine looking for and avoiding danger. Discipline is not found “out there”. It is an attitude that a person develops to manage the sense of danger generated by engaging uncertainty. It is a challenge that few traders see as necessary until they have proven to themselves, over and over again, that the problem is not “out there” in platform and methodology (that’s external discipline). The discipline problem is within themselves. And as long as the trader avoids dealing with his or her self-limiting beliefs that are exposed in the process of trading, the avoidance pattern created by fear will continue to generate the same results. The trader stays stuck until he or she decides to develop internal discipline. Internal Discipline is the Capacity to Effectively Manage the Relationship Between Your Psychology and the Ambiguity of Uncertainty. The problem with an undisciplined mind is the unexamined relationship that has been forged between uncertainty and fear in the brain and mind. Left to its own devices, the brain (and hence the mind) does not distinguish between the two. And this glitch blows up many a trader who know methodology and who know how to use their platform. The brain and mind that is using the methodology and system do not know that there is not mortal danger involved in the trade. It sees all uncertainty as dangerous to its (and your) survival. You may read about discipline, talk about the need of discipline, and use affirmations to create an illusion of discipline, but until you can teach your brain and mind to separate uncertainty from fear – you stay stuck in the same reoccurring avoidance or attack patterns that your brain learned in order to face uncertainty and danger. Developing discipline as a skill while in the face of uncertainty is another matter. There is an interface where a trader’s biology and his psychology meet. A trader, to build internal discipline, will have to develop his or her psychology of performance so that the association forged between uncertainty and fear is first decoupled. Then the trader will need to develop new beliefs that allow him or her to engage uncertainty from a probability-based mindset rather than an avoidance-of-danger mindset. Psychology is ultimately about the reconstruction of the neuro-circuitry of belief in the brain. In the mind, the trader experiences psychological discomfort while the new belief becomes embedded as habit. This is why people (and traders) avoid the work of long-term change. They are looking for a quick fix. Changing beliefs requires embracing and regulating the confusion and discomfort that occurs while the “feeling of certainty” of a belief is being challenged and replaced. And your brain will sacrifice effectiveness for the “feeling of certainty” every time. This is called cognitive dissonance. The Link Between Uncertainty and Fear. Our brains (therefore our psychology) evolved to associate mortal fear with uncertainty in the environment – a very different world than found in the rigors of trading. In trading, you are experiencing psychological discomfort, not mortal threat. Your brain was never built to distinguish between the two. If you step out of the illusion of safety and certainty prevalent in the industrialized world, certainty is no longer the norm of belief. Certainty becomes what you are trying to create out of potential chaos. The world becomes a dangerous and uncertain world where your next meal is always in question. From this circumstance it is easy to see how this biological mandate for our survival can mold our psychology to trade “not to lose”, rather than to trade to manage uncertainty. Losing, to our survival brain, is a threat to be avoided. To the psychology of a trader, this bias has to be overcome and managed or the trader will stay stuck in habits that avoid risks at all costs rather than learning to manage risk. Looking for danger in an uncertain world became the norm for physical survival. Over thousands and thousands of years this bias became wired into the way humans perceived the world. From here, you can see that the evolved brain was never built for trading where there is no risk of physical threat but there is risk of loss. And your ancestral brain cannot tell the difference between biological danger and psychological discomfort. You are going to have to make that distinction happen in your brain’s memory banks. Here is the path of association that our friend in the vignette above, and every trader wanting to build a disciplined state of mind, is going to have to work with: First, the brain and mind are already on the alert for danger as a natural position (we are drawn to be on the lookout for bad news. Just listen to the