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Rande Howell

The Saboteur in the Mind

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“There is someone in my head, but it’s not me.” Pink Floyd


Have you ever noticed all that idle chatter going on in your mind while you trade? Have you ever taken the time to listen to it? I mean really listen to it. Have you ever connected the dots between it and the success or failure of your performance in trading? This running commentary in your mind is so ubiquitous, so commonly familiar, so ordinary – that most do not give it a second thought. In their blindness they think, “It’s just me and my thoughts.”


Yet, when it comes to crunch time (like the mental and emotional readiness you need to pull the trigger, or maintaining emotional sobriety while in a trade), the seeming harmless self- talk that you simply pushed away or ignored moments ago roars like a lion in hot pursuit of its prey – you. Meanwhile, you keep believing that if only you could push those pesky thoughts out of your mind, you would be able to break through the barrier that separates you from consistent profitability.


But at exactly the most critical moments in your trading, this background noise in your mind keeps suddenly erupting into a tirade of self-doubt or temptation, judgment, blame, or fear. How can something that is supposed to be so familiar and harmless rise up and become a tidal wave that sweeps your trading mind away?


Well, just because it so common that it attracts no attention does not mean that it is harmless. What is important to realize here is that you, as a trader, do not understand the power of the internal dialog or what comprises this narrative in the mind. That lack of understanding shows up in your trading account in the form of losses or the loss of potential profits every day until you come to a very new understanding about what is actually going on underneath the hood of your mind.


Thoughts Set the Stage of the Internal Struggle


First let’s make sure you recognize an internal dialog that is, in fact, going on in the mind as you are attempting to follow your trading plan in the midst of a trading performance. When a trader commits to a trade and the order is filled, often a wild ride ensues – almost like a roller coaster ride with no safety equipment to keep you in your seat.


Initially in the uncertainty of the trading environment, the trade is bouncing around in a flux that rattles you. You begin losing your composure. Thoughts of the trade going against you (and you losing, again) begin to overwhelm your untrained mind. By the time it begins to trend, you are so exacerbated that you jump out of the trade because now your fear of missing out of even a little profit has so consumed you that you cannot think straight. You’re just happy to have grabbed a little profit, rather than another loss. Then, after you get out of the trade with only a skinny profit, you watch the trade trend and take off – just like your trade plan had indicated. All that planning, all that charting, all that knowledge of trading - down the drain again.


If you have experienced this scenario, you have been on the losing end of the internal struggle that goes on in the mind when it is challenged by uncertainty. The dominant thought pattern that has taken over the mind is usually, “What if I lose?” or “I’m going to lose” or “I always mess up in the clutch” or “Who said that I could trade successfully?” Trying to force yourself to not hear these thoughts, or voices, in the mind by acting as if you are a tough, seasoned trader does not work. You can’t "fake it 'till you make it" in trading. You truly have to develop a mind that is built to embrace uncertainty – not fear it.


Linking Brain, Emotion, and Thought


Let’s take a look at what is really happening in the brain and mind as this cacophony takes over the thinking of the trader’s mind. The brain’s job is to adapt us to survive in whatever environment it finds itself. It does this by creating programs that keep the organism (that’s you) alive. Once the program produces success in dealing with the environment, it becomes embedded into the neural circuitry and begins to run automatically totally out of the awareness of the conscious mind. It then operates out of pattern recognition and simply reactively “pops up” when circumstances trigger it (trading offers countless opportunities for this to occur).


This is how the brain links emotion and thought. An emotion (defined as "any disruption to a standard sensory pattern that the brain has already created") erupts to control the kind of thinking needed to solve the problem in the context of the environment in which the program was created. Usually this emotional program is created during the formative period of the brain/mind – a period when mature problem solving skills have not yet come on line. It becomes locked in and is triggered reactively. This does not bode well for traders.


Initially these programs are simply wired into your perceptual repertoire. These guide your responses to environmental cues (think avoidance of danger and uncertainty). This is called adaptation. However, if the programs become successful over countless generations, they are burned into the DNA. This is called instinct. And how do you experience these programs? As voices, or narratives, in the mind. These programs show up as the seemingly idle chatter going on in the mind. Most of the time, they appear harmless enough.


