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Rande Howell

The Mind You Brought to Trading is Not the MInd That Brings Success in Trading

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First congratulations....you finally figured out that the reason for my trade isn't about logic....its about the emotional reaction that the crowd exhibits when Mr. Bernanke says something that they A. agree with, B. disagree with, or C. are surprised to hear.

 

Steve

 

Your trade was not about logic, but it does lead you to an A or B or C conclusion. As a cynical onlooker, I would suggest that there are a lot more actions and reactions that might occur from a Bernanke comment than your non-logical A or B or C reactions, but at the same time I am not suggesting that you have cataloged them all in your short response. However, how do you know which reaction it is going to be to take advantage of your ability to be a few steps ahead of the crowd?

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Rande, please elaborate on the subject of neuro-biology within your future posts and topics. For instance, I want to be able to better distinguish the differences between emotions and my sense of touch. I'm aware all my thoughts are emotional state dependent, but I hadn't formulated the importance of emotions within the hieracy of my senses of sight sound and feelings ...until you stated it so brilliantly as the accepted norm.

 

I'm aware my emotional state filters what I'm able to see and hear. I suspect my thoughts are based upon what I'm seeing and hearing. I suspect my emotional state is dependent upon what I'm thinking. Thus my emotional state is both the cause and affect of what I'm seeing and hearing. So I'm trying to beter understand these interdependencies.

 

There's a lot I can gain from what you take for granted as common knowledge or accepted norms. If I haven't presented my interest in a way that enables you to comfortably carry on in the general sense of where you intended to go with this line of thought, just know I am interested in learning more of what you take for granted as something everyone knows. All I know is it's a viable science for managing my life, so please define the nuances with as much detail as possible.

 

This is the observer you bring to "see" opportunity. And the "nopes" bring an observer to the situation that "sees" no opportunity. Same event, two different observers seeing different possibililites. It is the emotion, rooted in the management of uncertainty, that creates the observer of the event. The accepted norm in neuro-biology is that all thought is emotional state dependent. It's not the only way of understanding how we go about understanding and interpreting phenomena, it is just the one I base my assumptions upon.

 

Rande Howell

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This seems to me to be about a belief system as applied to trading.If a our strategies are based on how and why a market moves,how does that affect our trading results? The market had already moved off the low before Bernanke said anything.One interpretation is that insiders already knew what he was going to say and had positioned themselves accordingly.If we believe that then you have to ask did they also predict the crowd reaction? Did they figure there would not be any/much reaction? Does it matter to them if they are big enough to move the market anyway? Is it a case of none of the above?

Unless you have certainty then...you cannot be certain your analysis is correct for the reasons you believe.I doubt Steve,or anyone is using one tool to make trading decisions.In other words,it is not the strategy alone that is important,it is what the trader brings to the strategy that counts.There are rules and shades of grey that may be difficult for another trader to apply in exactly the same way.

When trading on a belief do you wait for confirmation (using whatever you use) before trading? If so,that confirmation may not be based on 'crowd reaction',but simply a technical buy signal which is a result of something else.

Belief system is one thing,results are another.If your trading results are good to go,the belief system they are based on could be wrong (or wrong in this case) but really it doesn't matter. It only matters if you believe your belief system needs to change.

 

 

Steve

Your trade was not about logic, but it does lead you to an A or B or C conclusion. As a cynical onlooker, I would suggest that there are a lot more actions and reactions that might occur from a Bernanke comment than your non-logical A or B or C reactions, but at the same time I am not suggesting that you have cataloged them all in your short response. However, how do you know which reaction it is going to be to take advantage of your ability to be a few steps ahead of the crowd?.

Edited by mitsubishi

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Here is what I see from Bernanke's speech day:

 

Multiple range bound periods, same as many other days and surprise, surpise a breakout. Same as many other days.

 

Exactly.And for another trader, that looks like a typical move off an inverted head and shoulders.

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SpearPointTrader

 

I'm with SUIYA on this one regarding "detachment from reality". In the practice of mindfulness, there is a stepping back and observing from a dispassionate perspective. That may represent a very different way of seeing the world -- kinda like your detachment. For most traders this sense of impartiality has to be learned, so it is a deviation from the historical way they have interacted with the world.

