How to Recover and Grow from a Big Loss in Trading

The broadcast is now starting. All attendees are in listen only mode.

Welcome, everyone. My name is Randy Howell and I welcome to you to this webinar tonight. First things first, though. Can any. Can you guys hear me? Just type in a yes into the question box. And I would really appreciate that a few of you. Yes. Thank you, Bruce. Thank you. Thank you. Okay. This is actually a little bit different than I normally do in the topics that I go, but I really. Recently I've had a couple people.

Say, Randy, I have gone through all your material and you've never talked about taking a big loss and how to handle it, and darned if they weren't, right? So. But the thing is, taking a big loss also requires a lot more than just typical trader psychology learning some, what some people have referred to as cheap Jedi tricks to keep the mind stuff, it actually is a response to something overwhelming. So we're going to be talking about that. What will happen in here is I'm going to do a presentation and it's going to be a little shorter than my normal ones. What I want to do is I want to leave enough room for you to ask questions and actually talk, or will question figuratively talk on the box. The key is that we're going to be exploring a more time lapse view of taking a big loss and how you go about not just recovering, but growing from it. Okay, so with that, let's see, have I left anything out? I'm going to answer the questions at the end. But please, please, please, as we come across this, if you have a question, go ahead and put it in the, in the text box. I mean, in the question box. Yeah, type it in. And that will allow me to. When I finish my presentation, I'll have questions right there to start with, and then things can keep moving. So first off.

Why on earth does big gloss shake you to your very core? And the truth is.

All of us humans really like to believe we get so identified with our thinking brain, that neocortex that allows us to think, have languages and all this kind of stuff that we don't even recognize. This primitive emotional brain, the limbic system that I also call caveman brain.

What has to be understood about your caveman brain, it does not understand money at all.

It sees money as a representation of power and it sees a big loss. Understand the caveman, understand our ancestors were hunted down by other predators. And to take a loss to caveman is to be somebody else's meal to be consumed. Of course you're going to fight for your Life you are to caveman brain. Now, caveman has no clue. If you gave it a bushel of money, caveman would look at it and maybe use it to burn in fire.

However.

When you're experiencing a massive loss, a large, huge hit, you are. You're not only shaking it to the foundations, but what you're doing is you're activating your survival instincts governed by your caveman brain. And there's other psychological stuff that really need. You need to train yourself out of, but you've already put the alert on, and it's all rock and roll after that. So understand, we are talking about evolutionary psychology, okay? Not wanting to lose or want to make a lot of money fast. And we're also talking about the psychology we developed in our family of origins and our cultures, circumstances, and all that stuff. But understand, we are set up for failure when we walk into trading, because the brain you brought to trading simply is never going to work.

In this world called trading. It's not. It has to have some changes, and it has to learn a lot of difference about what winning and losing is in the area of trading versus winning and losing to your caveman brain. So you got it. Now let's look. Let's look at it this way. We're still sticking with this theme of caveman because it's powerful. When you take a big, huge monetary loss, what happens right there, right there, it's the core of your being is being crushed. And this is. You are triggering. You are triggering your evolutionary psychology. Not only does it want to win, which was a challenge back then, because we were. Understand, we were not. This is a. I actually think this is a movie from like 10,000 BC. We were much smaller beings back then than we are now with the high protein type diets we now eat compared to what we did then. But what you're looking at is the saber tooth tiger is a symbolic representation of your death. So if you were to take a loss, if you were fighting this tiger, what you're doing is you're saying, you know something, there's a good chance I'm going to be crushed. And you can begin to see how your survival instincts take over. You know, in the midst of this, your survival instincts take over and your mind, your thinking mind is no longer functioning.

It. It looks like this right here. Now this is what I, in psychology and the kind of work that I used to do, we called when something really there was a big, huge loss. There was a big, huge, dramatic traumatic event that was called an acute stress incident. Okay? And in those moments, and by the way, you call it acute stress incident for 30 days. And that's how long it takes memory to consolidate into hippocampus and it becomes ptsd, Post traumatic stress disorder. And I work with a lot of folks who recognize that they have post traumatic stress from when they've lost big. And I've worked with people, one in particular I'm thinking about right now lost $15.5 million in five minutes. So you can begin to see it's shocking. And what happens is that on the, on the, on the left side here, you're looking at low emotion, calm states and stuff like that. And, and you're actually having information, neural information coming in to the brain. And then what happens is it goes into the, into the neocortex and you start making rational decisions. However, when you hit a critical stress incident, that's not what's happened. The moment that the brain interprets an emergency as really danger, a threat, a biological threat to life, what it's going to do is it's going to disable all information going to the thinking brain. And you are on instinctual caveman brain at that particular time. Amygdala takes off and you're, you're in fight flight. I can't tell you how many people I've worked with that. What, what happens with them. They take the loss and they hate losing. Okay. They come into this game of trading, I hate losing. And you know, it's, it hit a soft stop, you know, and he's looking at that and he starts fighting back. And I'm not going to lose. I'm going to turn around. It's going to turn him. You're fighting for your life and you're not fighting with the neocortex, a higher cortex on your side, man, at this particular time. It's off, it's off. You're not, you no longer are in your rational self. So this is what is happening. And what we want to do is say, okay, how are we going to deal with this? We know if you have an incident, big, huge loss, that your caveman thinks it's being attacked by a saber toothed tiger. And the caveman in you is fighting for his life. He doesn't want to lose. He's willing to do anything, take more, throw good money after bad, all the way down. Because if he loses, he's going to die anyway. He's not losing money, he's losing his life.