Uncertainty and the Brain of the Trader


However, adaptation and instinct collide in trading because the emotional brain (the one that controls the kind of thinking you do) does not distinguish between uncertainty and fear. All neural programs are wired to create patterns of avoidant response when stimulated by perceived threats in the environment. And the trading environment, due to its rooting in the management of uncertainty, is going to trigger to fear-based programs. Hence, both instinct and adaptation in the untrained mind create a perfect storm for losing your emotional sobriety while attempting to manage a trade.


And how do these neural programs show up in your mind? They appear as the internal dialog or voices in the mind. Thought becomes the voice of your programmed beliefs about your capacity to manage uncertainty. And remember, the brain does not distinguish between uncertainty and fear. This is something that has become instinctual, burned into our DNA, as a successful solution for a greater probability of survival of both the individual and the species.


So…this idle chatter that you may not even be aware of most of the time or that can become pesky at other times, is, in fact, the tip of an iceberg that lays out the blueprint of how you react to environmental stressors (like managing a trade). And the programs were created in a time when your brain was not developmentally mature and could not make the kind of decisions it is capable of now. This is what is running your trading mind as you trade.


How Does This Apply to Trading?


In his book “Incognito” David Eagleman, the neuro-scientist, describes these programs established by the brain as a rivalry of equals. In the generation of thought from neural behavior that describes the relationship between brain and mind, these programs show up as thoughts, voices, or narratives in the mind. Most are developed through adaptation as a successful response towards survival and become residents of the unobserved mind. And these programs, working in the background of an untrained mind under the stress of trading, take over the rival of rational thought. Your brain, whether you like it or not, creates a community of rivals. Your job as a student of trading will be to re-organize this community into an effective team for managing the uncertainty found in trading.


Another way of describing this situation from a psychological perspective is that the current organization of the rivals of the mind is the baggage that you bring to trading. Fortunately, the adaptation to the avoidance of the fusion of uncertainty/fear can be re-developed through the application of emotional regulation, mindfulness, and the examined development of other internal resources that have been burned into our DNA.


Until you learn to regulate the triggering of these emotionally-based programs that give rise to thought, you do not get to the door of the mind. You stay hijacked by programs the brain has already established when you perceive threat. Once emotional regulation is a working skill, mindfulness can be developed so that you become aware of all the rival programs showing up as thoughts or voices in the mind. And you discover that you and your thoughts are not the same. They are simply programs running you.


In applied mindfulness, you develop the talent of choosing which rivals run the thinking of the mind. This is the personal development that all traders need to embrace. This is the internal discipline needed to organize the rivals in the mind into a state of mind that embraces uncertainty and probability. This is the journey that trading demands to become successful.

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What are your thoughts on right brained v left brained being an advantage/disadvantage in trading?

I would have thought that the dialogue going on in our heads would be influenced by which camp we are in.

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What are your thoughts on right brained v left brained being an advantage/disadvantage in trading?

I would have thought that the dialogue going on in our heads would be influenced by which camp we are in.


In our culture not much emphasis is placed on the intuitiveness of the right brain and much is placed on the analytical left brain. While we never learned to manage the gifts that the right brain can bring, they can become a liability in most trader's performance. It is the right side that can read emotion while the left side can analyse the structure of that emotion. This is what you see in really good traders. Jill Bolte Taylor and her book, Stroke of Insight, really turned me around on this. As a celebrated neuro-scientist, she had a stroke that wiped out her left brain and left only her right brain for perception. They are now reintegrated, but they are partners now, making a much more nuanced human being. In trading a client of mine, Christopher Castro-Viaho (sometimes I get that spelling wrong) has the same sort of right brain, left brain synthesis. Not only does he analyse, but he also intuitively "smells the blood". His major job was to learn to trust this part (his right brain) and make it a member of his trading mind. The results have been impressive.


I believe you can be profitable without the right brain's contribution to the trading mind, but, add skilled intuition, and the competency of the trader really goes to a new level.


Rande Howell


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Your comment fits very well with my experience being right brained,both in trading and in designing methods.In the early days the right side would make bad trading decisions and had no discipline.Interestingly the left side would be voicing an opinion but the right side would completely ignore it.It took a long time to resolve this,but finally the left side said look.do you want to keep on losing or what?