 

If you read this forum, really read what SUIYA, MM, and GOSU say about this. Take their comments in the context of trading, rather than other domains of action. It is their (learned or inherent, I don't know) detachment or dispassion that allows them to "see" the market in such a way that they are able to extract from the markets. At least, this is my take on it. I don't know for a fact that they are successful traders -- but I believe so based on their presentation.

 

In my work I am striving to teach traders how to turn or and turn off this quality. Turn on this perspective when trading because it is necessary to attune to the emotionality of the markets and take advantage of the emotion traders are bringing to the dance. In dispassion, detachment, or impartiality is becomes much more possible to "see" or sense others fear and/or greed based on market conditions. This is not a state of mind that will bring success in other relationships in other domains though. It's a necessary element in trading mind though.

 

Rande Howell

 

I missed this funny post earlier. I don't know about the other two people you reference but I've hardly said anything in my posts about detachment, dispassion, impartiality, etc. The one time I used the word "dispassion" was in reference to your post in which you stated you don't trade because you lack the passion for it. Anyone who takes your advice to "really read" what I say about this is going to be disappointed.

 

Regarding what allows me to "see" the market, you and I have very different takes, which is no surprise because you and I have very different orientations toward trading. Here's my take on what allows me to see the market to extract: I can see the market because I have my displays set up to watch the game from all the important angles and I understand enough about how the game is played that I can follow along as I watch and play when it's "cheap" to do so. I didn't have to learn detachment, dispassion, or impartiality. If they are inherent, it is because they are by-products of my being focused on the task at hand.

 

I have no idea what you're talking about regarding turning this quality on and off because they won't bring "success" in relationships and outside of trading. Trading is just not that important to begin with.

 

And regarding being a "successful trader," that has as much meaning to me as being a "successful driver." Same goes for the tired phrase "consistently profitable trader."

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Rande, please elaborate on the subject of neuro-biology within your future posts and topics. For instance, I want to be able to better distinguish the differences between emotions and my sense of touch. I'm aware all my thoughts are emotional state dependent, but I hadn't formulated the importance of emotions within the hieracy of my senses of sight sound and feelings ...until you stated it so brilliantly as the accepted norm.

 

I'm aware my emotional state filters what I'm able to see and hear. I suspect my thoughts are based upon what I'm seeing and hearing. I suspect my emotional state is dependent upon what I'm thinking. Thus my emotional state is both the cause and affect of what I'm seeing and hearing. So I'm trying to beter understand these interdependencies.

 

There's a lot I can gain from what you take for granted as common knowledge or accepted norms. If I haven't presented my interest in a way that enables you to comfortably carry on in the general sense of where you intended to go with this line of thought, just know I am interested in learning more of what you take for granted as something everyone knows. All I know is it's a viable science for managing my life, so please define the nuances with as much detail as possible.

 

onesmith

 

I will. In the meantime I encourage to go to my website and hit the tab on Articles. I have a number of past articles and MoneyShow videos that focus on brain, emotion, mind, and trading. The major point is to begin to appreciate that what we call thinking is actually our neo-cortex producing an explanation for what our emotional brain has already decided based on assumptions that have become embedded into neuro-circuitry as beliefs. The official name for this is cognitive dissonance.

 

Many different belief systems interact with the market. None are right in an absolute senes. You will see varioius perspectives on the market producing the probalility of winning trades, And vice versa. When the trader wins consistently, he often begins to believe in the certainty of his beliefs. And therein lies a danger in believing in the biological throwness to seek certainty. Many real good traders start becoming attuned to the market (which is a biological and physical phenomenon). And out of this attunement, their methodology is shaped beyond a systems approach. When SUIYA was talking about why he made some trades, he reported his response was "I dunno". My suspicion is that this is his awareness becomes attuned and his intuition speaks greatly giving his conscious decision making a real leg up.

 

Rande Howell

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Your trade was not about logic, but it does lead you to an A or B or C conclusion. As a cynical onlooker, I would suggest that there are a lot more actions and reactions that might occur from a Bernanke comment than your non-logical A or B or C reactions, but at the same time I am not suggesting that you have cataloged them all in your short response. However, how do you know which reaction it is going to be to take advantage of your ability to be a few steps ahead of the crowd?