network news). The world in its inherent uncertainty shows up in our perception that is already biased to interpret negatively. Uncertainty presents the mind with ambiguity. The brain/mind quickly seeks an explanation that offers the “feel of certainty or knowing” in the face of this ambiguity. It does not matter whether the explanation is accurate or not. All the brain wants is to move back to the illusion of certainty where the future is known. Ambiguity generates confusion (and a corresponding lack of safety of survival) which sweeps the brain and mind into worry and fear. Worry biases the mind to see the glass half empty, which in trading creates hesitation to risk capital or an urgency to take quick profits. Fear simply paralyzes the ability to think. And you begin to react from fear. When your hand has been frozen on the mouse and you cannot pull the trigger, you have experienced fear. Here’s the process: Uncertainty > Ambiguity > Confusion > Worry > Fear The triggering of uncertainty becomes a chain reaction that leads to fear-based trading. This is what the brain evolved to do. To develop a mind and psychology for trading, this process has to be changed. Re-Inventing the Mind that Emerges From the Brain The first step is to realize that there is nothing wrong with you. The problem is that your brain has adapted you and your psychology in such a way to avoid danger which is connected to uncertainty. It is the current organization of your mindset that engages the uncertainty of trading and life that has to be changed. This involves several stages. The first stage is simply learning how to manage the intensity of emotional outbreaks. This is called emotional regulation. The basis of this element is the interruption of emotionally based patterns before they sweep your thinking away. Breathing, relaxation training, and thought disruption training is key to this aspect of retraining the brain and mind. Until you can manage fear, you will never be able to learn how to approach uncertainty from a different mindset. The second stage is to develop a mindfulness practice. This is where we really begin to examine what beliefs lie behind our performances. In trading, the trader has to take full responsibility for the results of their trading. There is no outside force to blame. It is you, and only you, that keep creating the results from your trading performances. The “you” that trades is the beliefs about self and the world that gelled into the person you currently are. The reason that learning to observe the beliefs behind your fears is important is because it is your beliefs that actually are doing your trading. This is what has to re-structured. The third state of psychological development is learning how to become aware of the thoughts running in your head as you trade. These thoughts give voice to your beliefs. And your beliefs are what are trading your methodology. Learning how to observe the inner workings of thought gives you a window into your beliefs. This requires skills development with large doses of courage to confront your inner demons that give rise to your self doubt. The fourth stage of psychological re-invention of the self is to recognize that you have powerful internal resources that can be developed into a working mindset for successful trading. In the same way that fear is an inherent part of being human, so are elements of an empowered self. The very discipline that most traders have been seeking externally is also an inherent element of your humanness. You do not have to pretend discipline is there by the use of affirmations. Rather, it exists as a feeling you experience in your body that becomes accessible to your mind. For most traders, this is an inherent aspect of your psychology that will have to be developed. The fifth stage is vigilance. Many would call this humbleness. You train yourself to respond to uncertainty from your new-found resources. You commit to the practice of pulling up this internal discipline. Without practice, like any new emerging skill, the skill will atrophy as a habit if not regularly practiced. You become mindful of what state of mind you intend to bring to your trading room. Left to its own devices, your old psychology based on the avoidance of uncertainty will re-assert itself. That is just the biology of pattern showing up as psychology. That is why a mindfulness practice becomes essential to successful trading. It was never your methodology, your indicators, or your trading plan. It was always the mindset that you brought to these elements of trading that produced the performances. And with discipline and self honesty, the mindset you bring the uncertainty of trading can be developed.

