How to be Calm, Cool, and Collected while Trading

You know, traders expend a lot of energy developing a knowledge base that allows them to really work a trading methodology. They work hard, they develop lots and lots of knowledge. They develop, they develop tools, okay, they do all this stuff and they feel confident that what they should be able to do, okay? And then yet all that knowledge that they've learned in a classroom that works so well when capital is not at risk, they get into trading with capital at risk, and suddenly all that knowledge flies out of the window and they go, what happened? What on earth just happened? Well, the truth is that they don't understand emotion very well. If they understood emotion differently than the way they understood it right now, they would be able to understand that all that knowledge is only useful when the emotions are under management. Unfortunately, what happens in trading is those emotions are not under management. And what happens is that the moment that they hit the risk, all that biological programming and psychological programming that was kind of hidden, pushed back in the back, suddenly arises to the front and takes over trading mind. And all of a sudden you can't get into trades. You can't pull the trigger, you can't take a loss. You just absolutely start feeding bad trades or you jump into trades. You shouldn't be in all that stuff. When in an irrational mind, you would know better. So the bottom line, at the very core, a trader really has to develop a better understanding of emotion and himself and his ability to perceive and think and act in an environment of uncertainty. The first thing is, let's start with an emotion. Okay, what do you think an emotion is? Is it a feeling? Well, in neurobiology, an emotion would be considered a biological action potential whose purpose is to coordinate activity between the organism and the environment that it's a part of. Powerful. You go, whoa, what's that all about? It's not psychological. It is literally about how the brain adapts and reacts to changes in the environment. Because at the very moment if you get that definition of an emotion as biological action potential, how does an emotion show up? Well, for vast amounts of time, what they've learned is that an emotion shows up at any moment, that there is a disruption to a standard sensorial pattern that the brain has already created. Now, out of a textbook and into trading, you would actually see that is like if you have problems pulling the trigger, it's literally when everything's fine. And then all of a sudden a trade starts taking shape. You start getting confirmation. It's at that moment that there is a disruption to standard sensorial pattern. And in that disruption, an Emotion, a biological action potential that coordinates activity between the emotion between the organism and the environment is going to take place. It's only a matter of which one. And this is when you begin to have to understand.

There is no such thing as freedom from emotion. What there is and that can be developed is freedom of emotion. Life is full of challenge and nothing typifies that more than trading, where there are constant challenges where you don't know how things are going to turn out. Okay, no amount of control, no amount of force is going to change that. You don't know what's going to happen, so you're losing control over outcome, which we kind of have an illusion about.

And ultimately then we get reactive emotions showing up. That's what we have to alter. How do you go about doing that? Because understand this, most traders lose before they ever begin. They wake up, they go through their process of getting ready for trading in a mood where either anxiety or fear is in the background and they keep trying to push it away, push it away, push it away, ignore it. And yet the more they resist that emotion, the more the emotion persists. So you begin to recognize, oh my gosh, I can't ignore because it's going to persist. And I need to really start looking at how do I manage this emotion. The emotion is going to arise and trigger anytime there is a change in status happening all the time in trading. Okay, now, now that we know what an emotion is, when we begin to look at the components of an emotion, it's what gives us great hope about being able to manage the emotion. The components are, first, there's arousal. Arousal you would experience as tightening of muscles, holding a breath, or fixation like that, looking at the screen, what you're seeing, or when you begin to feel or hear your heart rate beginning to race. What you're experiencing is the revving up an emotion, getting you the traitor, ready for action. Survival, action, okay? That's the key. You're no longer in rational mind. What happens is the emotion is growing to take you into action where you don't have to think. It's all about survival.

Now.

This is the very place that change can happen. More about that a little later. The second component is feeling. Feeling is not touchy feely. When you feel an emotion, you are literally experiencing the chemistry of that emotion in your body, in your brain. And when you feel it, it is altering the way you perceive the way you think. This is what happens when you say, well, I just got hijacked, I don't know what happened. Well, that's what's happening is you didn't see the emotion at arousal. You weren't able to arrest it or manage it. And it hit a particular trip switch and before you know it, what you have is you have feelings, chemistry in anxiety's case, cortisol, in like overconfidence case, dopamine and adrenaline, horrible mix for risk taking. Okay. And ultimately that takes over thinking. Your job as a trader is to manage that emotion. That gives rise to thinking, that gives rise to the mind that you bring into the moment of trading. That's the real key. So now we've got feeling and we've got arousal. The next part of an emotion that you really need to know about is motivation. Motivation is attack avoid, approach.

Attack avoid. Is that basically the fight flight response? And that's what all that building of energy is about. And that's what you do not want. You want to be able to notice the emotion growing, you want to manage the intensity, but you want to direct it away from fight flight into approach, into approach. That is that calm, confident, calm mind that you want for trading. You have the discipline, you have the curiosity, you're calm, you're cool, you're collective approach motivation. You've taken the same emotional energy that was growing for fight flight, but you've diverted it design wise into building a very different mind. Really powerful stuff. The fourth part of an emotion is the beliefs that are tied to those emotions, to those reactiveness, that need to coordinate activity within an environment between the organism and the environment. Because ultimately that belief is really what it's really boiling down to what you're seeing in your trading account. What you're seeing is the beliefs that you have about your ability to manage uncertainty.