So we're getting that. And how are we going to, to be able to Start working with this acute stress incident that we've just had. That's what, that's what we want to call. That's what we want to call this big loss. It's an acute stress incident. And by definition, your brain is overwhelmed. You know, some people, I have a friend who. Some people are in his room. And Mitch is one of the better traders in the world and he has that big massive trading account to prove it.

He's, in the last several years, he said, made somewhere between 2, 200 and $300 million. It's not unusual for him to be down a quarter of a million dollars. He's even lost quarter of a million dollars on a particular position. But if you look at him, he's pretty carefree. He's pretty carefree. What happens is that thinking brain stays active and it's never deactivated and disabled by the threat of potential biological threat. He's learned how to move past that. And it took him, that took him about a quarter, about three quarters of a million dollars to figure out how to do that. But what we want to do is say, let's start and say, just say if you pull a memory up of a time you've lost big. Okay, what I want you to do is take a picture of that and I want you to say, okay, the very first thing is what I want to notice. Uh, oh, this, you moved too far.

You still move. You got. No, I'm good, I'm good, I'm good. What happens is that what we really want to do right there is notice that you're. Your body will have been seized by survival instincts. You will not be breathing. You will be holding your breath or you'll like that. You will have tense muscles all over the place and you will go into just tremors where, you know, you've taken the sloths and everything. Everything's there. If you allow yourself to continue holding your tension that way and holding your breath or panting, what you're going to do is you're going to look like this guy over here on the left. You're going to force the emotion to get bigger and bigger and bigger till it becomes very overwhelming and you truly move into acute stress incidences, okay? And you are overwhelmed and you might not be in control for a while. So the very first thing that you train yourself to do is recognize the biology of emotion. If you have been around me for a while, you know that I teach as a fundamental skill bellows breathing or diaphragmatic breathing. Why? Because if you breathe into your Belly first and then into your chest. What you're doing is you're building a richer oxygen supply that gets to the brain so that it doesn't go offline so fast. And you're holding your breath. There's not enough oxygen. And the brain doesn't want oxygen in the brain anyway. It won't fight flight. So you are altering the intensity of the feeling of loss, the feeling of anger, the feeling of revenge, all that stuff that's going on at a loss. And you're altering the ability for it to overwhelm you so that you can maintain emotional sobriety. It's essential. And how long are you going to have to breathe? How long are you going to have to sit there and say, you know something, I want to cry. I want to punch walls down. I want to do this. I want to scream. I want to. And now Randy's telling me I need to breathe. I am, I'm telling you, not just breathe, but breathe diaphragmatically. And what you're looking for is that generally when a person goes through an incident like what we're talking about, whether life goes before them and all that, you. You're going to be breathing for a minimum of 15 minutes. There's a good chance you're going to be breathing on and off in a diaphragmatic way, oh, for two or three days. What you want to do is you want to stop the way the memory is being encoded from the incident so that you don't end up with something similar to ptsd. So the very first thing, you learn to breathe, and you don't stop breathing diaphragmatically until you feel your body release. That doesn't mean that you're going to feel good, because we've opened up a whole can of worms here, and we're going to be talking about this is a process.

And this is the first step to get control of the intensity of the process that you're going to have to be able to go through to be able to take advantage of the opportunity that this big loss is going to give you. I know those are stinging words, but ultimately.

What you have done is you have brought beliefs into the action of trading that simply are creating a mismatch between you and the trading gods. This is where you're going to have to actually go down if you want to learn from this incident. You're going to learn how to actually change the beliefs that you have about your ability to manage uncertainty on a very fundamental level, because otherwise your need to make money or Whatever you're doing it for. And that's all grouped around mattering worth.

Competency and lovableness, believe it or not. And you're recognizing. Okay, I know that ultimately this big loss is telling me that there is a major snafu in my trading psychology. It's showing me that. But first, to be able to learn from that, I'm going to have to use emotional first aid and calm this thing down so it doesn't sweep me away to God knows where. So that's the first thing. We've got an emotional first aid going. And we need that because otherwise that brain is going to overwhelm you and there's no telling where it's going to take you. It hurts. There's no doubt about it. But I can if you. If you're breathing through pain.

