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Rande Howell

Developing Your Mind for Trading: Building the Inner Team for Consistent Profitability

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Sabotaged by Unexamined Beliefs

 

When he puts money on the line, the trader quickly finds out about the strengths and weaknesses of the mind that he or she brings to trading. Whether you want to know about your weaknesses or not does not matter. Suddenly, risk is real and the trader’s deepest emotionally- laden beliefs surface without warning and hijack the thinking mind. Trading has a way of forcing the trader to acknowledge his emotional and mental weaknesses. In fact, most traders, until they begin trading live, have done a great job of avoiding awareness of their self- limiting beliefs. But in that forced moment of embracing ambiguity called "live trading", your real beliefs about your capacity to manage uncertainty become the submarine that torpedoes a perfectly fine trading plan.

 

The trader’s shortcomings in performance show up as hesitation, self-doubt, nervousness, over-trading, or impulse trading. These are symptoms of the problem that the trader attempts to mask without getting to the core of the problem. This is where most traders stay stuck until they learn how to examine the self-limiting beliefs to which their performances are rooted. Up until that moment of reckoning, most aspiring traders really do not know themselves very well. As one trader taking my group course put it, “I didn’t know what I didn’t know when I started this course. Now I know what I know.”

 

The Mind that You Bring to Trading

 

Let’s learn from this trader’s journey into understanding the self by following him as he begins to wake up and realize that he has to build the mind with which he trades. What he discovers is that he really needs to develop the mind that he brought to trading into a mind that can produce success in trading. It was not that he had a “bad” mind – it was just that a commitment to self-development is required to move past self-imposed roadblocks and into consistent profitability.

 

Like many people training to become traders, he had been successful in a career before trading. He explains, “I spent 25 years in the Air Force as a flight engineer for a large cargo jet. It is a huge plane with many complicated systems that you have to stay on top of – or you will have trouble. I was part of an incredibly well-trained team that flew that plane. We, as a team, were prepared for anything. As a team we were highly disciplined and confident in our capacity to keep our plane flying. If one person was having a bad performance or day, there was always someone else on the crew to support them and get them back into the mindset needed to fly that plane. “

 

“Naturally, I thought the discipline and confidence that served me so well as a crew member flying the plane would also serve me in trading. It didn’t. My discipline and confidence, developed as part of an effective team, eroded as I traded. The problem is that I held a belief that I couldn’t be wrong and I could “right” any situation – this is not the way it works in trading. Also what I discovered is that, as a flight engineer, I was part of an external team. Everybody developed certain roles that gelled into a high performance team. The problem, as I examined the situation through this course, is that there is no external team in trading. The team that has to be developed is internal. This is an entirely different animal than an external team. When I came to trading, I was not prepared for that and my trading account proved it.”

 

Developing the Inner Team

 

“What I have discovered, though, is that within each of us are the attributes required to build a high performance team. But you have to develop it. You’re not going to simply get lucky and fall into it. In the Air Force teams are built with great intentionality. Each person contributes his skills for the overall success of the team. In trading, you have to develop these parts of the self – there is no one there to do it for you. As I have developed these parts of myself, my trading has taken off. I now know what to look for and how to bring these internal resources into my working awareness. I call this my trading crew. It makes all the difference in the world.”

 

Fortunately, within all of us (as this trader describes) are powerful inherent, indwelling resources that can be developed into a high performance state of mind. But how do you go about developing the mind that trades?

 

A New Understanding of the Mind

 

First, the emotionally intelligent trader discovers that his mind is more nuanced and complicated than he initially thought. What he discovers is that the mind is not just a place where “his thoughts” occur. Rather it is better understood as a committee, or a board room, that is populated by various competing forces. Each of these board members of the committee comes to the meeting with an agenda and direction where they want to take the "corporate self".

