Chasing the Rush: Disrupting the Root Cause of Over Trading

Foreign. Welcome. My name is Randy Howell with Trader State of Mind. And today in this video, what I want to talk to you about is over trading. What's really behind it, you know, that it's not good, it costs people a lot of money, and yet at the same time, it keeps on and on and on. Well, what I want to do today is to be able to talk about it in terms of not just a thinking problem, but also a biological problem, an evolutionary problem. We want to get to the bottom of this thing and say, what's really going on? The title of this video is Chasing the Rush. It's how do you go about disrupting this need to feel good, this need that leads to something so simple as ever trading what happens there? And I want to start with a story. A number of years ago, I'm in China speaking with this very large fund, and I have about 250 people in this very large auditorium that are listening to me talk about emotional intelligence. And one of the things that I said was, what's not allowed in trading while you trade is for you to feel good. Then it got translated, and then one guy looks at me in really great English and says, what? I said, no, you're not allowed to feel good while trading. And he says, but I like feeling good. And I said, it's fine to like feeling good after trading. You can go and find anything you want that allows you to feel good and then do it and feel good. But when you put your game face back on and come to trading, feeling good is not allowed as part of who you are as a trader interacting with the markets. And he promptly got up and walked out of the room. And I might add, several other people followed him. Now, didn't bother me. Several days later, it just so happens their, their stock market had a correction, a 2% correction. And this guy came up to me and said, Mr. Howell, I now understand why you said you can't feel good. And I said, why is that? He said, because I sat and saw beyond any shadow of a doubt that I needed to be in cash and get out of this stuff because something really was not right. But I was feeling good. And I started chasing the rush of feeling good. He said, before I knew it, I lost a lot of money yesterday. He says, now I understand what you mean, though. So now we've got it on a level where we know that biology has been disrupted. Cognition that comes out of biology, that's your thinking brain just got zonked out. But what really happened, all of you who are Alphas who think that you're going to get pumped up and you're going to make the right thing, you're going to feel good, you're going to go in there and you're going to make money and stuff like that. That is a dangerous mindset to bring to trading. What happens is that when you are actually feeling good, what you've actually done is you've taken the dopamine neurotransmitters and kind of just squeezing it, squeezing it, squeezing it, popping it, popping it. And all of a sudden what you've got is you've got a really great high, you're feeling good, you're feeling invincible, you're feeling like everything's going to go your way. It's really. Dopamine is a lot like cocaine and my God, I hope that you would not be snorting cocaine and then trading because it's going to produce that euphoric mind that has you chasing, feeling good, chasing that rush. And out of that you find yourself in some pretty bad places. So what I want you to get is this. First of all, all thinking is emotional state dependent. There is no way to trade or live without emotions. That's what they're here for. They are here literally to be able to interact with, with the environment, the markets in such a way that the organism, that's you, the trader and the environment are working together for your short term survival instincts. Okay? That's what they're there for and they've done a great job. However, way back then when there were lions, tigers and bears, there was not a stock market, there was not trading, there wasn't a concept of money. Staying alive was the capital that you were seeking. So back then, feeling good, there was, there was every reason to live past the day, feel good. What we're having here though, what we're saying is this, is that when you're trading and you're feeling good, what you're doing is you're ramping up the dopamine. And dopamine is a reward chemistry and one of the major things it does, it helps to cement pattern. So if you're an over trader and you're feeling good, what you're doing is you're hitting the dopamine. That's reinforcing the pattern that you already have, okay? That's causing problems for you getting into trades that you have no business in. Okay? So what you want to do is you want to disrupt that and you're saying, well, Randy, how do I go about doing all this? This is really incredible. Well, first of all, recognize that your brain is using dopamine quite a bit and it's forming patterns. As a matter of fact, it causes either habits, that's what we generally call them. But understand an addiction is an external agent that's being used to make you feel good. Like I would actually be snorting the cocaine rather than generating it from the dopamine by a behavior response. A compulsion is when you have a behavior that allows you to generate the feeling good. And here's really the rub. We, our brain, our right brain is going to create pattern, emotional pattern. It's going to do it. What we have to do is we have to become the master of what habits are being formed. We want positive habits that enhance our ability to survive and grow and prosper. We do not want short term habits that make us feel good right now, but set us up for failure, which is what over trading is about. So you can see that we're in this place where you're going, you know something, I thought that I could just leave my emotions at the door. No, you can't. Is emotions are, we are emotion. As a matter of fact, we don't have emotions, they have us. And until we learn to master basically the way emotions look like in the body, we don't really have a chance. What I want you to do is to imagine right now that you're, you're watching your screens and it's been kind of boring. You shouldn't sit in there, you've got your hands, you've got, you know, you got your hands under your legs, you're trying to be a good person