Learning to Master a Trader s Greatest Problem

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Welcome everyone. My name is Randy Howell, trader, state of mind, and I am delighted that you're here. First, let's just do the housekeeping. Let's make sure that you can hear me. Would some kind folks in the question box just say yes either y or something? Yep. Thank you. Thank you, thank you. Okay, we've got it. What we're wanting to do here today is we're wanting to take a look at what is the major problem that traders are gonna have and they're gonna have to master to be able to become the kind of profitable traders they want to be. I mean, the biggest one. Okay, we're there and we're gonna be backing in this and I'm gonna give you a hint. It's not psychological, it's biological. Okay, but going to give you that hint and I want you to recognize just what an uphill climb you've got, particularly if you maintain this kind of blindness to just how powerful that brain, that ancient animal brain, mammalian brain of yours can cause your psychology of today. Okay, we're going to be doing that, but first.

Let'S take a look at what the actual components of successful trading really look like. The first thing is that you got to have a trading system. It has to work. You know, you can't have one that poops out on you and doesn't do things. It has to be there and it has to respond really, really rapidly. You also have to have a methodology that is your risk management, the rules that you trade by that give you an edge over just random acts of the market. Okay? And then there's this sidebar that nobody recognizes as a problem until it can no longer be denied. It's your trading psychology. It's your state of mind. And it would really be, you know, something, to be honest with you.

It's not so much your psychology, it's really your emotional nature taking over your psychology and driving it. We're going to be taking a look at that. We're going to be looking at survival instincts that are very, just right there, right in front of you. And you're not seeing them, you're blind to them. And we're going to, we're going to start there. We're going to say, okay, I get it. And by the way, the way that this successful trading account is really measured is by your P and L statement. It's telling you when you look at your P and L statement, what you're looking at is a truth meter that Is telling you how effective the beliefs that you're projecting onto the markets are about extracting more capital from the markets than you give back in. So you can get away with a lot of things when you're not in the trading mode. You know, like if you're in a business, you have this. You can live in illusion, you can live in deception, and you can deny, you can rationalize, you can do all that stuff and make up stories. But in trading that trading account, it's a lot like instant karma, man. It gives you feedback right that second. And it's probably not what you want, but my promise to you is this. As far as your trading account helped goes, that P and L statement is your best friend. And if you get that going, you know that. Boy, I wish that best friend of mine would give me a break. No, that's just it, what it's doing, it's telling you the truth about how effective your beliefs are about being able to manage risk or whether or not it triggers all these survival instincts from that animal brain of yours, that mammalian brain of yours that overwhelms that thinking brain that makes us so different. So this is the, this is the trading system, this is the piece. You add the methodology, you add the trading psychology, you add the trading system, and you have the components of successful trading. Generally what I see are people who have spent a gob of money on their trading system. They have spent energy like crazy on their methodology. They know trading, but they don't really know themselves. And they particularly don't understand about our evolutionary path still having a major impact about the way we work. And out of that. Where we're going to start is this is called the sages of waking up. And the first one is just simply bull in a china shop. Most people get in this stuff and what happens, they see this. Boy, look at how much money can be made. I can do that. And all I have to do is go in there and learn a system and I have to, I have to spend my 10,000 hours. I'm going to do that and I'm going to start mining money. And they just whistle right along, everything's great. And what's really tragic is that if they started out well, they develop a blind spot and they don't see, they don't see the way emotion and thinking are connected. And what they do is they fold. They fall down in that manhole. They don't recognize how dangerous what they're doing is and what they're doing because ultimately.

The blind spot doesn't hurt you until the risk is real and there's no reset button. You know, there are people who get in these competitions about paper trading and they talk about how much money they're making and things like that. But the truth is.