 

I prefer to simplify...right or wrong that is my primary goal when trading....the reason for this is that I believe that the folks who control the markets are simple people with simple motivations.....primarily "profit" and what I call "direct action" meaning that these folks, if given two choices will prefer to take the most direct route to making a profit. As an example if there is an opportunity "now" to take a profit, they will take that profit immediately, rather than wait and think about the future ramifications....I try to put myself in that mindset (in their heads)

 

So...prior to the event (Bernanke speaking) I ask myself "Can we anticipate what Bernanke might be asked"? (for me the answer is yes, I believe I know some of the questions that will be asked)...."Can we anticipate his response to these questions"? (again my answer is yes and in this regard the question that I am waiting for is about the Bush tax cuts)

 

As Josh pointed out correctly, we already know what "the markets" think about this subject....the market is "for" anything that supports the ongoing economic recovery...by extension we know that whenever this subject is brought up, there are participants who will hear and respond in a knee jerk fashion....how do I "know" this....experience and observation....I was trained by folks who said the same thing to me that I am typing in response to your question...it was good advice then....and (apparently) it still works....

 

Finally, in terms of being a few steps ahead of the crowd, I mispoke....what I want is to be ONE step ahead...all I want is to be able to anticipate that one comment, and then be able to hit my buy button before the rest of the crowd....in my opinion this is relatively simple (as it should be) and all that is required is that the participant take the time to think it out and prepare ahead of time, recognize the opportunity then execute without hesitation....

 

Part of your question is "could I be wrong"...sure...but again this like any process requires practice....you could certainly sim trade it anytime an event like this occurs and at some point you can see if you have a way to approach it that works...from my point of view this type of trade appeals to folks who have some experience and the ability to accurately estimate the crowd's reaction to news.

 

Hope this helps

Steve

Edited by steve46

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onesmith

 

I will.In the meantime I encourage to go to my website and hit the tab on Articles. I have a number of past articles and MoneyShow videos that focus on brain, emotion, mind, and trading. The major point is to begin to appreciate that what we call thinking is actually our neo-cortex producing an explanation for what our emotional brain has already decided based on assumptions that have become embedded into neuro-circuitry as beliefs. The official name for this is cognitive dissonance.

 

Many different belief systems interact with the market. None are right in an absolute senes. You will see varioius perspectives on the market producing the probalility of winning trades, And vice versa. When the trader wins consistently, he often begins to believe in the certainty of his beliefs. And therein lies a danger in believing in the biological throwness to seek certainty. Many real good traders start becoming attuned to the market (which is a biological and physical phenomenon). And out of this attunement, their methodology is shaped beyond a systems approach. When SUIYA was talking about why he made some trades, he reported his response was "I dunno". My suspicion is that this is his awareness becomes attuned and his intuition speaks greatly giving his conscious decision making a real leg up.

 

Rande Howell

 

Yeah,if you like torture you could do that. I keep tellin' myself to be open minded,but my personal experience is..disappointment and a sense of deja vu.

Personally,i prefer to do the torture myself.Right now i'd prefer to go round to my neighbour's house while he's away, get his budgie drunk on jack daniels and stick it on youtube. I feel that to be more the zeitgeist of the times,and you know,laughter is the best medicine.It's also a lot closer to reality than you taking wild stabs at what you think trading is about.Jeez,put it out of it's misery for christ.

Yup,most traders lose...next? :helloooo:

 

Well you kinda stole that outta my last post.Your consistent bad spelling adds nothing to your poor writing style and due to my biological make up it really brings a bias of perception to my neo-cortex,which is unhealthy for a person with as many issues as i have.

 

Experience.That's where instinct comes from and since it's one of the biggest things that separates winners from losers a psychologist can't help you.Sometimes winning in the long run is about experience.Probably lot's of people give up as soon as the going gets tough.

 

It just isn't.Like a lot of things in this world it's just a theory.You cannot rewire a persons belief system in order for them to trade.You cannot rewire a wannabe to be a rock star (no matter how much they want it).You cannot rewire a pacifist into a soldier.

My prediction regarding your field making any inroads into the trading world has about the same odds as the gov war on drugs ever being won.