A while back when I was getting a heart transplant, they actually did a procedure on me where they had to stick something into an artery without any painkiller. And there was enormous pain. I mean, it was just so painful. But what happens is I had the capacity of maintaining it. Again, it did not feel good that that neural information. As much as I tried to convince that neural information that it was not a pain signal, that was just neural information, I was going to interpret it differently. It still hurt hard. It was the breathing that got me through it and keeping to relax my body. But after that, it's over. What are you going to do? The very first thing, and this may be really hard. There are. There are very few, particularly males. You know, these tough guys who, you know, believe that they're. They're lonesome cowboy and they have to do it alone. It's that very most powerful thing in the world that you need at this particular time. You need to be able to turn to empathetic people and just simply let them just console you. Because this is. You've taken a major hit. You know, manning up on this is just the stupidest thing you can possibly do. What you need to do is you need to be a human and you need to be able to accept the loss. And the first stage of that is having people with you who show that they love you enough, okay, that they're going to walk with you through this loss. There are a couple trading rooms that do a really excellent job of that, that actually recognize that the community of traders that they're working with really needs to be supportive in good times and bad. And a lot of these guys, when take major hits, is that people from the room come and start working with you. You don't have to go for looking for them. But the thing is you need to be able to talk about this story. You need to share that story. It's, it's, it's very similar to AA and you know, basically in the recovery movement is everybody in an AA group, they have one desire that they, and you don't take the next drink. And what they also know is, is that they are there and they, they will do powerful things to be with you when you're at the worst moments is that my mom and dad, before they died, they had, they had, they had 17 years of sobriety. And one of the things that particularly my mom did, she was a retired registered nurse. She would go on 12 step calls and to really.

Spooky situations where there was a critical incident going on and they were trying to get in the 12 step call. You're trying to stop the person from taking the next drink. They love you so much, they're willing to even risk that. And it's, it's interesting is that they're finally when that alcoholic is hit bottom and realize that life is unmanageable, okay. And they have to, they have to find and they're saying a higher power. And what we're saying is that that higher power can just simply be the group that you belong to, one that supports you. Now if this sounds like a very different kind of presentation from Randy Howell, it is. But this is the thing you're, you know, what happened is the request was to talk about major losses. And this is not this, this is take managing and swallowing and digesting a major loss takes a good bit of effort. And so what you're looking at is going, no, you're, you're almost going to have to find a way to be able to connect with people and let them help you through this or otherwise you'll find yourself in other various ways of dealing with the distress of having taken that loss. And I would mother, I would rather have friends who really care about me and are empathetic to me with me at that particular time than me sitting along, say with a bottle. Okay, so we've gotten that. And that emotional support may take a while because again, what we're trying to do right now is we know that we are, we're racing against time because initially the brain is hacked in the experience and it is encoding it into memory. And what we want to do is we want, and that takes about a month to solidify the memory. And what we want to do is we want to really impact we want to impact the way the brain is encoding the experience. And this is, if you're interested in other study, this is called memory reconsolidation. In my work I call it memory enrichment. But you're actually going in and you're saying, okay, we're going to alter the way the brain encodes experience into memory because that's where you can get past this deal and learn from it, or this is where you get stuck in it. It will depend on how the brain encodes that experience. And we're doing everything we can in the short term to be able to stop it from encoding it. From a survival instinct perspective. We want the thinking brain and to have a part of the say, and we want, we want part of that is to have empathetic people around us so that we can begin to process the event, okay? To work through it, to tell the story and to be, to tell it as a story of what you're learning from this particular hit rather than my life is coming to an end. Big deal. That's a huge difference, friends. So then we say, okay, we've done that. The other thing, in a short term basis.

Find a way to get exercise. Why exercise? And it doesn't really matter. You can use yoga. But what we also really want to do is we want to get the body revved up. We want to burn out the stress chemistry that's in your body, okay? And one of the best ways of doing that is, well, I walk, I can no longer run and I can't play racquetball anymore. But if you're younger, you know, the thing is you have a way of getting that heart rate up, burning out stuff. My son runs 25 miles a week, okay? And so you can see that he's got a way of burning out the chemistry of stress as he goes along with a high intensity job. So you're looking at this and my hope every, if you're, if you're, if you're seeing, envisioning yourself as a professional trader, my hope is that in your home office you have a way to get exercise even, even when it rains.

It is critical during this time particularly. You know, the thing is you can get, you can fall into rage, you know, blaming people. You can fall into, you can fall into sadness, you can fall into lots of different emotional states that really become moods over time. And we want to burn the chemistry out so that it doesn't, again, so that it doesn't become pattern. We want to learn how to handle a catastrophic loss, not just with money. But in life, you know, the. One of my heroes of all time is a. Is a early psychiatrist called Carl Jung. And one of the things. And I consider him to be a genius. The thing is, one of the things he said is he said that probably the most important skill that you will ever learn to develop is grieving. Because the truth is.

You are going to be grieving for the rest of your life. There will always be losses. And in the same way that a really good trader learns to work with his losses, to understand that's part of the game and to grieve them as they come and let them go and move on. What we really want to do is say, okay, before we can do that effectively, we want to manage the emotional chemistry, not allowing it to build up. Okay. That's the first aid. Okay. Notice I haven't said, oh, check out your plan and stuff like that and find out what you did wrong. And no, we're not saying that. We're taking care of how the brain is encoding experience into memory because we don't want that memory to consolidate and move from an acute stress incident to acute stress syndrome. Okay, we don't want that. And I work with plenty of traders who, you know, I'm going to tell you something, they get pretty rattled when. When they see they just. They have this. Just this memory that just keeps coming back, intrusive memory that keeps coming back at this big loss. And they get scared. They get scared. They can't open their computers often. They can't. When they get into. Really when the trade starts going against them, they overreact to it. And what we're doing is we're trying to stop that from happening in the first place. Now, now it moves on to more of.