It'S paper, it's not real. There has been nothing that goes into that P and L statement. The thing is in trading, it's that the very moment that you need your logical mind, it evaporates under pressure. The stress gets them. And suddenly that brain is triggering to ancient survival strategies that have nothing to do with thinking. And your thinking brain is so blind to it, it doesn't know it's there. And yet, if you are going to master trading, you are going to master the survival instincts that are driving you batty right now. They're not going to go away, they're going to trigger. And you trying harder only makes it work because then they, then they go, oh my God, it's real danger, it's real danger. And you know, just sitting there doing more, harder, work harder, work harder, are being tough, tough, tough, it's not going to work either. These are survival instincts. If the thinking mind gets in their way, it just is blown away. So out of this.

Finally people come to the moment of where they realize, and this is usually two to three years in what they do is they realize that, oh my God, you know, I think I'm okay. But the truth is my trading account's not. You know, I've blown through accounts, I have replenished my, my trading account, I have done all these things and what happens is I'm still getting in trouble and yet I don't see why. Again, what happens is you don't see the blind spot. You're going to continue to get ambushed by what you don't see in the rear view mirror. And out of this. This is what happens. Why? This is why most traders last two to three years. And what happens is they finally decide that gambling, I mean trading is gambling. And that's because they haven't understood how to put the brain in the right place to be able to work. So the thing is, real risk gets there, rational thinking goes missing in action. Okay? And the truth is, until you learn how to solve that problem, it is going to stop you from being able to, no matter how much knowledge you have, no matter how matter how cool your system is, you're not going to have your psychology together that has an edge that can drive your method edge, it is that big. So now.

What happens instead? Your logic gets hijacked by that little thing called the amygdala. The amygdala means almond. In fact, what happens if you were to look at the amygdala? It would look like an almond. You know, you go, what can that do? Well, that is the seat of your emotions, that is seat where you have fight flight. It is a part of the brain that is millions and millions and millions and millions of years old. It was not built with trading in mind. It was built to survive the challenges of living even before we were human, even before we were Homo sapiens, even before we were cavemen, long before that, when we were simply social mammalians that were 120 million years ago. That amygdala is still there. It's still doing its job. It's. It's the one that, it's the one that triggers off into fight flight. It's the one that has those really powerful fear and anger type of emotions. And it's unchecked, by the way that we try to do it, we're trying to push it, make it happen. And the truth is, is we remain blind to it. And if we remain blind to the logical mind, which is a target for this, what are you going to do with your effective trading? So.

Quite frankly, the brain you brought to trading, you could not have designed a worst case scenario for the brain to deal with, okay? You really couldn't have. You're putting it into a situation where it doesn't understand money. It doesn't have a concept of money. If you put money in front of a caveman, it might use it for tinder for starting a fire, but it's not going to look at that and say, oh, I can trade this. No. What happens is money to it is a symbolic representation of your power to stay alive in the world and to push your genetics into the future.

That's what it is. So suddenly what happens is that you're taking a brain that was built in human form 6 to 8 million years ago as mammal form 120 million years ago, and you're asking it to do something that is absolutely unnatural. And then you say, then you get pissed off at it, curse it, and stuff like that. And then you try harder and you still don't understand that this part of the brain cannot do what you're asking it to do. You're going to have to retrain it and it's going to take some effort. Okay, so we're there.

You've got a brain that just doesn't cotton up to uncertainty. It doesn't, it Wants certainty. It wants control of outcome. And what happens is that you're not giving it that. As a matter of fact, you're trying to push it and to make it do something that it wasn't designed to do. And everybody in trading has to do that. Unfortunately, your thinking brain thinks it's so, so cool, so bright that it just creates a blindness to the power that this emotional brain has on thinking. And the truth is, your thinking brain started out as a tumor growing out of the emotional brain. And as it grew out, rich amounts of communication from the primitive brain into the. Into the thinking brain got laid down. However, if you could imagine in the thinking brain, communication back into the emotional brain was two 19th century telegraph lines. Do you see the overmatch? Okay? And all of a sudden.

