Building a Wealth Mindset for Success in Trading

How do you build a wealth mindset for trading?

I'm doing something completely different. Right up front. I'm asking you to say not a success mindset. How do you produce success in trading? I'm asking you, how do you develop a mindset about wealth that applies to trading? Most of you, if you've gotten this far in your trading journey, you know that the kind of mind that you brought to trading is not working for trading. There's something completely different. And that's something we've got to understand. If you're going to produce the kind of success that's possible in trading, you have to think in terms of wealth management rather than success, winning and losing. You have to begin to say, you know something, what is it? Is it the hard work? No, it's not. Is it the persistence? No, you have to be patient. Okay, what is it then? You know, am I determined? Yeah, but does that, does that make a wealth mindset that's effective in trading? No. First of all, the truth is that your primitive brain that you brought from your caveman days now understand is that you and I as human beings share a common ancestor with the chimpanzee. Chimpanzees are violent. They do not think very straight. Okay, they're highly effective creatures. But we have a common ancestor with them and we bring that brain that we shared with chimpanzees and other great apes, we bring that into the modern world of trading. The deal is, it's completely different. It doesn't think like we think.

You have to be able to say, you know, what is this brain really doing? Well, understand, it's a survival brain. It's looking to be able to organize you into a entity, a person that can survive short term threats and opportunities. It's not thinking long term. It's not thinking about the long game, it's talking about the short game. And in to do that, it will convince you of things that no sane person would ever think about. And that's one of the first pieces they have to get is that your brain and you are not rational. You're not a rational creature that sometimes has emotions. No, in fact, it's the reverse that's true is that you're actually an emotional creature who rationalizes.

And what you discover is that rationalization and in trading, if you haven't experienced that, I'm sure you have actually is that if you've ever sat there and sit there and suddenly you've rationalized yourself getting in a trade, getting out of a trade, you know, you've got that profit and all of a sudden you start rationalizing to yourself, you know, I better take it right now before it gets taken away. That is, that is your ape brain. That is your emotional brain. That is your, your mammalian brain. It's your social brain, okay? It's ancient. The one that we've got right now is probably 125,000 years old when we begin to really think like human beings, Homo sapiens. And it's only with this remarkable stuff that it goes through now. It's only now just developing the capacity to be able to think far beyond the jungle that we, that we grew up in. So first thing is, you have a brain that doesn't perceive reality the same way that you think you should. And yet it creates a convincing story for you to believe about why you should take certain actions and not. But it's thinking from a short term survival standpoint. It's not thinking from a long term thriving standpoint. This is the big difference. Unless you can bridge that, you're going to constantly try to push your success agenda. All that work, all that, I'm making this happen. I hate losing. I'm going to win, I'm going to make money. I'm never going to give up all that stuff that has made so many people wealthy. And they confuse that they got wealthy with being able to think in terms of wealth. Wealth is really more about long term and it's also not identified with you. One of the problems with that ape brain of yours is that it sees, it sees your performances as who it is. If you're winning, you matter. You've got power. And believe me, to have power meant that you survived. So understand you want to win from this eight brain, from the brain that you need to develop for wealth management. No, you don't need to win. Hmm, sounds weird, doesn't it? You need to perform.

Everything about trading is probability. It's not survival in the moment. Your brain creates lies of deception just to make sure that you think you've got it under control, when in fact you don't. We have a brain built for controlling the environment, controlling outcome, okay? And that's what you can't do in trading. You're not in control of winning and losing. You are in control of the mind that you bring to your performances.

That's the ticket. Now to get there you go, how do I do that? The very first thing is you're going to have to recognize you're an emotional creature rather than a rational creature and that you have, you have a friend Whether or not you like it or not, in my private work with traders, I actually have a gorilla statue that I put up on the side of my, on my shoulder and say, this is what you're also working with. And most people don't like to acknowledge that they have that mammalian brain that they bring to trading all the time. And unless you can domesticate that particular brain, it's going to be very difficult for you to be consistently profitable. Because ultimately, what you're doing in wealth management is you're becoming a really good loser. Which by the way, from a survival standpoint, your eight brain is not going to want to do at all. And what you're doing is saying, I need to be able to get rid of losers quickly so that it doesn't blow me up. I don't need to hold on to them. Yet at the same time.

That caveman brain of yours is thinking about, oh my God, if I lose, I die. And so it's going to fight to the very last breath. That's called revenge trading today. And if you see an opportunity, you have to seize it right Then it might get away. That's also your caveman brain. Okay, that's not what happens in wealth management is you're managing the opportunity, okay? And the moment that you see the opportunity is getting away, you let it go and take that small loss and you trade another day. Then what happens is that you're in watchful wakefulness rather than have you ever seen yourself as you trade.

We have an exercise in my work where I want people to videotape themselves as they trade. And a lot of them, this is what it looks like.