Let's re-run the turtles experiment,this time using their own money..and at some point before they blow up we'll send them to you ..for re-programming

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I prefer to simplify...right or wrong that is my primary goal when trading....the reason for this is that I believe that the folks who control the markets are simple people with simple motivations.....primarily "profit" and what I call "direct action" meaning that these folks, if given two choices will prefer to take the most direct route to making a profit. As an example if there is an opportunity "now" to take a profit, they will take that profit immediately, rather than wait and think about the future ramifications....I try to put myself in that mindset (in their heads)

 

So...prior to the event (Bernanke speaking) I ask myself "Can we anticipate what Bernanke might be asked"? (for me the answer is yes, I believe I know some of the questions that will be asked)...."Can we anticipate his response to these questions"? (again my answer is yes and in this regard the question that I am waiting for is about the Bush tax cuts)

 

As Josh pointed out correctly, we already know what "the markets" think about this subject....the market is "for" anything that supports the ongoing economic recovery...by extension we know that whenever this subject is brought up, there are participants who will hear and respond in a knee jerk fashion....how do I "know" this....experience and observation....I was trained by folks who said the same thing to me that I am typing in response to your question...it was good advice then....and (apparently) it still works....

 

Finally, in terms of being a few steps ahead of the crowd, I mispoke....what I want is to be ONE step ahead...all I want is to be able to anticipate that one comment, and then be able to hit my buy button before the rest of the crowd....in my opinion this is relatively simple (as it should be) and all that is required is that the participant take the time to think it out and prepare ahead of time, recognize the opportunity then execute without hesitation....

 

Part of your question is "could I be wrong"...sure...but again this like any process requires practice....you could certainly sim trade it anytime an event like this occurs and at some point you can see if you have a way to approach it that works...from my point of view this type of trade appeals to folks who have some experience and the ability to accurately estimate the crowd's reaction to news.

 

Hope this helps

Steve

 

Then you have a catalog in your mind of all the questions that can be asked and are confident that you know the responses that can be given. I would suspect then that you would also have to be able to anticipate who is going to ask the question which means you will have to know who is present at the hearing or function. Additionally, if a liberal asked a question the market would react differently than if a conservative asked the same question, assuming too that bernanke is going to answer both the same way.

 

I trade the news, but very differently. I try to get properly positioned before the news in a manner that opposes the weakest side. Properly positioned means that there is a decent distance between the current price and my breakeven entry stop. Not properly positioned means the current price is too close to my entry or I am negative on the trade. I get out either way and do not try to capitalize on the news. When the news moves in my direction without hesitation, I have the best trade location possible. If It moves toward me, I get stopped out of my position, frequently with slippage. I only attempt this with major economic news. In my mind a bernanke interview or hearing is a non event these days which speaks of the effectiveness of monetary policy under current economic conditions.

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....... In my mind a bernanke interview or hearing is a non event these days which speaks of the effectiveness of monetary policy under current economic conditions.

Agree, it has been how many decades now of a 0% interest rate policy? :)

 

Waiting around for something exciting to come out of Bernanke's mouth is like waiting for the Patriots to win the big one again. :doh:

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Then you have a catalog in your mind of all the questions that can be asked and are confident that you know the responses that can be given. I would suspect then that you would also have to be able to anticipate who is going to ask the question which means you will have to know who is present at the hearing or function. Additionally, if a liberal asked a question the market would react differently than if a conservative asked the same question, assuming too that bernanke is going to answer both the same way.

 

I trade the news, but very differently. I try to get properly positioned before the news in a manner that opposes the weakest side. Properly positioned means that there is a decent distance between the current price and my breakeven entry stop. Not properly positioned means the current price is too close to my entry or I am negative on the trade. I get out either way and do not try to capitalize on the news. When the news moves in my direction without hesitation, I have the best trade location possible. If It moves toward me, I get stopped out of my position, frequently with slippage. I only attempt this with major economic news. In my mind a bernanke interview or hearing is a non event these days which speaks of the effectiveness of monetary policy under current economic conditions.

 

No catalog of questions...I have a general idea of what will be asked....I am PREPARED to act based on a specific question...if I don't get that one, I don't trade...Its an important point you bring up....