Your old brain wants to predict outcome and control it. It wants to be right, okay? And this is exactly by definition, what it cannot achieve when stressed in the environment of where you're risking capital into your primitive brain, risking your life. Okay? So this is where we're at. So. And it. You know what's weird? It's not your fault, you know, you're not understanding the mammalian brain on uncertainty is the greatest problem in trading, is that it just go on and off. Emotions don't go on and off. Emotions are not even what you imagine them to be. They. You're. You are emotion. Okay? That's the big deal. But even though it's not your fault, it is your responsibility. If you're going to plan to be a successful, consistently profitable trader, it's going to be your responsibility to rebuild resignation the way your brain engages uncertainty. And what I hope you understand is that I. I don't really even try to talk to a trader until he's had enough experience to know that his thinking brain alone, no matter how much knowledge he has, is never going to work. It is a partnership between the emotional brain, that really old part of the brain, and that new brain that has to be. It has to be built. Not rebuilt, built. It's never happened. And you're putting it in a situation where it's absolutely necessary. So, like it or not, you're going to have to rebuild the relationship between your old, ancient emotional brain from your caveman days and your new brain from our homo sapien days. And as we move into a world of probability, rather than living in an illusion of probability, being able to power, being able to.

Excuse me.

Because that thinking brain is to assume control. And that's exactly what our caveman ancestors did. They didn't Necessarily control, but they lived in the delusion. They did. And it was necessary. It was necessary for survival of the species. However, when you live in the delusion that you're in control and trading.

Evolution side on your side at all, so it really comes down to what are you going to do about this? So we're going to take one last thing. The problem is that your emotional brain sits underneath conscious threshold. You don't know it's there. That's why you go, I don't know what happened. And if you take a look at this graph over here, you're looking at that conscious mind, that little tip, and you're looking at what I would call, I don't call it the subconscious mind. I really call it the limbic learning, the system, the, okay, the mammalian brain stuff. It's not.

It doesn't think, it emotes, it takes care of things. 95% of the decisions you're making on a daily basis are not made in conjunction with the conscious mind. They are made with the conjunction of limbic learning. And it locks in that way. And if you want to really see that, why do you think all these guys on these big hopping pickup trucks, I see them all the time and the guys look kind of like me, obviously not working laboriously anymore. And they have like an 80,000 or plus pickup truck. But what advertisers found out is they realize that guys like me are losing their testosterone. And what happens is if you get in that truck, you turn that engine on, you do all that, you get this shot of testosterone going on you, and you feel manly again. That's what they're selling. That decision never entered the conscious mind. So now you've got it. You've got a waking mind, a new thinking brain, and it just, it has so little to do with your everyday operations, particularly under stress, you wouldn't know it. So now we come to this thing and go, okay, by this time, I'm hoping you recognize that you really have to.