There is a moment where greed can become tamed. It takes awakening from a stupor though. Most never learn and the one who do, learn after the price of greed comes calling for the price of its deal. I believe John Templeton, as did Wareen Buffett, found the balance between greed as an evolutionary based emotion and its value in a world beyond mindlessness. There will always be a struggle within the self. This is where trading can become a rarified place to observe the destructive and constructive elements of our being. Rande Howell

Greed is deeply primitve survival emotion that motivated biological systems to take all they could get while the going was good because of their uncertainty about where or when the next meal was coming. It mostly alaigns with a fear in trading known as fear of missing out. When psychology emerged, it then began to influence cognition. Greed, in itself, is neither good nor bad. It is simply an emotion that has surivival value. As psychological beings, we can have choice about where it takes us. Rande

If traders are so smart, why do they lose so much money by making stupid mistakes? Certainly one of the reasons is that they let euphoria (when winning) take over and get aggressive and impulsive. Or let fear take over (when losing) and revenge trade. Who in this forum feels "awfully smart" in their attitude that they bring to their trading day? And if they do, how long do you maintain the "awfully smart" mindset while trading? I do wear glasses (fairly thick also) and I have blessed to help people built a psychology of success as a profession. Some of those people were in pretty rotten places when I met them and some of them simply didn't know how to move from their current "stuckness" to a higher functioning level. And some were either incapable of change or not willing to work for their change. Most are just "normal" people. "Normal" people have a near 50% divorce rate, 60% of the medications in their medicine cabinets are for managing despair and anxiety, and a vast number of "normal" people use Al, drugs, or behaviors to regulate anxiety. Translation: "normal" people are pretty messed up. That's "normal" for you. Not really a desirable place to be. We don't need to talk about "crazy" people - normal is enough of a problem. These "normal" people would rarely consider outside help with their belief system because they have refuse to look inside themselves because they do not see how the brain/mind has confused the "feeling of certainty" with only their perception of reality. The biological foundations of the "feeling of certainty" trumpts the management of ambiguity every time unless the brain is trained to observe the assumptions that have become cast in concrete as beliefs. In trading this glitch is brought into hard relief in the profits and losses of the beliefs of "normal" thinking people confusing the feeling of certainty with risk management. Until this glitch is corrected, your trading account continues to drain. Robert Burton, MD has written about this extensively in his book On Being Certain. I believe any trader who wants to develop his mind for trading needs to understand the concepts which this neuro-scientist possets in this book. I have met very few people that comed equipped with a standard issue probability based mind. The brain is already biased toward the "feeling of certainty" when, if fact, life itself is pretty uncertain. We are possessed to produce explanations that justify our beliefs, no matter how ineffective they are. This is why there are so many psychological mistakes at particular moments in trading where risk and uncertainty derail what we thought was a logical mind. What I do agree with is that looking at your psychology of performance (for most people) is not a great investment until they know how to trade. And they can trade their methodology well when real risk is not a component of trading. Moving to risk management exposes us to our bias toward the "feeling of certainty" rather than the psychological management of performance. If you have done this, good for you. And recognize that you are "abnormal". That is, you do not fit on the standard bell shaped distribution curve that would define the brain/mind that most bring to trading. You are several standard deviations away from normal (50 percentile) in a positive direction for trading. The mindset you bring to the challenge of trading is what is going to bring forth the probalilty of what is going to happen. If the psychology isn't working, then I hope sane people decide to retrain the brain/mind for the new world of trading that they are now engaged in. The old mindset rarely works without work. Rande Howell

This post is an excerpt from my book, Awaking the Mindful Trader: Mastering the Inner Game of Trading. In this series on the Eight Roadblocks to Successful Trading, we are exploring the role of fear in trading. In particular, the way your fears shape your perception and create the results of your trading. What ever you fear, owns you. If you are acting from fear, you will always create self limitation in your trading. As long as you are mindless of your fears or believe that you can ignore your fears while trading, these very beliefs will betray you in your trading. In the example below, a trader has built a large-and-in-charge attitude to mask the face of his fear. He deceives himself (for a while), but not his trading account. Have you ever experienced the fear of missing out and traded impulsively? How much has it cost you? The Fear of Missing Out Getting Control of Impulse Trading “Just a little bit