We have to develop mindfulness. We have to recognize.

That this thing you call you is actually just one potential organization of a self that could be. And.

That brain has organized you not for optimal functioning and uncertainty. It has organized you as caveman to survive short term. And that's the problem. And you're going to have to be able to step back and begin to recognize that me and my thoughts are not the same. My emotions and I are not the same. My beliefs and I are not the same. And you're going to have to acknowledge that. What you're going to have to do is grieve. If you don't decide to grieve willingly, you will. You will enter something called protracted grief or complicated grief. And as a trader, you don't want to do that. So the first thing is you're going to be looking into a mirror, and you're going to acknowledge that the way yourself is currently organized is not working to produce success in trading. And by the way, I would be surprised if it was organized for success in trading. So just like this guy is looking in the mirror and he's beginning to think, well, who am I that is trading? What we really want to do is say, you know something.

You can say that.

I'm just. I just want to get over it. Well, my promise to you, as long as you hold that you will spend the rest of your life running from what you want to get past. What we're saying is that this is an enormous lesson sitting in front of you, the potential of an enormous lesson. And this is the time that you have to choose that. I'm going to. I'm going to understand myself more than just the current organization itself. That I am. That got me into so much trouble. That got me into a situation of where I did something pretty stupid. Most people, you know, there are two routes to producing a massive loss. One is over trading, where you have an Alpha, you know, and he. He wants to win and he wants to prove himself, and he gets in this thing and he starts going wild, and he just trades and trades and trades, and then he starts losing, and then he can't hardly handle it, and it just goes on and on. And finally, you know, he's taken out, but it's happened otherwise. There's a rebel within us that doesn't want to take the loss. It just hates losing. And what happens is that not taking that loss. It's very caveman of you. Those two traits are not going to serve you well in trading. Alphas don't do well in trading. They blow up accounts. Rebels don't do well in trading. They take massive injuries because they don't want to take a loss. When everybody knows that in trading, you have to become an exquisitely good loser. And so we're having to say, I acknowledge that I actually am going to grieve whether or not I like it or not. And what I'm going to do is I'm going to grieve. Well, I'm not going to. Look, I may have started this webinar with Randy thinking about some quick fix, but what I'm hearing Randy say is that this is a process, and it's one that takes a while to work through, particularly a big one. You know, I know people who, you know, five years later, they're still talking about that big Huge loss that changed their lives. So we're at mindfulness, recognizing that you are just a construction of a self, of your potential. And what you're realizing through this loss, through, you know, recognizing that by taking responsibility for this loss, what you're doing is you're saying, I need to use the opportunity of the grieving process to change the potential that I'm organized as to become the trader who doesn't get sucker punched into taking a huge loss.

So.

There we are. Now we're moving into this. And what I want you to become aware of is this, is that grieving is a journey, okay? That you end up having to become aware of the stages so that you can kind of locate yourself in the stages. And this is a process from Kubler Ross, where she was studying dying people, and she discovered that there was a process of coming to a moment of where the person recognizes that they've accepted it, they're ready to move on, and they're ready to go. And what they discovered is they started practicing with this and, you know, in hospice and stuff like that, they discovered that actually all the dying person was doing was grieving a loss. And they realized that Elizabeth Kubler Ross had stumbled onto something much bigger. But into the grieving process as a skill that allows you to see this as a journey. And what I want you to notice is the very first thing that happens in the grieving process is shock and denial. Do you remember what your gut felt like when the money was gone? How it shook you to your core? That, my friends, is shock. And then it's unbelievable. It's denying it didn't happen. Maybe I need to look. I mean, to hear. I need to look all over the place. Where could it be? How can I get that money back? But there's no more money to even wager. It's gone. You know that you've been cut off from your funds. You're over leveraged. So we started in this journey and we've discovered shocks happening there, and that's very physical. And then denial of when you just. You really, truly want to pretend it really didn't happen. And you want to wake up the next day and say, oh, it was a bad dream. But no, as it comes along, it did in fact happen. Then kind of my favorite is you start bargaining. Well, if I do this, I'll do that. If I can do this, I can do, you know, I'll bargain with it and say, well, what do I have to do? And then you get close to God and say, God, what Do I need to do just this one time, can you help me out? Blah, blah, blah, blah. All that stuff. You're bargaining and you're bargaining with no one. But you're the forces in your mind. Becoming an observer helps you start bringing this stuff out and you start saying, okay, I see, I can see how I'm stuck in a particular stage of grieving. And I realize that I'm not going to get out of this in one easy. Two easy steps. That grieving is a process that can go on for years. In trading it, we're hoping to use it to be able to learn a much deeper fundamental belief about the self than the one that you brought to the game that caused the law, laws to get out of hand. We already know you're going to lose. A good, you know, a really good trader can be losing 40, 50, 60% of the time, or it's just like a poker player. If you're playing with a really good poker player or professional one, he's only winning 40 to 50% of his hands. But over time, he's going to have all the money in his corner. He knows how to lose, he knows how, he knows how to do all that stuff. And this is where we're going. We're going to have to start realizing that as long as I'm bargaining, it's not going to work. Then the next process that happens.