What you're looking at is you had already activated all the fight flight responses that are going to get you in trouble, but would have saved your caveman. So you're looking at it going, you're going to need to make friends and learn how to calm down that part of yourself if you're going to produce the wealth mindset. The first place is you acknowledge that you have a caveman brain that is deeply linked to your ancient, ancient, ancient history as a great ape. I know it's hard to hear.

And yet it's also freeing because once you realize, oh, you've got a partner in this, and he may be silent most of the time, but the moment that something triggers, he's taken over thinking and you're reacting for survival, that's what you do not want to do in trading. You have to think long term game. You know, you have to be able to take Those losses make them very manageable. And then when you have the opportunity, you let the trading, you let that peace ride. But to do that, you're going to have to tame and domesticate that caveman, that ape brain of yours so that your thinking brain can actually act in its full part. So there you go, you start there.

But that's not enough. You begin to recognize, oh my God, is that emotional brain that I come stock with from my caveman days is active in me all the time. And it doesn't sit there and just talk to me. What it does is it sits there and rests. And then when something happens, it triggers automatically reactively and shuts out the thinking brain. So what you're going to have to do is recognize first an emotion.

Is all thinking is emotional state dependent. You're not going to get rid of emotions, but you can use, you can come to the moment of where you're using them intelligently. You develop your emotional intelligence and recognize, oh, if all thinking, my state of mind is actually about managing the emotions that give rise to the mind, you begin to recognize, oh, in order to produce a wealth mindset, you're going to have to manage the emotions that give rise to the mind that you trade with. That's the performance mind. Okay, you can control that. And as you develop it so that you realize your job is performance, your job is execution. It's not winning and losing that is a big huge step away from your caveman brain. Your job is not winning and losing. Your job is execution. If you have a method edge and you have your edge in execution, you extract more capital out of the markets than you give back. But first you recognize, oh.

I need to calm down that eight brain so that it doesn't see danger or opportunity.

Short term and confusing it with long term, you want it managed so that it's calm, it's cool and you're patient, you're going to take what the market is willing to give you rather than to force the issue like an animal would. Here you go. To do that, you're also going to have to go, okay, what I recognize is, is that what is an emotion.

An emotion is a biological action potential. It's not psychological. It's wired to negotiate an agreement between you, the trader organism and the markets, the environment. And it happens automatically. That's what you have to take off. And as long as caveman and your ape brain is in charge, it's going to be automatically taking thinking offline in critical moments. So then you get it. Okay, how do I Do that. The first place is breathing. What you discover is that breath is part of an emotion. As you go through diaphragmatic breathing and slowing the system down, you slow the speed of the survival brain so that you can maintain thought as you trade. And then you produce mindfulness, because you really need to go recognize that you.

This person that trades.

Is only one particular organization of your potential among a vast amount. And what you're doing is you're realizing that you got organized in a particular way. You came through the thing, and you got born into a broken world. Your brain did its job. It organized you to survive in that world. And it just so happens that when you take that world, that organization for survival, and then take it to trading, it's going to blow up on you. What you want to do is come to the moment of where you can cool things down. Then you can compassionately act with one another to the point where you're able to recognize that the antidote to fear or aggression is compassion. It's not courage. And out of that, you begin to build the mind. You recognize that living within you is the discipline of a ruler, being able to maintain order under pressure. You recognize there is the courage of a warrior to face your fears instead of continuing to lie to yourself. And looking at the threat is out there. The threat, friends, is in here. Your. Your brain is making this up. And you need to be able to change the story the brain uses to do that. So what we've got here is to produce a wealth mind. You're going to have to calm down that ape part of yourself, that caveman part of yourself, to the point where it's not reacting. And you can actually use that thinking brain that we have been gifted with to be able to work probability. Remember, caveman wasn't about probability. He was about certainty of survival in that moment, whether or not it was real or not. So he lied to himself, deceived himself. And what we're doing is saying we can come out of the denial. You don't have to go into a recovery movement from alcoholism to do that. You can recognize that you know something. What I thought I was in control of, I'm not. And I need to come to grips with that. And I need to build a different mind that reacts to the uncertainty of life, of challenges, very differently than the one that got solved by evolution and by being born into a family system and becoming a particular role that plays in the world. What we want is for you to build the wealth mindset.

So that your caveman brain is calm. You're patient. You can see that the market's going to do what they're going to do. Your job is to say, what is it going to give me? You're not going to try to force it. What's it going to give me? And then you're going to execute. That's your job. That's the new definition of winning and losing. If you execute well, you have an edge in psychology that drives your edge in methodology. That's when you begin to extract more capital out of the markets than you give back. That's when all these promises of trading start arriving. But it is you who has to change your perception. The markets are just fine. It is you who has to change the mind about what you see in the markets that is building the wealthy mind.