If i could use music as an analogy,it is better to lay down an identifiable rhythm and melody and then improvise when appropriate.The more experience you have the more you can trust your instinct.It is at that point that the right brained side really comes into it's own.


One thing that made this process even longer was once the right side had been consigned to the doghouse it was reluctant to be itself,So on occasions,when it "smelled blood" the left side kept it reigned in.Eventually when the left side saw how many opportunities were being lost it too got taught a lesson and since that time they appear to be working in harmony.:)

Though it's never a 50/50 relationship,i would guess it falls into the cliche 80/20 category.


Who would have thought that Rande and mitsubishi would find some common ground....?

Now don't get carried away folks,it's still an 80/20 thing:)

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My view on this is that "it" is largely a matter of maturation.....that is to say, those who have matured sufficiently that they understand and accept the complexity of the world around them are likely to A) be able to tolerate the tension of not knowing (temporarily) whether a trade will win or lose and B) will also be able to tolerate the tension associated with delayed gratification as they try to hold a position until it is terminated with a profit or loss.


For those folks (displaying adult self-esteem) this is simplified by the fact that they were raised correctly (also known in developmental psychology terms as "good enough" parenting")...and they display the ability to adapt where others of us, have to either learn by hard experience or perhaps fail and find other less emotionally taxing methods of earning a living...


What I like about this is that is does not require me to generate and work with the needless complexity of architypes and all the associated paraphenalia....and once you understand it, you can simply move forward....you see once you obtain (internalize) this understanding of what it is that you are feeling when you trade, you can choose the path to correcting that deficit....as an example, good results are often obtained simply by incorporating a variation of stress training as mentioned in Brett Steenbargen's books...


Not to suggest that the study of architypes won't work, it may...so might praying or voodoo ritual, or exorcism for that matter...

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To steve46


I often find myself scratching my head when I read comments from you.


In your comments you make reference to certain groups of attachment theroy types and the environment from which they spring -- so we'll start there. "For those" and "those" that you refer to in your comments are incredibly small subsets of the world of humans -- of which you may be a privileged minority. In John Bowlby's and Mary Ainsworth's notion of "good enough" parenting style, less than 10% grow up and adapted to such an environment. In Mary Ainsworth's "Strange Situation" mountain top experience, it was discovered that the vast majority of people would have no cue what secure attachment style is. Reactiveness was the norm rather than "good enough". Having practiced as an attachment focused therapist working with really difficult populations (even today in trading), I can certainly appreciate the truth of their findings.


These are the same proportioned numbers who come to trading also. Reactiveness to fear, either by avoidance or pushing away, show up in people's trading every day. A number of very successful traders also have a disconnect in their capacity to be aware of and process emotion -- it is called high functioning autism. It's actually a great trait to embody for a profession in trading. I don't know if I would try to relate to the rest of the folks who are trying to learn how to manage emotions if I were a trader some where on the spectrum though.


I certainly encourage people to explore other providers of psychological development in the arena of trading. I currently have 2 clients working with me who have been presenters of one such guy who also teaches how to trade. Go figure. I don't think you understand Emotional Intelligence or its connection to Jungian archetypes. Archetypes are neural programs, first adaptive in nature, that have proven successful over evolutionary history and have been burned into the DNA of our humanness. Each archetype will have a feeling component of the archetypal emotional grounding. It is this feeling element of the emotion that creates the kind of thinking that is associated with the archetype. It is biologically rooted and is burned into DNA. It becomes your choice to develop these aspects of your brain/mind's repetoire or not. This is what I call "taking control of the community of rivals in the mind". You are going to have programs wired into your neural circuitry that compete for control of the thinking mind. I prefer to have a language that allows me to understand what is actually going on in mind and be able to manage it. Most traders, in their journey to consistent profitability, seek this understanding.


Good luck with your trading and better luck still with trying to teach your students how to develop the mind that trades. I have no doubt you can teach a person to trade, and I have a lot of doubt that your methods teach "the rest of us" how to build a mind for trading. And I hope I'm wrong. As I've traveled this journey, I have found very few teachers who can get their heads around the trading mind -- and fewer still who acknowledge this self development aspect of trading has to be taught alongside methodology. It is much easier to stick to methodology and ignore the need to develop the mind that trades.