No concern for who asks....the people who react to the answer don't care and neither do I

As mentioned in a previous post several days ago (in response to a comment by Negotiator) I preposition using options and trade around that

Seems to me there are several ways to do it and if you have a way that works for you, thats great...thanks for sharing your method....

 

Best of luck in the markets

Steve

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It just isn't.Like a lot of things in this world it's just a theory.You cannot rewire a persons belief system in order for them to trade.You cannot rewire a wannabe to be a rock star (no matter how much they want it).You cannot rewire a pacifist into a soldier.

My prediction regarding your field making any inroads into the trading world has about the same odds as the gov war on drugs ever being won.

Let's re-run the turtles experiment,this time using their own money..and at some point before they blow up we'll send them to you ..for re-programming

 

I got stuck on your reference to military...while I must agree you certainly wont turn a pacifist into an urban combattant because he doesnt share the slightest idea about fighting,but this doent count for someone thats already having an inherent idea of what it takes to fight.A little help=reprogamming will turn the latter into an able soldier through reprogramming his attitude towards himself,the work he is supposed to do and his thoughts on how to perceive such fluid situations.Your examples all work on the assumption that one extreme is turned into its opposite which naturally should be hard to realise.Someone without talent for painting would never be turned into even a soso painter,even if taught by Leonardo da Vinci.I would think this is also valid for trading.IMO the psychological aspect can have merit for trading if you analyse and correct patterns on your own free will and insight,not just rethinking what someone else told one to think.

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Guest OILFXPRO
I disagree...I think we all "see" the same thing....what differs is the significance we assign to what we see....and my "proof" is over in the thread titled "daytrading the Emini futures"....where I suggest to other traders that upon hearing Mr. Bernanke's response to a question earlier today, I decided to take a trade......while other presumably rational traders respond by saying that I am crazy to do so.....

 

We hear the same words...I decide to take the trade, others decide "nope"

 

 

Under emotional control u see your emotionally manipulated mind , your irrational min

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Guest OILFXPRO
After a career in sales and a downsizing, Jack decides to take control of his future by focusing his considerable energy on developing a new career in trading. He is highly disciplined, motivated, goal-oriented, and has a winning attitude – traits that served him well as a professional salesman. After studying trading and becoming proficient in his platform and methodology, he is still a break-even trader, at best. And he does not know why.

 

What confounds him is that he is not consistently following his own trading rules regarding entry points (getting in late or too early) and exits (getting out early after small profits). In hindsight, while he is reviewing his trading day, Jack recognizes (after doing some research on trader psychology) that he is trading from a mindset rooted in fear. But it does not make sense to him and he cannot see why he keeps losing.

 

In a consult with me he explains, “I know how to deal with the fear of rejection. To be successful, you get over that in sales. You know it’s a numbers game. When you lose one, you just get yourself cranked back up for the next one. You’ve got to get back to that winning attitude. That is what attracts success.”

 

I ask Jack to explain how he produces a winning attitude in trading. He responds, “The same way I did in sales. I use a visualization technique where I see and feel what it would be like to make $1,000,000. It really pumps me up. I can taste the victory. I then take that energy and focus it on my next sales opportunity or my next trade. I have photographs of what that success would provide me. I’ve built a sales career out of being able to create these high-energy states and to attract success.”

 

I ask Jack, “How is that skill translating to success in trading?” His answer, “Something’s not working. I’m sure it should be working. But it’s not working. And I don’t know what I’m missing.”

 

Why Jack Can’t Trade

 

On the surface Jack’s training in visualization and the law of attraction seems applicable to trading. This training has worked in other domains of experience, why not in trading? Jack's visualization creates a high energy and the chemistry of euphoria to build a desire for the goal. That is a problem in trading, where a very calm, assertive state of mind is needed to manage the tasks of trading. This is a very different feeling state than high energy and euphoric states he called forward to conquer fear of rejection in sales.

 

When in the grips of euphoria (you might call this state a highly positive energetic mood where you feel like you can do anything), you feel sure that the good times are going to roll and continue forever. The trader “feels” certain that he is going to win. You are positive that you are going to make the next sale by the sheer force of will. From that feeling, rooted in euphoria, the thinking, perceptual mind believes in the certainty of winning. This is a sought-after state of mind in high-energy sports such as American football (and in business) where dominating an opponent and winning is part of a peak performance state of mind.