more, just a little bit more – I can milk this one!” whispered Mitchell under his breath. He could feel his excitement build as the trade kept trending upward. “Move your exit point higher – this one’s a homerun,” a thought inside his mind encouraged him. And why not, this one had all the signs of a big one. Mitchell did not like letting the big one, the ones with potential beyond what his trading plan called for, to get away. Instead of taking smaller profits on any of his positions after the first ping, he decided to move his exit and let this one ride. “Another one like this might not come along again in quite awhile,” Mitchell silently reminded himself. The trend continued and he was ready to grab all the profit that it seemed to be offering. He felt energized, his confidence grew – and that confidence began to blind him. Pushing aside his risk management rules because he did not want to miss out on this great opportunity, his trading plan parameters got pushed out of his awareness. The exhilaration of hooking and riding a big one blinded him to the down side of managing risk. In the clutches of greed, he did not notice the historical trend in this trade – it would drop like a brick suddenly. Having abandoned his stops to ride this trade, the deception in his mind caused him to fall hard. Another draw down. Later that day, as he was reviewing his trades, Mitchell was puzzled. Stroking his chin he was chagrined. He pondered, “What happened? I know better than this. I have no idea why I behaved this way. I started out with the intention of trading my plan, and, somewhere along the way, I got sidetracked and forgot about everything I know. It’s like I fell into a trance and my evil twin started trading.” He chuckled to himself because he had no other explanation. It was confounding to him. He was smart enough, skilled enough, and confident enough to trade well. But there he was, getting into trades that were not the right set ups and then his good sense disappeared like dust in the wind. What Happened to Reason? The fear of missing out urges you to push aside risk management tools that keep a trade within acceptable low risk parameters. The temptation is real. Instead of hitting a safe single or double on a trade, the allure of hitting a homerun or hitting the jack pot (with just a little luck) sweeps good sense off the psychological playing field and leaves the enticement of greed whispering in your ear. Real time temptation. Why not swing for the fences? It feels great when you take all the money on the table. And you get to feel powerful. You get to feel like the hero in a movie. Occasionally when you move your stops and exits, you do win. You also move your trading into the arena of gambling – not risk management. Actuarially a casino knows the odds much better than the gambler – and they are sticking to their trading plan for the gambler. On a few occasions the gambler does win and experiences the thrill of winning the jackpot like a drug. Then he is hooked, much like our friend Mitchell is in the vignette above. What the casino knows is that the gambler will ride his euphoria and never see that the odds are stacked against him. He, like the trader, becomes entranced by the chance of hitting it big. As the greed kicks in, it takes over reason. Once under the ether, the trader becomes mindless and sees only through the eyes of greed. This is what happened to Mitchell. And he wins some – at least on paper. He starts out with the intention of trading to plan. But he is seduced by the allure of greed. Soon, any semblance of an impartial, disciplined state of mind is eroded. Gambler and trader have already lost at this point. Psychological management is really this important. Ultimately he gives back his earnings (and then some) to the house. The casino is playing by the rules of risk management while the gambler sacrifices his sensibility to greed – the house wins consistently and the gambler, though he has a couple of great thrills, loses consistently. Trading in a market can be done from a position of impartial and disciplined risk management (which is what the house is doing) and a trader can win consistently. Or a trader can be sucked in by his fear of missing out of big money and get corrupted by his greed – which is what the gambler does. The only difference is that the casino wins consistently and predictably over time, while the gambler wins sometimes (in the short term). But he gives back his gains and loses capital over time. Greed and fear of missing out, from an evolutionary survival perspective, is a very useful emotion. It pushed our ancestors to consume more than they needed NOW so that they would have the resources to survive in leaner times. Acquiring food on a regular basis could not be depended on. Nor was there an assurance of other supplies needed to survive. So, over countless generations, the capacity for greed was bred into the human genome. At some moment in our biological history, humans developed a psychological self – and this is where greed and fear of missing out got disconnected from their biological roots. Suddenly humans were not only putting on fat for the winter and putting away supplies for leaner times (survival motivations), they were putting away money for a rainy day. Eventually the power to survive and prevail became associated with money. By accumulating money we find external validation for our sense of power, our mattering, our importance, and for our power In trading, if this fear is not recognized and managed, it will blow up your trades and trading account. You have to build the