Rande Howell


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I like this is comment from Dr. Amanda Morris at the National Institutes of Mental Health


"Emotional Regulation refers to an individual's ability to modulate emotional responses across a variety of contexts. In young children, this modulation is in part controlled externally, by parents and other authority figures. As children develop, they take on more and more responsibility for their internal state. Studies have shown that the development of ER is affected by the emotional regulation children observe in parents and caretakers, the emotional climate in the home, and the reaction of parents and caretakers to the child's emotions."


Clearly the ability to regulate emotion is a pre-requisite for successful participation in this profession (trading)...I may not have a PhD in Psychology....but as I recall, neither do you sir. so in this circumstance I feel equally well prepared to provide an opinion as to what "really works".....


As to whether the ability to regulate emotion is best obtained by Jungian therapy or by simple stress training, that I think remains an open question, but I would maintain that at least some folks (for example those who experienced "good enough" parenting during early childhood) will have an easier time learning this seemingly difficult to acquire skill...and those are the folks I prefer to work with....


I hope this simple explanation doesn't offend the many orphans and derelicts that abound here at TL....:)


Best Regards


Edited by steve46

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I am very much in agreement on the necessity or at least the desirability of left brain/right brain coordination as an ingredient in successful trading. there is a great deal of empirical evidence to support feasibility of training the two aspects of our "logical thinking" to work together. In my case, I found the mindless chatter to be independent of the logical aspects of my thought processes and directly related to insecurities and other characterlogical aspects of my person-hood. Understanding that these thoughts were not my basic person-hood opened the way to controlling their effect on my decision making process. Hence understanding the nature of "mind clutter" is crucial to having the clarity of thought process necessary for making good trading decisions. I think this is a great article and I am glad to see such quality of thought and writing in traders Lab.

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Unsolicited :spam: Plug


Archetypes - In tales, they can be taken into the forest and abandoned… they can be stunned into latency by spells and potions, etc etc…

Archetypes - For each (type of) human activity we humans carry out, there is a constellation of best focus of attention, body flow (or lack of it), neural processing, emotions, attitudes, (and if we must,beliefs) we bring to that activity.


Steve46 mentioned maturity. Archetypal expression is typically developmentally / stage / age specific to a high degree. Yet, as templates for our humanness, it is possible to access and express them to some (and even full) degree at any age. For example, it is possible for a young boy or girl to bring forth genuine acts of warrior or parenting or … – not for long – but the point is, ‘it’s’ in there.


Otoh, whether the trader is “mature” or not, it is also possible to be blinded to / blocked from access to one or more of these archetype pal constellations. ‘It’s’ in there – but for many different reasons, one can’t get at it, experience it, express it, in a consistent and reliable instrumental way. (Re &) Establishing availability of and connection to a set of these context specific strengths is Rande’s work.


This way not for everyone. …And it’s equally important to say - it is indispensable for some if they are ever to thrive as traders! In my experience, the best traders, the anecdotal ‘Wizards’, do not need or avail themselves ‘coaching’. But many ‘very good’ traders and below could profitably avail themselves some ‘coaching’.


Protocol prerequisites: (imho)

> blessed with some imagination (at least a 2.5 on a scale of 1 -10 )

> willingness to (learn to, if nec) be with and fully experience emotions. One constraining ‘trap’ that holds many ‘rationals’ back from such work is seeing it as simply emotional “control” or even emotional “modulation”. That is a very limiting, 'mind bound' view of ‘sympathetic’ arousal processes, etc, etc… sophomoric at best.

> … and closely related – some courage… mostly courage to delve in before you have any confidence, courage to regress, and courage to persevere when a behavior doesn't supply immediate and obvious success.

> imo, those entering should make a minimum 6 month commitment. The work is developing ready access to +4 ‘main’ and +2 ‘minor’ archetypes. Generally, for most individuals, within a period of weeks 60 - 80 % of the whole will fall into place via pre-existing ‘competence’ / access . But the remaining percentage will be shadowy and require more intensive, guided work… ie one of two of the members of the ‘inner archetypal trading team’ will require extended, individualized work to really get a reliable integration

… individualizd processes and challenges… and so individual requirements and results will vary….



All the best,



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