Begin to rethink this thing. For instance, what is an emotion? The definition in neurobiology is it's a biological action tendency that is built to coordinate activity between the environment and the organism. The markets and the trader. Okay? And that happens anytime, that there is a disruption to familiar status. Anytime. So emotions are firing all the time. When you trade, they may be micro expressions. They're only about a 25th of a second, and you would never know they were there unless you were looking for them. But then you go, okay, I get it, I get an idea. Of what the emotion is. Randy, I get it, and I'm beginning to get that it's not a feeling, it's not something weak. The truth is emotions are just simply automatic responses to changes in the environment. They happen automatically. And. And it's been that way forever. But now, if you look at the components of an emotion, and we're primarily in trading, we're looking at fear and anger, fear and aggression. Okay? First thing is arousal. That's the body cranking up. That's your heartbeat going like that. And all of a sudden you feel that sweat coming out and you're all getting aroused, getting ready, ready for the fight or ready for the run. And the second one is feeling. That is the subjective experience of the emotion, of actually the chemistry of the emotion in the body. You get a feeling out of that, and that is when you know that thinking is compromised. Okay? And you want to be very careful about what emotions are giving rise to the thinking mind, because if they're the wrong ones, fear and anger, you're going to get some really dumb stuff going on. If you have things like impartiality, discipline, encourage, you have a completely different experience of that feeling state. The next thing is motivation. What is that emotion telling you to do? And the three trajectories that we now see as emotional motivation are attack. That, that would be kind of the anger route. Avoid, that would be the fear route. And approach, that would be the curiosity route. And what we want to do is we want to take that avoid and attack, and we want to convert it so the emotion comes forward in motivation from approach. You want to approach the markets, you don't want to attack them. You don't want to be fearful of them, you want to be curious about them. And the meaning. The meaning is the belief that the limbic system has created. It's called limbic learning. That becomes wired into your brain about your ability to manage uncertainty. And again, your P and L statement is telling you the effectiveness of that. That's the belief underneath all this emotion. And the last thing is temperament. That's your genetics. A lot of people are predisposed to be impulsive, adhd, predisposed to be anxious, a lot of things like that. And at the same time, if even with that predisposition, if you are predisposed to, say, anxiety, which I see a lot, you know, if you worry, if you're a perfectionist and have that, you're still going to have to learn to mitigate that so that the brain can be maintained in a particular zone that can trade effectively. So whatever you're doing, it's going to have to work that part. So there we have an understanding of the emotion.

And most likely, you guys probably had no idea that all this was going on. You just thought you had this knowledge. You were trying to apply it, and somehow it was just. You were going into tilt. No, you're being emotionally hijacked by very powerful forces that if you remain blind to. They're going to bite you. So.

What we got is when an uncertainty and risk are discovered, the instinctual programs, emotional programs are triggered. This is caveman brain, okay? This is the seat of your survival instincts. And remember, he or she cannot. They do not get money. When they see. When you see that thing bouncing around, it's getting close to your stop, and you don't want to take a loss and stuff like that. You're actually looking at how your caveman brain feels about that saber tooth tiger that it interprets is coming toward it for a meal. Okay? That's the way it's done. He's not thinking about, oh, it's getting. It's really getting near my stop. And that is a soft stop. But, you know, what happens is, man, I really don't want to take a loss, man, I'll taste them. I'm just gonna. I'm just gonna. I'm gonna. I'm gonna.

That's caveman brain. That's not thinking brain. That's caveman. So now you get it is that's what's happening. And the truth is, modern man does not see this going on. You have to learn it. You have to learn it. So here's the deal. Here's this thinking man brain that's far over on the right side, and he's looking at all his ancestry all the way back into the beginning of time and our lives. And we're bringing that. We're bringing that early, early hominoid brain with all those instincts. It's firing on instinct almost all the time into, like, homo erectus. And then you're getting into more and more hierarchy, and the anthropology finally get to homo sapiens. And what happens is that all that stuff from way back then is still coming into the present moment in this highly evolved thinking brain that you and I have that you think that you can take to trading with all your knowledge and all your smarts. You can be you. You don't even need to think about emotions. Well, the thing is, all those other creatures are highly emotional. And what you will discover is that you are not rational. You are a rationalizing animal is what you are. And if you get this, you go, oh, man. Oh, my ancestry is not going to stop following me. Denying the impact of the emotional brain on performance will cause drawdowns. That's what they do. And they will blow you up. Okay? And the deal is, you can learn to be able to soften this stuff and work with them. If you put your mind to it and you go through the training that allows you to be able to first notice that this has always been there. You just have a blind spot that you haven't been able to see and that you can really build parts of yourself up that allow you to produce the mind that can handle uncertainty. Now, what we want to. I want to show you this graph.

This graph.

Is actually how the brain works. You know, ultimately what happens is that.

Information comes in and what it's doing is it's at that salary at that sensory thalamus way there on the. On the left side. What happens is that your senses are bringing in sensorial information. And the very first stop it goes to, it's not anywhere near the neocortex, the sensory cortex up there. What it's doing is that hits there and it's evaluated on a really quick basis. Is this dangerous? Is this good? Is this something we need to attack? Is it something we need to run? What happens is that is taking.