Okay, Whether or not they're effective or not. If your trading accounts growing and your equity curves going up like that. Yeah, it's very obvious that the beliefs that you're bringing to the management of uncertainty are effective at trade, at managing the possibilities within uncertainty. If it's not, if it's stagnant or going down. What you're looking at is the emotions and the meaning behind those emotions. Those beliefs that I'm bringing into that moment are not effective for managing uncertainty. They're probably very effective for managing survival, which is what it's trying to do. They're triggering for you to survive and live that day. Whereas in probability mind, what you're doing is you're recognizing that this is all probability, it's all uncertainty. You have a chance of winning and losing and you're Focused on process rather than outcome. That's how the traitors win. To do that, you have to have emotional control. And that's not done by willpower. It's done by emotional intelligence. So we've gotten this belief. The last part of an emotion that I don't work with is temperament. Temperament. Is that part of that, your constitution? That is governed by genetics. And it is just beyond. You know, that's. That's way past my pay grade. But when you understand this and you start taking a look at the way to manage an emotion, to manage the mind, you realize there's two huge portals. First, you start with recognizing that you really need to become emotionally intelligent. You really do if you're going to be a successful trader. But those two corridors is literally when you see the arousal component of an emotion, you literally need to become an observer of your body and your mind. But in the body, you begin to see the telltale signs of arousal. And you can learn through diaphragmatic breathing and muscle relaxation. You can learn to relax that tension by relaxing that biological tension and also altering the breath style that you're breathing. What you do is you control the intensity of the emotion that's arising. You can actually change it from fear, which requires that kind of breathing, to calmness.

More diaphragmatic. And what you're looking at is the arousal still there, but it's managed so that you're in a zone, so that you're alert, you're focused, and you're ready, but you have not triggered your body into fight flight. You have that ability of moving over to approach motivation where you can find the coolness, the calmness, and the confidence and the discipline to manage uncertainty. It's no longer a threat to you. That's the point. So you're looking at that and you're going, okay, I now understand that ultimately I have to become smarter about the use of emotions and what they are. Instead of trying to ignore them, I need to turn toward them. And you can develop the skill sets for managing the intensity of that emotion to emotional regulation skills. Okay? And of course, we teach those as the first line of how to deal with emotions. That's got to happen, okay? It's got to happen. Until you become emotionally intelligent and really start working with the body, you're not going to have the mind that's fit to trade. The second piece, though, is, is with this understanding is that no matter how much you regulate emotion, you still only get to the door of the mind. You have to open the door of the Mind and look in and find the beliefs that are roadblocks to the development of your potential. Okay. Really important to develop that ability to observe, you have to develop a skill of mindfulness, of being stepping back out of thought, recognizing that you and your thoughts are not the same, you and your beliefs are not the same. And this person that's trading is ultimately just one potential organization of a self. And that self was organized based by a brain based on a brain that was just simply adapting you to environment.

Nothing wrong with that. However, now you need to train the brain for a new environment very different from the survival brain. To do that, you have to get into the belief systems. And the beliefs are pretty simple rocket science is that ultimately with traders, what you're confronting and finding is a sense of inadequacy. Oh, I can never win. It's always against me. A sense of not mattering. I have to make a lot of money in order to be successful or deserving. I don't deserve success. I need to work hard. Okay. Or powerlessness. And you felt powerlessness before. When you get into a trade and it's bouncing around on you and you feel like you're just being swung all around, that's powerlessness. You have to learn to manage that. And you begin to see that the beliefs are literally about. What beliefs do I hold about my ability to manage uncertainty? That's the big deal. Ultimately.

I teach a system that teaches you how to 1, Calm the emotions down and get management of them. But more than that, get much deeper into being able to repair the sense of worth you have about yourself and to be able to bring forward a very new set of beliefs. It's not based on like the affirmations and visualizations and NLP and stuff like that. Those are real surface things. But it gets at the very core of what the belief structure is that has embedded into your neural networks. That's what counts. And you see that reflected in your trading account. So you have a barometer, you have a meter. That's telling you literally just what are my beliefs about that I am bringing in to the management of uncertainty. Your trading account is going to tell you those if you're listening. These are the things that I have found that really over time produce a trader who doesn't understand why they don't have the ability of managing the knowledge base they have under pressure. Okay, the pressure of trading, the pressure of uncertainty. And those who become successful traders who recognize that. You know something, I never had control over outcome. What I have control over is the process of trading. I have control over the mind that I bring into the moment of performance. That is the sign that you begin to recognize that this is a probability based mind that you need for trading rather than a survival based mind that is very useful in other parts of your life. Come and learn more. Come to the website, get the free materials, read the articles, watch all the videos. But then start digging down. Start digging down and really asking yourself, do I really want to develop my mind so that I can trade effectively? Am I willing to pay that price to do that? It's not a financial price, it's a price up here of recognizing that this has to change. It really does. It can be done, it can be taught, but you have to be willing to be willing to do it. The question is that if you're willing to be willing, come look at the website, check it out. Let's take a look and learn. Fair enough. Take care. I've really enjoyed myself and I wish you the best. Thank you.

Sam.