 

In the undeveloped mind of a trader struggling to become consistently profitable, the dominant “board members” are destructive in nature, while other less-dominant "board members" are fearful that change will result in losing what they have. If you have ever experienced self-doubt while trying to pull the trigger or have gotten out early from a trade fearing that you were going to lose money, you have experienced these members of the self as they control the committee of the self – better known as an undisciplined mind.

By developing emotional regulation skills to calm the body and mind, mindfulness can then be used to open the door of the mind and examine both your thought life and the beliefs that drive your trading. And what you discover is that you do not have thoughts and beliefs – they have you. And in your blindness to their influence, they have been running your trading mind, and your trading account, into the ground. By learning to discern these different elements of the self through mindfulness, a great opportunity for the re-invention of the self becomes possible.

 

Taking Charge of the Mind

 

In the same way that there are destructive elements of the self – there are constructive, empowering parts of the self. This is simply the nature of our humanness. But they have to be awakened, fed, nurtured, and developed for them to become an active (and vocal) part of the committee of the mind. As you develop mindfulness and apply it to trading, what you discover is that you, as chairman of the board of the trading committee of the mind, have been asleep – not tending to the business of developing the mind as a trader. And because you, as an observer to the mind, have been asleep (not knowing to be awake), the trading committee of the mind has drifted without leadership and is not on course.

 

In waking up the Observer of the Mind through Mindfulness, the trader discovers powerful constructive elements of the self. He discovers inherent indwelling resources that have been waiting for him to wake up and develop. These are what Carl Jung called the empowered side of the archetypes. These archetypes give form to the various emotional forces at work in the mind’s trading committee.

 

In the same way that a trader experiences the fear of the Orphan or the judgment of the Inner Critic at moments of uncertainty, an awake trader also (by being human) has potential access to the discipline of the Ruler, the courage of the Warrior, the self-soothing of the Caregiver, and the impartiality of the Sage. Notice that each archetype (i.e. inherent, indwelling resource) has an emotional signature.

 

This is important. This is where the modern science of Emotional Intelligence intersects with the theory of life as a journey into human potential of the Archetypes. Each Archetype (member of the trading committee of the mind) has an emotional signature that can be used to create the emotional cocktail that leads to the peak-performance thinking required in successful trading.

 

The Mind is Developed, Not Found

 

If left to its own devices, the mind will drift in the historical adaptation to which it was born. This is where most traders stay stuck. They never come to grips with the notion of developing the potential that exists within each of us. In their blindness, they keep looking “out there” for answers to their trading woes. They look for an external team to plug into, rather than developing the internal team of the self. But by bringing a different Observer to the trading committee of the mind, you find a very different potential for what the trading mind can look like. We all exist as potential that is limited only by the Observer that we are.

 

Learning to develop the Observer of the coming and going of thought in the mind, recognizing that we are not our thoughts, allows you to de-construct the old committee of the mind showing up in your trading as self-limiting beliefs - and to rebuild it into a mind for consistent profitability in trading. This is the challenge that has to be overcome. It is your mind that trades. Its potential can be developed. And trading makes re-development unavoidable if you are to become consistently profitable. It is your life and you, and you alone, are responsible for the mind you bring to the invention of your life. Embrace it.

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Guest OILFXPRO

Traders are not born with trading skills ,the skills have to be developed.In sports players practice to perfection and train to the highest standard.The trading game is played in the mind of the trader , the trading mind has to be developed.

 

Is the mind developed by practice and training ?

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Traders are not born with trading skills ,the skills have to be developed.In sports players practice to perfection and train to the highest standard.The trading game is played in the mind of the trader , the trading mind has to be developed.

 

Is the mind developed by practice and training ?

 

Mind is re-adapted by understanding how right and left brain work together. Most of the training traders go through is very left brain oriented with no right brain training. And they end up trading with half a brain -- their left brain. Right brain determines the emotional state that thought will spring from -- and we erroneously believe we can push emotion away. It is this part that has to be retrained for consistent mind for trading.

 

Most practice in a way that continues the bad training.

 

Rande Howell

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