Anger. Anger. And that anger can be projected at the trading gods. It can be projected at your broker. It could be projected at your spouse, your children, your dog, your cat. It could be projected at everything. As long as it's being projected, it's not being dealt with. Or that anger can be projected at self, as is shown in this particular image. And what you're beginning to. You start beating yourself up, beating yourself up, really digging a hole that it's harder and harder to get out of. And the anger, frost, frost, frost. Now, in the grieving process, anger can be good because it can help you get out of a bad situation. However, anger in a situation like this is that.

It makes you feel powerful. At a time when you're in the middle of really taking a loss is that you feel powerless. And anger gives you, I mean, it puts a lot of adrenaline in you. It makes you feel powerful in the moment. But, but what happens in order to do that, to maintain that sense of power, you have to constantly be triggering the anger which is going to blame other people and make other people incapable of hurting you back, even the trading gods. And you realize, my God, I'm self deceiving now. But this is a natural, normal process that everybody goes through.

When they're beginning into the grief process. So now you've got it. Is it. Oh, what I've been is I've been maybe blaming other people, other institutions, other God knows what. I blame myself. I've beaten myself up. I have done all this and I'm realizing that that's useless. It is, it is. So we've gotten there and going, oh, maybe a little more self honesty. And this, my friends, is where the really tough part of grieving a loss like this is at, is that after anger is actually very toxic to the body. It builds that adrenaline up and it's really toxic. And so there is a moment where you hit a particular level and what happens is that the rheostat, the brain is will just simply cut off the anger. And all of a sudden you crash. And when you crash, you crash into sadness. And this is where a lot of people go, oh man, that's one thing I don't, I don't, I man, I'm a positive thinker. I don't like to feel sad. Well, I'll tell you, positive thinking is very limiting. And the key is I would rather have you doing probability thinking. Understanding that sadness is vital because sadness as an emotion is an emotion that tells you that it happened, it's gone, it's dead, you need to move on. And what you're feeling in sadness is you're feeling feeling the separation from the attachment of all that money of a loved one or whatever and you're experiencing literally a very natural thing called sadness. Sadness is not.

To be avoided, it's to be used. And out of this you begin to go, well this is where I begin to find self honesty. I take a look at this and what kind of idiot was I here? I was. If I'm. If I'm. If I'm equating money with power, with prestige, with controlling the outcome with my safety, what it's done is, it's shown you is that by placing your performances as a gauge of who you are that you've proven yourself that you don't matter. Is it true? No, it's just one organization itself. Otherwise what you also do is a lot of times people will find that they just really, when it comes down to it, that they don't really feel worthy. They were trying to get all the money up so they feel if I have a lot of money I would, I would feel worthy. And now I've lost that and I'm back to saying, well it's deeply sad. Now what am I going to do about this? So now we're looking at it and going woo. Okay, now we're in this sadness stage. And what it also does is what sadness does. It starts getting you to where you can start facing your core beliefs. When you look at your trading account and you look at the big hole in it from a major loss, what you're really looking at are the foundational beliefs you have about your ability to manage uncertainty under pressure. And no small wonder.

That your beliefs did not line up with success in trading. This becomes a very powerful. Instead of trying to deny it, instead of trying to say, oh, I can do better, I'll just, I'll just, you know, I'll just get tougher. No, what happens is what you're doing is you're saying fundamentally what I now need to do is I now need to learn how to reorganize the mind that I actually bring to trading and take responsibility for it. The really good news is that if you go through sadness and really like a warrior would go through sadness, not.

Not some tough guy who breaks down under pressure, but acceptance starts happening that you accept that the loss has happened, nothing can be done. But at the level of acceptance is when you're walking away from the loss and you're charting a new course for your life. And acceptance is just when finally sadness has done its work and you recognize that the beliefs laid down are what caused this. And you really need to, in order to move on with your life, what you really need to do is examine those beliefs. And that's what you do. You start realizing that maybe you thought that nobody could see these beliefs, maybe you thought you couldn't even see these self limiting beliefs yourself, but the trading account revealed them to you. And what you're really doing at this particular moment in the humility I hope that you have felt at this time, you become honest. You begin to look at yourself and say this is, yeah, I talk the talk like this, but the truth is I've been a fraud for so long. What I really want to do is be self honest and start saying how do I go about working this program? How do I do this? How do I rebuild? This is when you start really, truly harnessing the grief process. But there's going to be one other one that is going to have to be done and.

You'Re going to be probably shocked with what I'm about to say. You're going to have to work with the shame of the Major loss.