Just nanoseconds, a decision is made going, oh, my God, this is an emergency. You know, like that trade's going against me, or, my God, that opportunity is going to leave me if I don't jump right now. And what happens is that it hits the low road. The information goes directly from the thalamus over to the amygdala, and it fires up the fight response, fight flight response, and you're already in action in 0.25 seconds. Meanwhile, if that sensory information comes into the thalamus and decided it's not a threat, then what happens? It will send it up to the thinking brain for evaluation. That's exactly what you are looking for in trading. You want your new brain, thinking, using it. But the thing is, is that most of us are not going to train the emotional brain to calm down and to have resources that allow it to send that information. Thinking brain.

Now that's called the high road. And it's accurate. And, you know, ultimately you're. You're then controlling the kind of thinking and evaluation that you need. Meanwhile, the thalamus has already made a decision. It's sitting on the low road. It's Quick and dirty gets the amygdala and you're in fight flight. And you want. You'll. After it's all over with you wonder what in the world just happens. Understand this. The emotional brain sees uncertainty as a threat. And you're in trading, you are dealing. That's the commodity uncertainty and hijacks the thinking mind's contribution to perception. Then you're in real trouble, because the emotional brain, the caveman brain, is going to be thinking, oh, my God, it's after me. Or it might say, oh, there's. That's an opportunity I have to jump into. And you know, it's not even in your trading plan. So you can already see that emotional regulation is absolutely essential if you're going to build a consistently profitable thing. Now, how would you experience this? Okay, well, let's see. You have entry problems, pulling the trigger. There you go. That's what it looks like. Okay. Impulsive trading. Have you ever jumped into trades that just simply weren't there? This is caveman brain. This is all that stuff. That same graph I showed you just moments ago, that's what this is. The trade goes against you, and you get all bent out of shape and you're going to get your money back and you're going to punish. There you go. You're back in aggression, then revenge trading. Oh, big time aggression. You've taken a loss and you're going to get it back. Caveman thinking, getting out early. Oh, my God. What if it turns against me? What if I lose? I already got. I've already got it. I better take what I've got right now. Yeah. Refusing to take a loss until.

That'S Saber Tooth tigers on top of you. It's not money. It's your life. You're going to fight to the last breath. That's your survival instincts. That's how powerful this stuff is. And what I'm asking you to really think about. I don't care how smart you are. I don't care how much money you've spent. What I care about is, do you have you built the emotional brain up to be able to handle the challenges that you're putting on its plate? Okay. And then winning and losing. You know what happens is that when I first meet people, they think, oh, Randy, if you can just help me get over this fear, then, you know, I'm home free. I'm great. And then what happens is that they finally learn to regulate that fear, and then they find the next demon on the trail. Winning. Winning creates euphoria. You win oh man, look at me. And that euphoria creates overconfidence. Overconfidence jumps into trades thinking they're going to win with no proof. So we're looking at that, going, okay, now I'm seeing the picture here and wow, how do we go about doing this? The first thing, excuse me.

Somehow this thing does not want to go forward. There we go. Okay. The very first thing in order to solve this really gigantic problem sitting right and hidden right in plain sight that you're blind to, is to become having a much better understanding of emotion and cognition. Okay. And how they work together. Because, because ultimately, as they said, mastering others is strength. Mastering yourself is true power. And that is the deal in trading. You're going to have to master yourself. The trading gods are not going to let anything hide. You're going to see the results of your belief in that P and L statement. And remember this, all thinking is emotional state dependent. Until you deal with emotion and the belief behind that emotion about your ability to manage uncertainty, you will never master the trading mind. So the question is, well, why not? Well, the thing is this is. If you take a look at this, we have two different movies and a reassuring lie. Man, the crowds are lined up for blocks to get into that thing. But on the other hand, an Inconvenient truth over there is not a soul. It's sitting over there wanting to watch that movie even though it's the truth. And that's what we do here. People don't want to do the hard emotional lifting of reorganizing the way their emotions trigger and work with thinking. The point is, is that you are actually an emotional being who rationalizes.