and stuff like that. And at the same time you're getting a little bit more bored, a little bit more bored and stuff like that. And then you say, well, you know something, I'm just gonna go check my emails. And then you know something, I just may, I just may go wander over here and just look around, see what kind of what's happening in this market. And all of a sudden what happens is there's this something that's happened and there's suddenly a potential trade. Suddenly what you have is you have an object, okay. And as you're looking at that, you start noticing that one, your breathing starts halting. The second thing is the muscles start getting little tense like in my shoulders, my neck, my, around my eyes. And then what happens is that you start noticing your hands. And then suddenly you start noticing that your pulse is racing, it's bumped up, it skipped a beat, it's moving. What you're experiencing now is the emotional arousal of dopamine, okay? It is dangerous. You have already triggered the emotion. Remember, it's sitting there, bored, wants to escape the boredom. And all of a sudden it starts seeing things that aren't there. And all of a sudden it sees something there. And all of a sudden a craving starts. You know, all of a sudden you have a, I want to get in. I want to get in. I'm ready. I'm ready to make some money. I'm ready to do some stuff, man. That craving leads to fixation. That's when, if you. If you videotape, if you go and listen to me and say, look, I'm going to videotape myself and I'm gonna see what happens here. And, you know, use your phone, make sure that it's not just battery powered. Make sure it's plugged in so you can get a good long feed of this. But when things heat up, okay, I want you to notice how you get fixated. You go in and everything's like that. You're holding your breath. That's emotional arousal. You're already close to being cooked at this moment. Then all of a sudden what happens is there begins to be an urgency, an urgency to act. And all of a sudden, everything's closed down. And all of a sudden, what you've discovered is your thinking brain is no longer functioning. It's been cut out by this emotional brain who sees opportunity. Remember this is that the brain is looking when it sees an object and it interprets it as it may be. Aggression over trading is an aggressive form of expressing this emotion. Okay? All of a sudden you're seeing that and it wants to attack it. Attack it. Basically, you're looking at a woolly mammoth, you and a bunch of guys, and you want to go attack it. Because that is a good thing. It's going to help that clan of yours survive for the next month. At the same time, in order for you to actually. To actually come to a moment of saying, I'm going to risk my life attacking something 30 times my size that has a reach of 15, 20ft. And you know there are eight guys out doing this, and somebody's going to get hurt. Well, that dopamine makes you immune from thinking into the future, seeing that you could get really hurt. There are rewards. If you bring that beast down, the whole village gets to celebrate. You're a hero. You become a leadership thing. And more than anything else is you get first dibs on producing your genes into the future. A big deal. There's a lot of competition about that. Like in a lion pride, when their new male lion takes over, the first thing he does, he kills all the kittens. He doesn't want any genetics of his going into the future. So you see how hooked this in is. So you're sitting there and you've been sucked in and all of a sudden it's just not fixated. Now you have urgency and then it hits the lock, the top, and boom, you're in action, you're in motion. And you get there and you discover, oh my God, what have I done? And then, you know, that overtrading rebug kicks in. It might be a revenge, it might be all sorts of things. The traumatization occurs. And then what you've done though is you've locked in that pattern even more dramatically, either through the trauma or through, oh, what if I was successful? Oh, it locks in really big time then, because even gamblers have some success. But remember, the only thing that separates you from gambling, okay, are your rules, are your edge. The moment that you leave that edge, you're gambling. Does that mean that edge is going to be right all the time? No, it's an edge. It's an edge in life. It's an edge in taking action. It's not something that's going to happen perfectly all the time. Nobody's in control here. We're in control of the mind that we bring into the moment of performance. That's what we can control. And friends, as you go through this, as you learn how to breathe, as you learn how to control stuff, as you begin to produce a deep sense of peace where you can sit in patience, waiting for the forest to give you something, rather than going out and attacking something over trading. You become humble, you become patient. You wait to see what's going to be given. And when the moment arrives, you're ready. That's the deal. So now we've got this. And what I'm going to be asking you to do is to videotape yourself, see this in action and recognize something that all thinking is emotional state dependent. And when you're looking at your, you're looking at your trading account, the health of it, you are actually seeing a photograph of how effective the beliefs that you really project onto the markets are in being able to extract more capital out of the markets than you give back. That's what you're looking at. It's actually your best friend. Use it and start developing. The other big part of my work, if you go in and start looking at it. I'm teaching you how to build an empowered mind. Okay. It's not feeling good. That's there. It's the discipline of ruler. It's the courage of a warrior. It's the self calming of a caregiver, and it's the clarity of thought of a sage. That is when you learn to disrupt that old pattern. This is the new pattern you're building. And that is where you begin to start winning. Not winning, like all the time, all the money. What you're doing is you're winning. And by staying in your rules and over time, what you're doing is you're extracting more capital out of the markets. Okay, Go do it. Go do the video. Have fun. And really take a look at this thing. Take care. Bye. Bye.