 

In that high-energy, euphoric state, the trader’s mind (deeply connected to his emotional state) is no longer in an impartial and clear mindset. It is highly biased to see only the good that is shaping up. This leads to over-trading and over-trading leads to losses. Those losses lead to pattern-recognition and reaction-formation by the emotional brain of the trader. No amount of willpower or having a positive attitude will force the emotional brain not to hijack the thinking brain once a reactive pattern has been formed.

 

The brain associates these high-energy states with losses and, quite naturally, triggers to avoid them. By experience, the intentional generation of a euphoric emotional cocktail has now been associated with the fear of loss. Suddenly the euphoric feeling (not the performance) of being able to dominate the markets and create a positive future becomes counter-productive. It is now associated with the fear of loss. This is where Jack is stuck.

 

The State of Mind That You Bring to Trading

 

To become consistently successful in his new career, Jack is going to have to relearn how to create the mindset that he brings to trading. The old mindset, so successful in sales and business, became a liability in trading. Why?

 

Highly cognitive endeavors such as chess, bridge, and trading require low levels of emotional arousal for peak performance. You are not trying to produce high-energy feeling states for trading. You are working to produce low levels of emotional arousal so that your trading mind does not get influenced by euphoria or fear (which require high energy states). Getting “cranked up” in a winning attitude produced disastrous trading results for Jack. Low arousal states are required for the methodical, impartial-thinking emotional states of a mindset built for trading.

 

Self-described adrenaline junkie that Jack is, this was a difficult retraining exercise. What he had to do was develop a calm, assertive, impartial state of mind from which to trade. In this state of mind, while in the act of trading, he was not trying to win or lose the trade. Instead he was focused on playing the trade so that he performed it flawlessly according to his trading plan.

 

At this moment probability was on his side. He now “felt” certain that when he traded his plan, he had an edge in his trading. The difference is that he learned to become an emotional manager of what feeling-state was influencing the certainty of beliefs that he brought to trading.

 

The "feeling" element of emotion will always do this. In fear, there is a feeling-state that creates a mindset that believes that it is certain that doom is coming if you do not escape. Hesitating to get in at your planned entry points without massive confirmation is often the resulting behavior. In euphoric emotional states, the feeling contaminates your thinking with a certainty of belief that the good times are going to continue to roll. Calm, assertive and impartial emotional states produce a feeling of being certain that you can take advantage of whatever the market is willing to give you. Low arousal states help keep you in this feeling-state where clear, calm thinking occurs.

 

Jack Learns to Trade

 

Jack is still an adrenaline junkie – outside of trading. When he finishes trading for the day, he now rewards himself by directing his energy into other domains where high energy states are useful to performance (tennis in this case). When he is trading though, Jack now calls forward the state of mind rooted in calm, impartial, assertiveness. In this state of mind, he sees the information on his screens, biased by impartiality rather than biased by the certainty of being worth a $1,000,000.

 

Only real traders can agree with this ,........................but messing with trading minds has to be done constructively ........otherwise the minds are messed up more.

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Under emotional control u see your emotionally manipulated mind , your irrational min

 

In neuro-science what has been discovered is that you never experience reality, or the markets as a trader. Instead your brain takes data from your sensorial modalities and forms a virtual representation that is projected upon the markets. That is what you "see". You do not see the markets. The virtual simulation is the belief lens through which you interpret the phenomena. You hear utterances from a person and your brain's virtual simulation creates meaning. We did not hear the same thing. History is interpreted by the victors to be right.

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Guest OILFXPRO

The mind you bring to trading has the risk of under performing or failing to trade profitably , despite being given a highly profitable system to trade.There are many risks associated with the human brain , it is the 9 inches between the ears that makes a successful trader , these areas of risk guarantee under performance

 

These 50 areas of risks include

 

Emotions (greed , fear , desires , frustrations )

stress responses fight flight or freeze

Fear of missing out

Impulsive trading

Impatience

Reactive patterns

Over trading (multiple methods multiple trades )

Beliefs

Biases

Analysis mixed into trading

the need to be right

loss aversion reactions

need to feel good about the account performance

rewiring of the poor trading brain(which is hereditary it is a poor judge of risks

rewiring our responses to fear

our reward stimulation

many other psychological trading constraints of humans like the need to look good.

