A spoken monologue about how emotion, brain biology, beliefs, and cognition shape traders’ perceptions and actions. The speaker argues that beliefs—rooted in emotion—color how traders interpret market signals, and that successful trading requires adopting a probabilistic (quantum-like) mindset, regulating emotion, developing an observing self, and focusing on execution and risk management rather than attempting to control outcomes.
Chapters
How is your trading impacted by emotion, brain and cognition? Let's think about that, okay? First and foremost, what we really need to be able to look at is brain and emotion. Not really as something psychological at all. It's really much more about emotion is biological. It takes over psychology. It also colors mind. It colors the beliefs that allow the mind to see what it sees. Now, understand what I just said. It literally colors the belief about what you see. Now, what does that mean? Two traders, side by side, same methodology, same hedge fund, same machines, same same signal, same feeds. Both of them believe something very different about the way they manage uncertainty. They believe something in the deepest part of their emotion and they end up projecting that belief onto the phenomenon called the market. All those signals, trying to make sense of it. The market doesn't know you're trying to make sense out of it. It is, we see through a lens called belief, that belief sees out there. One of these traders has a tendency to. Not to want to lose. Okay? And historically, what happens, he doesn't. He makes money. That's not the problem. He doesn't take as much money out of the market as he could. The other trader, good friend that he is that talks trading all the time, doesn't believe that. He believes something very differently, that he has the opportunity of winning every time and he knows that he's going to lose. At the same time, he also knows he's going to win and he believes that. He believes that in the probability of his methodology, he's going to win and he's going to win bigger and more than the other guy. Now what happens is they compare results. One, a very good trader that everybody wants on their team. The other one, they keep around because he's good enough. What I want you to see here is emotion.
And meaning, belief have combined together to create thinking. This thinking in this particular case has colored what the traitors see and what they act on. So I want you to see this link between emotion, brain, cognition, and thinking. And then action. These guys are taking action and all of a sudden you're seeing it. All this is fused to the element of belief. The key in trading is you can't decide you believe something and say, that's what I believe. That really doesn't work. What works is look at your trading account. In your trading account, you're going to see with the withdrawals, with the staticness, with the growth, you're going to see an indicator, a black and white indicator of how effective your beliefs are in the management of uncertainty. That's the Trick. Suddenly you have a black and white barometer that measures these things. The truth is there's no right answer out there. There is no way to determine what's going to happen next. It's all probability. This is what the second trader knows. What he knows and believes, okay, is that everything's probability. In truth, the reality doesn't show up until the observer through those beliefs shows up to interpret. That's what he's taking action on. That's what's showing up in his trading account. The trading account becomes the barometer to how effective the beliefs are about his ability to manage uncertainty. So with you, what I'm asking you to do is take it. Looking at it, you have emotion and you have to learn how to regulate that. I teach that. There is the observer, where you learn to observe the belief systems actually in play, not the ones you want to believe. It is through the observer that suddenly the potentiality of the markets take shape. It doesn't exist until then. The observer with the beliefs that cause it to see one way or the other sees reality out there and you act on it. In Newtonian or Descartesian type of thinking, everything's deterministic. You can predict what's going to happen. In quantum mechanics, you can't. It's all probability, okay? And you never know exactly where things are. Trading forces you to take on really more the mind of a quantum mechanics rather than a Newtonian. The Newtonian though, is what we all came to believe. It's what we all want to believe. It's what created who we are today in the scientific world. The problem is it just flat doesn't work in trading. I ask you to look, take a look at your trading account and start noticing that you cannot control outcome. When you take on the mind of probability, you let go of the illusion of control. It was just a false belief anyway. It didn't work. And you take on the probability.
Of risk management, of being able to manage outcome not by determining outcome, but you manage outcome by the performance of your execution. Okay? That's when you have it. You regulate emotion. You produce the observer that has a powerful belief system that can manage probability. You bring that probability to the game and suddenly you're no longer worried about outcome. Okay? Like our first friend, what you are is you're focused, you're concerned about your performance of execution. That, my friends, that's the edge. That's what you're learning how to do. That's what the master traders know and that's the ones who keep building and building and building at Equity Curve.