Now what happens here, we really need to really redefine shame. Because ultimately shame, as long as you resist it, it's going to be, it's going to drag you down, it's going to hold you there because you're not going to want to see what the real problem is. And let me share some really good news with you. Okay. This is something. When I, when I moved from being a cognitive behavioral therapist into an emotional intelligence therapist, one thing that I learned was that the way we understand shame is dead wrong. What I propose to you is this, is that shame is not to be avoided. It's actually one of the three organizing emotions that organize the self, organize social systems. And what shame says is that the way you're currently organized is not working to the good of the whole. You need to reorganize yourself. And what happens is that shame gets the ball started by starting the process of disorganization as it's being presented in this image. So the problem though is your brain does not like the sense of disorganization. That makes it feel very vulnerable, that makes it feel, feel very, very like, oh my God, I'm so uncomfortable, I'm dying. And in some sense, the part of the self that you have to reorganize doesn't want to give up, it wants to be there. It had short term success at one time, but it's showing that it's not. But again, if you were to take a look at shame from a caveman perspective, where let's just say that you and I are sitting in a cave and it's in the kind of the evening, there's kids playing, there's women doing women's stuff, there's men doing men's stuff, there's somebody weaving, there's somebody tending the fire, they're doing all the things of primitive man. And then approaching that cave is a 1400 pound, snarling saber toothed tiger. It's coming right to the group, it's looking for dinner and the whole group's on the menu. What happens in that case? Women and children go to center.

Children are the genetics that you want to project into the center. And the truth is is that the getting pregnant, going through pregnancy and getting a kid up to five years, it's a huge bottleneck. Men are very expendable under these circumstances, but you got to protect the species. So what happens is men go to the corners, they've got a little spear with a sharpened rock on it, and they're facing a 1400 pound cat that has incisor teeth that are six inches long. Now, when you're looking into a snarling cat like that and it wants to eat you, do you think you're going to be scared? With a little puny spear? Yes.

Now, what if the fear took over and you ran.

And later you came back to the group after the lion had done, the tiger had done what it was doing. And what do you think would happen? They would shun you. They would shame you. What they're doing is disorganizing the current self that did that performance. And over the next two or three weeks, when you're being, you know, the shame is really working in you. You finally get down, you grovel, and you, in all humility, you want back in the crew. And it's with the understanding, will you stand to the tiger next time? Next time that tiger shows up, if shame has done its work, you're a very different human being. It's the same here, friends.

Is that. Believe me.

I promise you, unless you just happen to be in a very elite group. Is that the brain that you brought to trading will not produce a mind that will produce success in trading. There is going to have to be some reorganization of the potential of the self for you to achieve that. If you're going to find that reorganization itself, you will be using shame as a tool. You will pick up the tool of shame to reshape the self that you are. That engages losses. And it won't be the one that says, I hate losing.

It will be a new self that understands how small losses are. Victories. Completely different. Completely different. And I know it's scary, but this is the deal. Now, what I want to do is this is what most people think is most people think that shame is. I call it toxic shame. You're a character flaw, and there's nothing that can be done to it. This big, huge loss proved that I'm inadequate. It proves that I don't really matter. I'm not a big man in town. It proves that I'm unworthy. It proves that I'm not lovable. No, it doesn't. What it proves is that you did not have the psychological tools together to create the mind that could manage completely different environment than what you grew up in and what your brain organized to have you in.

That's what it shows. The rest is something I call the inner critic. Blaming, judging, criticizing you. Keeping you away from learning how to use shame to retool the self, to reshape the self into a mind that has a very different view. Of winning and losing, where winning and losing are just simply different potentials that exist when you trade. And that winning only means that you landed on the right side of probability relative to you. Losing only means that you landed on the wrong side of probability relative to you. That's all. It doesn't mean how much you matter. It doesn't mean how worthy you are. It doesn't mean how adequate you are, it doesn't mean how lovable you are. It's just a performance. And the mind that engages that performance can definitely be changed. So now we've gotten this thing where we realize that we have some work to do. And in the end, what you're looking to do.

You'Re looking to be able, within three to four months of a major loss, to be able to look at the mirror and see a very different human being, a very different human being. A one that has picked up the tools to be able to produce transformation. One that can look at there and say, yes, that was a great price. But the thing is, I have learned a great lesson. I didn't resist the lesson.

I turned toward the shame of that loss, the impact of that loss. And I found out, and interesting is the guy that I was talking about, Mitch is. He said, you know something? What I really found out after I lost three quarters of a million dollars, I went to my wife and I confessed I had missed it and she still loved me. And what he realized is, oh, whether or not I win or lose, I'm still loved. Okay? And that's when he started taking off. But what you're wanting to do, and literally I have people standing in front of a mirror and I want them to look into their eyeballs, right down their pupils and breathe and begin to really find that center and begin to side. Okay, you know, the truth is what I get it, I have coached myself through this and what I've done is I've come to a moment where that old organization itself that produced that, that produced that disaster is no longer the organization self, that's trading. I'm free from that particular pattern, that life pattern. And I'm walking through. And let me tell you something.