psychological strength and discipline to resist it. In the case presented above, Mitchell does go on to develop the internal strengths to resist the temptations of striking it rich quickly and the euphoric rush that takes over the mind of a trader sucked into a mindset controlled by greed. He had to work on it and re-organize the way he understood success to accomplish this victory. By doing so, he actually achieved the success in the longer term that his greed promised in the short term. This is a classic internal war where a biologically based emotion outlives its usefulness when it takes over psychologically the state of mind of the trader. Untethering Your Sense of Identity from Your Historical Dialog What you are afraid of, owns you. Your fears cloud your thinking and color your perception of circumstance. No where is this more important than in trading. Your historical internal dialog (all those thoughts running around in your head) exposes these very fears – the fears that limit your capacity to trade at a higher level. Go back to the vignette with Mitchell and see if you can spot his internal dialog. It is easy to see how his thinking, so dominated by his greed, set him up for failure. This kind of thinking is not a given. It was his mindlessness of his internal dialog that blinded him to its impact on his trading. This was far more than idle chatter or internal noise in his mind – it was a set up for failure. Without discipline and knowledge of these unseen forces at work in his mind, he is led to slaughter. It is his lack of awareness of the power of the internal dialog that set him up. Unlike your capacity to hide from your insecurities in most of the other domains of your life, trading cuts to the very core of your being – there is no place to hide. Trading exposes the internal dialog that comes forth from your fears. Becoming Mindful of your internal dialog during trading will show you the very fears that you must conquer to become a consistently profitable trader. When you are able to separate your thoughts from your sense of identity, becoming an observer to your interior conversations takes on a different nature. You move from avoiding acknowledging the existence of hidden parts of yourself to becoming a detective solving the mystery of your capacity to trade. You become the author of the story of trading in which you are a participant. And you realize that the character who has been trading is flawed, and you (and only you) are going to have to redevelop the character as a peak performance trader. In developing the capacity to slow the body and mind down so that you can become mindful of the composition of your Internal Dialog, you learn to use the internal dialog to become aware of what you have been hiding from yourself. It is through this practice of mindful introspection that you develop yourself as a trader. You will discover that there is far more to develop within your mind that you ever expected. The tiny discomfort you experience when you begin to be honest with yourself and confronting self limiting beliefs gives way to something new. That something new is the re-invention of the self. There is so much empowerment to be discovered and developed. The historical dialog has blinded you to possibility. Now, with the blinders of fear removed, you are now going to explore how to bring forth the empowered self in your trading. In the next chapter you will be exploring instinctual potentials living within you that have been held hostage by your fears. Now you will learn how to name these elements of self that will empower you to zone into peak performance trading. Rande Howell

What your teaching "Focused on the data" is what I call Ruler and Sage. Or the state of mind defined by the emotions of discipline and impartiality. You're using a behavioral immensement strategy whereas I teach a memory enrichment process to build state of mind. With a little luck, the students will attune to your mindset (which happens as a by product of our humanness) and they will habituate it so that it becomes familiar pattern for them. I also appreciate your approach where you are using a process called stress inoculation to adapt your students gradually to higher levels of risk so their confidence is also grown. Rande Howell

Stress, as understood in neuro-biology, is actually a physiological state indicating biological arousal or being keyed up for action. Stress is further broken down into two kinds. Distress and eustress. The difference between the two is the mind set that interacts with the physiological state. In distress the uncertainty of a situation is engaged with negative appraisal of the future (read fear of loss). This is called anxiety, or in trading it is called worry or fear. In eustress the uncertainty of the future is meet with a positive appraisal of a potentail outcome. Adding one more distinction about stress as applied to trading. The level of arousal necessary for optimum performance is based on the level of physical or cognitive functioning needed for peak performance. In sports such as American football, where the requirements of peak performance are very physical, high levels of eustress are needed to produce optimum performance. Whereas in such pursuits as bridge, chess, and trading, where their is little need for physical performance, low levels of arousal are needed for cognitive peak performance. The problem is that the high levels of adrenaline and cortisol are not conducive to calm, impartial thinking so needed for evaluation of ambiguity (effective trading mindset) Rande Howell. Hope that helps.

