A short interview with trading psychologist Randy Howell about overcoming plateaus in trading performance. Howell argues that deep belief structures and fear (the brain’s response to uncertainty) underlie stalled progress; he recommends breathing, applied mindfulness, and confronting—not suppressing—fearful thoughts to regain emotional regulation and advance to the next level. The clip closes with credits to themoneyshow.com Video Network.
Questions this video answers
Randy Howell (trading psychologist).
"95% of traders lose money."
Chapters
Well, as traders, we all want to achieve as much success as we can. But at some point you may reach a plateau or you can't figure out how to achieve that next level in your trading. Our guest today is Randy Howell. He's a trading psychologist. He's here to talk to us about that. Randy, thanks for being here.
Thank you.
Well, what is a trader to do if you've reached a plateau and you can't seem to get above a certain point in your trading success?
Well, the first thing you have to do is you have to start looking at your belief structure, because ultimately, what trades is your beliefs? What, not the ones that you want to have, but the ones that are deep inside. And you begin to say, what is it that's actually producing this phenomenon of my trading, particularly with fear?
If I'm a good trader, I know I have good strategies, but I just, I'm hesitating maybe to execute trades or I can't seem to achieve the dollar amount of gold that I want. How do I get to that next level? How do I jump to the next level?
You come to a moment where you begin to understand the fear that drives it. Your neurobiology is all about fear. It's produced a tremendous species, us. But also what it does is it limits us. And until you recognize that the brain cannot tell the difference between fear and uncertainty, you begin to click. What happens when you're trading? When you're trading, you hit uncertainty. Your brain reads fear, and all of a sudden it locks you into a particular perceptual map, a way of viewing the world that locks you into a perceptual map and a way of trading. And you're stuck and you crash.
All right, so if I can recognize that's happening, how do I. Are there exercises I can do or mental exercises that can get me past that?
Oh, absolutely. You know, in any really good emotional regulation program, what you're going to find is breathing, the first thing. Breathing is a really phenomenal aspect of our being. It is both volitional. That means you don't have to worry. You know, you can sit there and you can breathe. And it's also autonomic. When you go to bed tonight, you're not going to have to worry about breathing. However, breathing also controls heart rate, which is as you get scared, fearful, stressed, it starts accelerating and triggering a whole cascade of chemical reactions in your body. It also controls the amount of oxygen to your brain. And if you're in fear, that triggers from uncertainty, you have cut off oxygen supply to your brain and you have accelerated heart rate and you are in fight flight.
It sounds like maybe meditation or something, which I hear some traders do works.
Oh, absolutely. I think you need a very applied form of meditation. I would call it mindfulness. You become mindful of the thoughts running in mind and you begin to recognize that you and your thoughts are not the same. This becomes a very powerful moment where you, it's like a door opens to you to be able to move to another level and you begin to be the designer of those thoughts. Because you can look at the thoughts and you can back to the beliefs and then you can confront the beliefs and you can re decide and you can rechange who it is trading.
And so should I then just stop trading for that moment, kind of gather my thoughts and push those bad thoughts aside or those fearful thoughts aside and try to come up with good thoughts about trading?
Well, first of all, it's dangerous to me to push those bad thoughts away. Those are the very ones you need to confront. Those are the very ones you need to confront. Until you confront them, until you reorganize them, they're going to stay in the background of mine. And when in stress, when in worry, they're going to come forward and they're going to take over and hijack your thinking process. All thinking is emotional state dependent. Until you can manage the emotional state, you cannot manage thinking. And if you want to see that, you know, there's the old axiom of 95% of traders lose money. There you go. 95% of dieters gain their weight back. They can do behavioral change, but they can't change at the phenomenal level of literally your core being. And until you get access to that, you can't do it. Breathing, mindfulness and beginning to access instinctual potentialities within us, this inner strength that lies within us. It's going to be very difficult to win successfully to get the edge to trade.