You have to have the courage, you have to have the patience, you have to have the discipline, you have to have the self compassion, be able to use that shame in the loss with the sadness, to be able to reorganize the new human being that you can be. That's the way it's done, friends. And it's something where a lot of people just never get it. They don't want to. They don't want to. They don't develop themselves. They want to. They want to think there's a big secret that just changes everything. There's magic. That's what affirmations and stuff like that are all about, is they're fine, they make you feel good, but when they're tested under stress, they fall apart. What we're doing in this process I'm describing is you are fundamentally, you are fundamentally changing the foundational beliefs. And here's what I want. It's a powerful opportunity. And a lot of people, you know, it's like, I don't wish it on anybody, but think. Thing is, every trader has to cross this road. I mean, you have the guys who blow up accounts, you have the guys who bleed to death from a tiny. From a thousand tiny cuts. But the thing is, this one we're looking at going, okay, this can be seen as an opportunity. And as Lao Tse said many thousands of years ago, mastering others is strength. You can do that in the outside world, but mastering yourself is true power. You need true power in trading. And this is what, you know, the thing is, is you can. There's different ways of doing it. Obviously, I teach it. I teach a technology and a process that you're looking at elements of. Yeah, this is what you do when you, when you. When a guy's taking a huge loss and he no longer wants to fake it till he makes it, he actually saying, I need to do the fundamental change that allows me to become the trader that I can be. I need to learn how to do it now. And it just so happens there's a. There's a. There is a sports psychology book. The name of that book is It Takes Whatever It Takes. And what you're looking at is if you really, really want to truly become a great trader, it takes what it takes. You're going to have to get down and you're going to have to work with fundamental beliefs about your ability to maintain order under stress. Okay? And when you do that, you're going to find out as a human being that they're probably not there. And you're going to have to use the sadness that comes from loss. You're going to have to use the shame that comes from loss to be able to reshape the self into the trader that can trade. So what I want to do is I want to thank you. And I know this is. Most people who see my stuff, this is probably going, wow, Randy, I've never seen you talk about this. Well, I just think it's time.

Learning to take big losses is a major task. And if you want to learn more, I thoroughly encourage you to look at our group course. May 18th. May 18th, I'm just told. And we, we have people already signed up for it. And it's something where it has five group sessions with me and a webinar floor mat over a period of two weeks. And we actually go over the tools that you need to be able to reorganize itself to become a trader. These very things I've been talking about, they would be taught. It is the how I got. I got a guy the other day said, you know, Randy, I really, you know, you really understand this stuff really well. Can you tell me how to do this? And I said, well, you do that by going to my course. I'm telling you what the problem is in a way that is truly understandable. And you understand, understand the problem so it can be solved. The group course is a dynamite way. And if you, if you do early, if you get early, the thing is, is that you get a free gift because we find it, we want you at least three to four weeks of working with the emotional regulation sections of the course. And for that, what we want to do is give you a free gift if you, if you do register early. And the emotional racial regulation workshop, if you want to, you can buy it for $200 on my website or you can get it free for enrolling early. Okay, it's. It's all right with me. That's the one I encourage. And the individual course is for people who are really serious. And what they want is, they want me as a mentor. And it, it is, it gets deep into your personal psychology about the impact it's having in trading. And it happens over 10 years. We have 10 sessions over a period of three or four weeks. We meet on Zoom. It's a very powerful course and you have mentorship. So. But more than anything, if this is the first time you've run into V, go to our website and get the free ebook. Okay? Just start stuff, start kicking around, watch the videos on YouTube, watch, read some of the articles, start really identifying and really see what you're going to have to do. So I thank you. And let me. We've got a few questions. Okay, here's from Bill.

How do you stop yourself from jeopardizing when you are successful in trading? I think I understand what you're saying is that. Are you saying that when I start getting successful in trading, what happens? I start Getting euphoric, you start feeling good, you start feeling self confident. Okay. What happens is that you build a mind that does not allow yourself to start getting full of yourself. Is that I would encourage when people, when they actually win that they, what they do is they calm themselves down and they do not allow themselves while they're still being euphoric. That's it. Look at me, I made some money. That kind of stuff. Until you get yourself back down. The only emotional programs that you have to have and that produce success in trading is the discipline of ruler and the impartiality, the clear thinking of a sage. The rest of the organization, the mind is to be able to quell fear, to quell the urgency to get into things and stuff like that. But the major thing is you're looking at when you win, you have to cool yourself down. You have to get yourself, you have to get your game face back on and there is no time. You're allowed to feel good while trading after you finish. Absolutely. Go have a wild one, have a good one. But when you trade, okay, feeling good is not allowed. Okay. There's three Williams in a row. Three Williams in a row. Boy. Okay. This is William Comer. Let's see here. Hi, Randy. Only a small percentage of people that go into business for themselves actually succeed. True, Very true. The financial uncertainty of being self employed seems somewhat similar to the financial uncertainty of someone trading for their own account. That's very true too. Do you think that traders who have difficulty with self discipline with their own account.