by Rande Howell The mindset that you brought into trading is rarely rooted in the psychology that will produce success in trading. If you hesitate in attempting to pull the trigger, or experience a fear and impulse roller coaster ride when you are in a trade attempting to manage it, you have experienced this first-hand. Many people come into trading with a psychology of self that produced success in other domains of their lives. By sheer drive or by patient accumulation of capital over time, people enter trading with preconceived notions of how to produce success. They believe, “My work ethic worked in the past, why not in trading?” The Journey of Understanding Fear After a number of years committed to learning how to trade, the vast majority of traders still perform inconsistently and have come nowhere close to managing the fears that manifest in trading. The old ways of managing fear, so useful in their former careers, simply do not work in the uncertainty of trading. Trading with an attitude of “you can conquer the world” is not going to help you win at trading. Developing an attitude of winning in trading is very different from winning in most other endeavors. It’s not external. Instead, you have to conquer yourself, and out of this comes the internal kind of confidence necessary for successful trading. This is a very different kind of confidence. Trading confidence is rooted in being comfortable in managing ambiguity rather than certainty. The psychology that most new traders bring into trading was built to create certainty and then act accordingly. In trading, the opposite is true. The trader is always in the midst of uncertainty and the ambiguity that springs from never working with a “sure thing”. This powerful bias toward certainty is wired into the very fiber of our biology. Humans evolved with an environmental pressure to survive in a dangerous and threatening world. And our success as a species is in part due to our capacity to spot danger at a distance and avoid it. Humans became wired to seek certainty and avoid uncertainty. And as humans became psychological, we developed beliefs that shaped our perception rooted in avoiding uncertainty and desiring certainty. A mindset focused on trading not-to-lose-money-again is the way this bias shows up in the ambiguity found in trading. Re-enforced by family and culture, our perception became shaped to avoid uncertainty (threat) or attack the object of danger. This trait of coupling uncertainty with fear is truly exposed in trading. In most of the areas of our lives, the relationship between uncertainty, ambiguity, worry, and fear are not so straightforward and immediate so we do not have to adapt to this world view. This allows us to remain in an illusion of control. Occasionally something does crash into our carefully “certaintized” world (but they are rare if you live in a developed country). In trading the linkage between uncertainty, ambiguity, worry, and fear is ever present and is inescapable. This is the problem that has to be solved to become a consistent trader. Uncertainty and ambiguity have to be de-coupled from worry and fear. And a trader has to develop a mindset that allows him to work with the ambiguity of uncertainty. It will not be the mindset that you brought into trading. It is a mindset that has to be developed as the old mindset is deconstructed. Toward a Probability-Based State of Mind The state of mind that you bring to the rigors of trading is going to determine the probability of your success in trading. The standard, historical mindset that humans have developed over many years is that of fear and avoidance. And most traders, in their mindlessness, bring this historical fear-based mindset into their trading without ever having the skills to observe and change it. As long as this is not changed, fear will build and maintain a belief system that will avoid threat or psychological discomfort. With a fear based mindset, it does not matter that probability (your methodology) is on your side. Fear will never allow you to move out of reactive avoidance patterns without reconstructing the beliefs that lie behind the fear. This is why, by themselves, affirmations, visualizations, guided meditations, and NLP do not work to create long term change. Belief structures in the brain and the emergent mind are highly resistant to change. Failed diets and failed surface-change solutions clutter a person’s library as a result. The bottom line is that the beliefs that we bring to trading are rarely the beliefs that can produce success in trading. Until uncertainty has been decoupled from fear and worry, a trader is not going to be able to produce a probability-based mindset that is needed in trading. Add to this the reality that the vast majority of traders lose money and transfer their capital to traders who have been able to build or inherit a disciplined and impartial mindset. By our nature, we evolve as we adapt our belief system to the challenges of the world or we resist evolving due to our nature to produce certainty. This is what biological systems, whether