And what you rationalize is what the emotional brain has already decided. It makes it hard. No one wants to admit this, but at the same time you have to decide whether or not you want to be an effective, profitable trader or not is that you're going to have to master the self. All the self deception that you do, all the stuff you try that works. You know, you can live in denial on the outside world for a long time. My father smoked Camel unfiltered cigarettes for 52 years and he never, you know, people would say, you know, you really ought to at least go to filters there, you know. And he said, oh, I'm fine, look at me. And it wasn't until the doctor looked at him and said, Mr. Howell, you need to get your affairs in order. Only then was that able to break his denial.

And he got religious about everything then. But the thing is, Is, you know, he already had charred lungs. So it's the same thing. Here is what I'm asking you is to come out of your denial about the needs that you have to be able to build a trading mind and quit thinking, that the thinking brain knowledge is going to be the solution or just one more, one more trading coach, one more trading system, one more this, one more that, one more that. That's the reassuring lie. It's just right around the corner. It's not around the corner, it's right in front of your face, between your ears. That is what has to change. Because ultimately this is kind of the way it works. You have a perceptual map, that inner map. And what happens is that information, the external world has all this information coming in. It's converted to electrical energy and it goes into the brain and it hits these beliefs that you have. Those beliefs are things that you probably you learned in your family of origin, in your culture, all that kind of good stuff. Like, you know, highly competitive people, you know, they usually grow up in competitive families and that's okay. And it works really well in a lot of areas. But when you come to trading and you're competitive and you want to win, you already have two strikes against you. And this is actually something where you're going, I need to start examining my beliefs. Because beliefs are assumptions that take on the force of truth, okay? And cause you to see what you see. My promise to you is that you're seeing through your eyes. And the brain has never been out there checking out the world, that it's making these assumptions and it's making its best guesses, it's not to be trusted. Okay, Kind of like Groucho Marx, who are you going to believe, me or your lion eyes? And then they're wired into neural circuitry and they become invisible to you. They're familiar pattern, yet they're shaping the world that you see and act upon all the time. That's why you keep doing the whole stupid thing all over again. In which you don't see is so familiar, so ubiquitous that your brain doesn't see it, but your trading account does. And the question is, are you going to start trusting it to tell you the truth? You're going to. Because if you don't want the truth, if you don't want to learn from your failures, then you're not going to be able to learn as a traitor. So. And at the very core of this.

At the very core of this is a brain built to control outcome.

Even if it's a delusion. The chance of a human being living a lifespan 20, 30, 40, 50,000 years ago was about 5%. Okay. Yet they had to believe they were in control until they were. It built in. It was a very great survival strategy. It worked. And that control has to be given up in trading because it is an illusion. It's a, it's a, it's a reassuring illusion, but it is an illusion. This is the conflict that you're going to have to solve. The brain will not do it by itself. You're actually going to have to put some conscious input into this and start directing the experience that the brain has to be able to rebuild the way it responds to uncertainty. That's just the way it is. Now the question is, how do you go about rebuilding a fear based brain? And that's what we got into a probability based mind. Well, it's not easy, but it can be done. And it starts with an acceptance that what you are doing right now is not working. And the brain's reaction to uncertainty has to be rebuilt. Until you come to that, there's really no reason just well, I would just keep doing it because it's kind of like with an addiction. The only thing that really opens up the possibility of healing in an addiction is when the addict. And I'll talk in alcoholism because that's the training that I had when I was as a therapist, is that what you're looking to do is finally have that alcoholic hit the ground so hard from a fall that it knocks sense into him and realizes that he really needs, he needs a lot of help and he has to re. Change the way that he, he goes about living his life. Until that moment happens. Any amount of recovery type therapeutic input is not going to have any effect. So we're looking at it going, you first have to make a decision.