But still have the desire to trade might want to consider trading for a prop firm and trade with someone else's money? That happens. Understand the burnout rate in professional trading in all these houses is 90% within three years. So it's about the same thing. A prop firm employer will enforce financial discipline on their employees or contractors or else they will be dismissed from the firm. That trader might be financially and emotionally better off by doing this. Yeah, I agree and I work with a number of people that work with prop firms and they do have that. The major thing is that there's still no way around that the mind that you brought to trading is not going to be successful in trading. You're going to have to build the discipline. Okay. And you're going to have to understand that the what I call the urgency or the fear of the orphan, something that is not going to go away whether whether or not you're doing for a prop firm. And prop firms make a lot of money when they yank things out and stuff like that. Because they will have a process that you had to do to qualify for all that. And they do well with that. Randy, would you please show the slide that comes between stages of grieving and anger? Well, let's find out. Let's see if we can do that.

And okay, there's anger. I think that's what he's looking for. No, the one that's grief. Yeah. And that's anger. So this is the one in between. Okay, okay. That's the bargaining. Traders bargain all the time. Okay. And they, they talk as if that.

They talk as if that. I don't know why Dolores took it off. They can see it. Oh, okay. Okay, okay. Let's see. Randy, would you believe the grieving and anger sage? Okay.

Okay, here's another one. I have a PDF version of mastering your emotions in the inner game on a CD disc. Is there a way I can download it from the website?

I don't think so. You have it on a cd?

Wow.

I would ask, where did you get that cd? Here's from Peter. Can you give a quick recap of the steps? Yeah. The first thing is the event itself, the activating event. A major loss. Then comes shock. Okay. And then comes the denial.

And those are. That's just traditional. You just deny that. You deny it's happened. Like don't tell your wife and stuff like that. The next one is bargaining where you start making up excuses. You start doing this, you start, you know, it's kind of making a deal with the devil. Okay. And after that, most people find themselves getting angry because what happens, they're falling into this. Oh, my God, the sense of powerlessness. They realize their bargaining is not working. They start falling into powerlessness. Anger is a wonderful quick term way of feeling powerful. You get angry, you got all that stuff running through. You feel powerful. And unfortunately they have to keep cranking the anger up in order to maintain it. It's not maintainable. Then it crashes into sadness. And that's where the real work, the real work of grieving really begins, is that you have to acknowledge the loss that's happened and that it can't be undone. And that the truth is.

You have to finally go away. And I'll tell you one of the best examples that I've ever seen of that.

We live out in a rural subdivision and we have. We have turkeys. And one day someone coming out of our subdivision hit a turkey and didn't stop, just went on. And at first I just wanted somebody to come and clean it up. And what happened though is another turkey came there and stood by the dead turkey. It went on for a day or two and I finally put it down to an area of my property that.

There was some peace and quiet. Okay. But that other turkey stayed there for over a week and a half with the body until it finally discovered that that body was going to get up and it wasn't, you know, it wasn't going to be a turkey anymore. And finally the, the, the live turkey moved on. That's sadness that's happening on the sadness of a turkey and you're seeing it go through grief in the midst. But the thing is it didn't get stuck in grief. That's protracted grief. And it just simply moved through the sadness and it came a moment where it accepted that yeah, that mate was dead or that son was dead, that daughter was dead, that whatever and it moved on.

So. Hi Randy, have you ever worked with sport vetters and are you aware that the mindset is the exact same as that of a trader? Yeah, I have worked with a couple of them over time.

That has.

That has never actually called me out in the same way that I've never worked with poker players. Traders has just been.

It'S been eye opening for me. When I first started working with traders.

I was an emotional intelligence therapist but I was still therapist and I had no idea about the brain on uncertainty. And over the years I've come to really enjoy.

Just the work of recognizing that's the problem here. It's that the brain is built to perceive that it has certainty, perceive it has power, perceive it has, has safety. But in fact a black swan can show up at any moment. And in trading there is no denial of it. It's happening all the time. And I began to go oh my God, this is, this is that the. What you're looking at is foundational beliefs at play and kind of the. In the fields of the trading. And it hooked me. So I. We're actually in the process of moving.

Expanding ourselves to personal development, more of that a much larger audience because a lot of the people that we work with are finding us and they're not really.

Trading way down on the ladder in terms but what they do is they find out that I have a. There is a missing piece of the puzzle about how to actually do this that they find in me. So we're moving it there. But yeah, I'm aware that. I'm aware that a really good.

Horse better is not gambling. I realize that there has a technology and he can really run the numbers and do it. And same thing with poker is that, you know, those, those guys, those are math wonks is what they are. So I think we've got it. So I want to thank you for being here tonight. And what I ask of you also is to begin to go, oh, really? I need to start harnessing the grief process about all my losses. Not the major one, but the one that when I hate losing, that I realize that I've got something there that needs to be worked through. And part of that working through, you will find yourself in the grief process. I want you to be able to find where you're located and realize that it's a process.

It's not you. It's a process. And if you allow grief to do its work.

It'S a lot easier change the foundational beliefs that you bring to the management uncertainty. So I thank you, friends, and I wish you a great life, a great Easter or whatever, or whatever's going on in your time this time. So we will see you next month. Take care and have a great day.