conscious or not, do in their dance with the world of uncertainty that we are immersed in. We develop "fears" that allow us to avoid the ambiguity of the uncertainty of change. These fears were in response to the threat that uncertainty held for survival. And at one time in our not-so-distant past, uncertainty and fear were glued together as part of our survival. It is the management of this ambiguity that must be faced head on in trading. The distant past must be brought into the here and now of trading. In un-tethering uncertainty from fear, you open the door to the reorganization of the self in a purposeful direction. In this sense, trading becomes the laboratory of the design of self-fulfilling beliefs about the self and the world that we are part of. When we learn to face our fears from a position of calm assertiveness and can think in terms of probability, trading becomes much easier. We are no longer living in our histories, but are creating our futures. In mindfully developing a state of mind designed to deal effectively with probability, we become intentional about the mindset that we bring to the uncertainty and ambiguity of trading. There is no threat to biological life at stake – fear and worry are no longer necessary for processing information. With training, a probability mindset delivers the disciplined, impartial, patient, and courageous state of mind needed to engage the uncertainty of not knowing “for sure” and a trader’s methodology truly gives him the edge he needs in the management of risk – not threat. This is a state of mind that the trader builds – he does not find it. It is not “out there”. It exists as a possibility within each trader; but they have to become intentional in developing it. Rande Howell www.tradersstateofmind.com

The mindset that you brought into trading is rarely rooted in the psychology that will produce success in trading. If you hesitate in attempting to pull the trigger, or experience a fear and impulse roller coaster ride when you are in a trade attempting to manage it, you have experienced this first-hand. Many people come into trading with a psychology of self that produced success in other domains of their lives. By sheer drive or by patient accumulation of capital over time, people enter trading with preconceived notions of how to produce success. They believe, “My work ethic worked in the past, why not in trading?” The Journey of Understanding Fear After a number of years committed to learning how to trade, the vast majority of traders still perform inconsistently and have come nowhere close to managing the fears that manifest in trading. The old ways of managing fear, so useful in their former careers, simply do not work in the uncertainty of trading. Trading with an attitude of “you can conquer the world” is not going to help you win at trading. Developing an attitude of winning in trading is very different from winning in most other endeavors. It’s not external. Instead, you have to conquer yourself, and out of this comes the internal kind of confidence necessary for successful trading. This is a very different kind of confidence. Trading confidence is rooted in being comfortable in managing ambiguity rather than certainty. The psychology that most new traders bring into trading was built to create certainty and then act accordingly. In trading, the opposite is true. The trader is always in the midst of uncertainty and the ambiguity that springs from never working with a “sure thing”. This powerful bias toward certainty is wired into the very fiber of our biology. Humans evolved with an environmental pressure to survive in a dangerous and threatening world. And our success as a species is in part due to our capacity to spot danger at a distance and avoid it. Humans became wired to seek certainty and avoid uncertainty. And as humans became psychological, we developed beliefs that shaped our perception rooted in avoiding uncertainty and desiring certainty. A mindset focused on trading not-to-lose-money-again is the way this bias shows up in the ambiguity found in trading. Re-enforced by family and culture, our perception became shaped to avoid uncertainty (threat) or attack the object of danger. This trait of coupling uncertainty with fear is truly exposed in trading. In most of the areas of our lives, the relationship between uncertainty, ambiguity, worry, and fear are not so straightforward and immediate so we do not have to adapt to this world view. This allows us to remain in an illusion of control. Occasionally something does crash into our carefully “certaintized” world (but they are rare if you live in a developed country). In trading the linkage between uncertainty, ambiguity, worry, and fear is ever present and is inescapable. This is the problem that has to be solved to become a consistent trader. Uncertainty and ambiguity have to be de-coupled from worry and fear. And a trader has to develop a mindset that allows him to work with the ambiguity of uncertainty. It will not be the mindset that you brought into trading. It is a mindset that has to be developed as the old mindset