Trading to full fill the ego

Personality disorder

Mental disorders (some are permanent)

immaturity

lack of adequate mental skills

revenge on the market

rage ,nervousness ,excitement

gambling addiction

depression and depressive moods/trading moods

fixed mindset /growth mindset issues

profit protecting further trade aversion issues.

Mistakes

Personal domestic issues

true self confidence

missing learning somethings

Lack of understanding of probabilities

Poor learned biases , knowledge and skills

subconsciousness learned experiences (it may be poor)

instant gratification /rewards pleasure

Draw down (trading under stress responses and many of the above risks)

Overconfidence with poor skills

Discomfort

Perfection attributes

Self esteem

risk judgement , the human brain is a poor judge of risk

predicting outcomes of random distribution

learned fears and learned responses

poor information processors

inability to handle uncertainty

cognitive biases

Plus other areas of risk

 

 

The old saying (YOU ARE OWN WORST ENEMY):rofl: The odds of success in trading are very high against the trader.

 

The other areas of risk are body related

 

tired , hungry , bored

Action junkie cravings due to boredom (good trading is boring)

 

Additional areas of risk include

knowledge ,

skills ,

system

Over reliance on technical anylysis

 

Can these areas of risks be solved by retraining ?

The last two areas of risk magnify the the mindset risks

Edited by OILFXPRO

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The mind you bring to trading has the risk of under performing or failing to trade profitably , despite being given a highly profitable system to trade.There are many risks associated with the human brain , it is the 9 inches between the ears that makes a successful trader , these areas of risk guarantee under performance

 

These 50 areas of risks include

 

Emotions (greed , fear , desires , frustrations )

stress responses fight flight or freeze

Fear of missing out

Impulsive trading

Impatience

Reactive patterns

Over trading (multiple methods multiple trades )

Beliefs

Biases

Analysis mixed into trading

the need to be right

loss aversion reactions

need to feel good about the account performance

rewiring of the poor trading brain(which is hereditary it is a poor judge of risks

rewiring our responses to fear

our reward stimulation

many other psychological trading constraints of humans like the need to look good.

Trading to full fill the ego

Personality disorder

Mental disorders (some are permanent)

immaturity

lack of adequate mental skills

revenge on the market

rage ,nervousness ,excitement

gambling addiction

depression and depressive moods/trading moods

fixed mindset /growth mindset issues

profit protecting further trade aversion issues.

Mistakes

Personal domestic issues

true self confidence

missing learning somethings

Lack of understanding of probabilities

Poor learned biases , knowledge and skills

subconsciousness learned experiences (it may be poor)

instant gratification /rewards pleasure

Draw down (trading under stress responses and many of the above risks)

Overconfidence with poor skills

Discomfort

Perfection attributes

Self esteem

risk judgement , the human brain is a poor judge of risk

predicting outcomes of random distribution

learned fears and learned responses

poor information processors

inability to handle uncertainty

cognitive biases

Plus other areas of risk

 

 

The old saying (YOU ARE OWN WORST ENEMY):rofl: The odds of success in trading are very high against the trader.

 

The other areas of risk are body related

 

tired , hungry , bored

Action junkie cravings due to boredom (good trading is boring)

 

Additional areas of risk include

knowledge ,

skills ,

system

Over reliance on technical anylysis

 

Can these areas of risks be solved by retraining ?

The last two areas of risk magnify the the mindset risks

 

All this aversion to risk boils down to one thing -- the fear of the unknown. It is both biological through genetic predisposition and psychological in learned reponses in its expression. Trading just makes it impossible to ignore.

 

Rande Howell

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In neuro-science what has been discovered is that you never experience reality, or the markets as a trader. Instead your brain takes data from your sensorial modalities and forms a virtual representation that is projected upon the markets. That is what you "see". You do not see the markets. ....