That you're going to have to find and learn a new way of building that brain. That's the first thing now to do that, the very first thing that happens is that we have to calm emotions down. You're looking at.

This is called the your keys stress graph. It's been around since the 1890s, but it's been that long. And you're actually seeing that okay. At first stress is pretty good. It actually increases attention, interest and stuff like that. And this in trading, what you would say is I don't want to be totally relaxed. So trades are getting away. My mind needs to be focused, alert and ready at the same time. It doesn't need to reach a particular Point where it's. So the stress, the cortisone is so heavy duty in there that it starts wiping out the thinking brain. Because ultimately what happens, that activates, that activates the body to trigger, to fight flight. And before you know it, you end up having strong anxiety. You have a meltdown. And. And it's very common in trading. But this is the. Again, this is since 1895, this is perfectly known. Now, the next thing is that how do you deal with the stress? How do you deal with the stress? Well, the very first stop is you learn that breathing and muscle tension are keys. They are the precursors to emotional hijackings. And that the truth is, the way you breathe right now and do this tomorrow, watch yourself, film yourself while you trade and notice what is going on in your face and your shoulders. You're gonna notice a lot of tension. You're gonna notice yourself holding your breath, panting. And what you're doing is saying.

Fundamentally, you're saying, please, stressors come take me away, get me to hijack, because I am not going. I'm not learning how to regulate my notional nature. And so therefore it's going to keep doing this. So you're breathing as you breathe diaphragmatically. That produces calm states of mind. If you don't breathe, it produces anxiety. If you hold your breath, it creating anger. So you're seeing that breathing styles have an enormous impact. The stress in your body.

That is the emotion gaining steam and ready to rock it out and take action. So the first letter line of defense is that you start altering the way you breathe and you learn how to breathe diaphragmatically. And that will slow it down. But the truth is it will get it to the point where you can manage the intensity of the emotion. But the problem is that it will not get you to the door of the mind. It will not get you to the place where you need to be able to look inside the mind and what's going on. But understand it's absolutely necessary, because if you can't regulate the emotion, you're never going to get to the door of the mind anyway. But in emotional regulation, it gets you there. And now you have to learn to manage emotion. You have to learn how on earth is this working? And then you go, okay. The second skill is mindfulness, awakening the observer. What you're going to notice, you have the ability of stepping back on the right hand side of this graph. You're seeing the guy outside of thought. He's watching his anxiety, he's doing that he's not participating in the anxiety. You can learn to do that, okay? And it's, there's, that training has been around for 2,500 years. I use a form of it. And on the other side, it's often very easy for people to get caught up in their thinking and all of a sudden they identify with their thinkings. I can't do this. I can't do this. I, I, I, I, I, I. You know, what you're telling me is that you're speaking from your orphan nature and you've collapsed. So this is the second thing. And usually when people first start trying to do this, what they discover is that, oh man, they've been so caught up in it that they don't know how to separate from thought. And you have to learn to do that. And that's the training in mindfulness. So you do that and what happens is you begin to discover something. It's here that you can become the designer of the self that trades. And I would also say that this is where you also become the master of your own destiny. So the deal is this. The observer in you has become so fused to a set of beliefs and biases and assumptions that you don't even see it. You just think that's you. You just think that's reality. No, it's not. That's a reality you're creating. But a really successful trader is not living in the same reality as you. So the deal is this observing function takes you and takes in that fusing. It takes it apart. Okay? And that's where magic can happen. Because this is where you can begin to rebuild what I call the trading committee of the mind. Because ultimately your brain in neuroscience is considered to be a community of rival emotional programs that, that are duking it out for control of the construction of the self. This thing called mind is where those emotional programs are given voice. You can start hearing your thoughts. You can say, oh my God, I'm falling into self doubt. And instead of being that self doubt, you can pull back and you're going to hear an argument going on. Or if you hear impulsive thinking, get in, get in. You begin to say, oh my God, there's just thoughts running through my brain. Who is this? Who in the world is this? The real question becomes who controls the trading committee? Okay. If you choose to remain mindless and say, randy, I'm not going to fall for this stupid stuff. This is. You're saying that we all have voices in the self. Well, I'm not crazy. What I'm saying is you are crazy to believe that if you cannot, if you cannot manage this community that has now been given voice in your head, you might as well just go find something much better to do than trading because you're going to have to have, you're going to have to master that internal dialogue. Okay, so then what do we do?