is deconstructed. Toward a Probability-Based State of Mind The state of mind that you bring to the rigors of trading is going to determine the probability of your success in trading. The standard, historical mindset that humans have developed over many years is that of fear and avoidance. And most traders, in their mindlessness, bring this historical fear-based mindset into their trading without ever having the skills to observe and change it. As long as this is not changed, fear will build and maintain a belief system that will avoid threat or psychological discomfort. With a fear based mindset, it does not matter that probability (your methodology) is on your side. Fear will never allow you to move out of reactive avoidance patterns without reconstructing the beliefs that lie behind the fear. This is why, by themselves, affirmations, visualizations, guided meditations, and NLP do not work to create long term change. Belief structures in the brain and the emergent mind are highly resistant to change. Failed diets and failed surface-change solutions clutter a person’s library as a result. The bottom line is that the beliefs that we bring to trading are rarely the beliefs that can produce success in trading. Until uncertainty has been decoupled from fear and worry, a trader is not going to be able to produce a probability-based mindset that is needed in trading. Add to this the reality that the vast majority of traders lose money and transfer their capital to traders who have been able to build or inherit a disciplined and impartial mindset. By our nature, we evolve as we adapt our belief system to the challenges of the world or we resist evolving due to our nature to produce certainty. This is what biological systems, whether conscious or not, do in their dance with the world of uncertainty that we are immersed in. We develop "fears" that allow us to avoid the ambiguity of the uncertainty of change. These fears were in response to the threat that uncertainty held for survival. And at one time in our not-so-distant past, uncertainty and fear were glued together as part of our survival. It is the management of this ambiguity that must be faced head on in trading. The distant past must be brought into the here and now of trading. In un-tethering uncertainty from fear, you open the door to the reorganization of the self in a purposeful direction. In this sense, trading becomes the laboratory of the design of self-fulfilling beliefs about the self and the world that we are part of. When we learn to face our fears from a position of calm assertiveness and can think in terms of probability, trading becomes much easier. We are no longer living in our histories, but are creating our futures. In mindfully developing a state of mind designed to deal effectively with probability, we become intentional about the mindset that we bring to the uncertainty and ambiguity of trading. There is no threat to biological life at stake – fear and worry are no longer necessary for processing information. With training, a probability mindset delivers the disciplined, impartial, patient, and courageous state of mind needed to engage the uncertainty of not knowing “for sure” and a trader’s methodology truly gives him the edge he needs in the management of risk – not threat. This is a state of mind that the trader builds – he does not find it. It is not “out there”. It exists as a possibility within each trader; but they have to become intentional in developing it.

It wasn't intented on my part as criticism. And I appreciate your suggestions. Probably the language used comes out of my former life in advertising. Rande Howell

Steve46 What I like about what you did is that you keep your students grounded in the here and now of staying focused on the trader's performance in a trade, rather than the anticipation of disaster or of a future event. The state of mind we bring to the trade opens or closes the possibility and probability of the trade. In dealing with ambiguity, odds favor a calm, disciplined, patient, courageous, and impartial state of mind. Fortunately this state of mind can be built if the trader does not come stock with it. Rande Howell

If this makes it easier for you, good for you.

Please note my book has been available for awhile now. It is relevant material for any trader seeker to understand and manage his emotional nature. And I certainly will participate in the discussion. Rande Howell

If skillfully applied, self hypnosis can be a useful skill to develop as part of a psychological trading plan. It is not a cure all though. I teach self-hypnosis as part of my course work. I teach it as a method to calm the body and mind and to re-direct your awareness away from fear and toward more empowered parts of the self. If you use self hypnois to over power fear or greed, it will work in the short term and fail in the long term. You do not change beliefs with hypnosis -- you calm body and still mind. Self hypnosis fails in treating food compulsion and smoking sessations long term. You have to do the internal work once you have the mind still. Rande