 

Thanks for refreshing this for us, Rande. Synchronistically, this recently popped back to the fore in my work with a new ‘mentee’. Growing a practice of simple awareness of one’s own unique “representations” is best seen as a process run independent of OVERCOMING - via ‘concentrating’ and ‘effort’ - all the ‘listed’ psychological problems and dynamics traders encounter ... hypothetically this ‘practice’ may be preliminary to or even independent of working with the aspects you call “belief lens”. Thoughts??

 

Traders, if you want, you can find examples of how easy it is to get sucked back into mushing the two together at ... all threads, btw, that I abandoned because posts by others (and then myself) ‘tractor-beamed’ the thread off my original intent. How quickly we in the ‘west’ are pulled off ‘process’ back into ‘goals’, etc. etc....

 

http://www.traderslaboratory.com/forums/trading-psychology/8410-edge-first-integration-first-both-first.html

http://www.traderslaboratory.com/forums/healthy-trader/16008-untitled-rant-about-trading-psychology.html

http://www.traderslaboratory.com/forums/trading-psychology/7576-flow-thyself.html

 

In essense - When you cannot intentionally be aware of your own ‘markethesia’, the only possible result is a progressively worsening and painful ‘dysfunctional markethesia’

... this 'essence' is best seen separate from any and all ‘trading psychology’ - and even separate from all the stuff with a ‘neuro-‘ prefix...

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Guest OILFXPRO
All this aversion to risk boils down to one thing -- the fear of the unknown. It is both biological through genetic predisposition and psychological in learned reponses in its expression. Trading just makes it impossible to ignore.

 

Rande Howell

 

Is it just fear of the unknown or traders have messed up mindsets with a chaotic structure?

 

I had a trader with a unstable messed up mindset.He had multiple methods in his head , mindset of scalper, discretionary trader, Elliot wave analyses, other poor analyses and counter trend swing trader .Combine above trading styles and useless analyses (of elliot waves , gann , fundamentals) with a system, a system that requires a totally different mindset, is disaster waiting to happen. Having many different types of trading styles in the mind , ends up in a mess , it is a chaotic mind structure , there is no clear structure in mind of a trading plan .In real time execution ...results reflect the above chaotic mental structure..A trader should be focused on one system and trading style, otherwise he becomes a chaotic trading three rabbits. A trader should not mix many things and trading styles, otherwise they mess up trying to be catching many rabbits at same time.

 

A trader should be disciplined and have a focused mind on one simple trading system , humans are inefficient processors of information , combine multiple methods and styles with all the psychological risks is a lethal cocktail , is a disaster waiting to happen.

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Is it just fear of the unknown or traders have messed up mindsets with a chaotic structure?

 

I had a trader with a unstable messed up mindset.He had multiple methods in his head , mindset of scalper, discretionary trader, Elliot wave analyses, other poor analyses and counter trend swing trader .Combine above trading styles and useless analyses (of elliot waves , gann , fundamentals) with a system, a system that requires a totally different mindset, is disaster waiting to happen. Having many different types of trading styles in the mind , ends up in a mess , it is a chaotic mind structure , there is no clear structure in mind of a trading plan .In real time execution ...results reflect the above chaotic mental structure..A trader should be focused on one system and trading style, otherwise he becomes a chaotic trading three rabbits. A trader should not mix many things and trading styles, otherwise they mess up trying to be catching many rabbits at same time.

 

A trader should be disciplined and have a focused mind on one simple trading system , humans are inefficient processors of information , combine multiple methods and styles with all the psychological risks is a lethal cocktail , is a disaster waiting to happen.

 

Think about what the trader was attempting to do with all that oc behavior -- trying to better control outcome. To a successful trader, all the "stuff" appears to be a disorganized mind. To the trader not willing to embrace the unknown, it seems logical and helps him "feel" in control.. He becomes locked into a particular way of dealing with the uncertainty that had worked in another time and place -- and now it doesn't. But the pattern is locked now.

 

All biological systems organize themselves to avoid the introduction of the chaotic unknown. Our cells have semi-permeable membranes to negotiate the world beyond its closed system. Learning to open that system for growth is a challenge. So it is with trading.

 

There will be many people who never transition from a deterministic mindset to a probability based mindset. These people really need to find a way to make a living more consistent with their mindsets. Trading requires a probability based mindset so that the unknown is simply part of the equation.

 

Rande Howell:crap:

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