This is at Skill three. This is where you actually find the internal dialogue within you. You begin to say you know something under stress and uncertainty. This internal dialogue is what you hear in your head. That's where. Oh my God. Oh my God, I'm going to lose, I'm going to lose, I'm going to lose. Or oh, I better take, get in there getting in all that stuff. And what you'll discover in there is something very dangerous. I call it the inner critic. That's the judge that judges you. That's the criticism. That's the ramping up of get in, get in, get in, get in, get in. That's the inner critic. It's not you, it's you as an observer. Fuse to that inner critic. And suddenly the inner critic is just taking over this trading committee and doing damage. Okay. So you have that choice.

And you have to recognize that, oh my gosh, this is all. This is electrical current at 30 watts running through my brain. And it's that electrical current has a voice and it's talking and there's more than just one electrical current. There's all sorts of special interests. This is the way neuroscientists look at the brain these days, guys. And you're looking at it and going, oh, I have special interests areas that are organically transmitting electricity. Yep. And it just so happens one of those, the inner critic, that is that judge, one of them is this orphan that is your fear or your aggression base. They are electrical patterns. That's what they really are. Now.

And understand this brain is built for the certainty of short term survival. And in trading that is being attacked is that it doesn't know there's long term what there. What happens is those trades represent not money, that that is life and death. And what happens is this fear based mine is going to look like that guy on the right. The aggression based mind is going to look like that guy on the left. Okay. That is your choice. If you do not manage the mine, these are the parts that automatically fire and take over your trading mind. And this is who's doing your performing. Until you decide to say, I'm going to separate from this. I'm going to start working with This I can master this. And ultimately out of that.

Out of that is your primitive emotional brain will trigger to fight flight. Okay. However, as you go and you build these particular emotional programs and the ones that I'm keenly interested in are basically discipline, courage, self soothing and impartiality. Those create a new mindset and out of that you have new results. Now what I would encourage you to do, this is actually a take from the movie Inside out, the first one. And this is how neuroscientists helping cartoonists build a mind of a little girl. And what happens is over there on the left, you have anxiety. The green girl is disgust. The one that's blue lying down like that is sadness. The trippy one right there is joy, and the red one right there is anger. These are emotional programs that are constantly duking it out to create the mind and build the self that runs this little girl's life. And she gets in trouble, of course. But I want you to start being able to conceive of your mind acting this way. And when you do that, what I also want to recognize is this. Those are emotional programs. But what you are looking for is to build a set of emotional programs where you have the courage of a warrior.

You are actually seeking out your dragons, your fears, not to conquer them and beat them to death, but to master them. Okay, that is hard because most of us just simply we have bravado when we don't have to think face the dragon. But suddenly we become a lot smaller person when the dragon's there. But the thing is, the courage of a warrior is an emotional program that is there that you can learn to pull forward as an active part of the trading mind. Also the discipline of ruler, here I'm using, here I'm using George Washington. You know, George Washington had the opportunity to become king, but what happened is that that is not the principles that the United States was built on. And he decided after two terms, he had had enough, he went back to Mount Vernon. But he also is the guy who slept with his soldiers at Mount Vernon. Without him, the United States would not be here. That leadership quality, and by the way, he started out as a surveyor, okay? That quality, that discipline of a ruler also lives within you as an emotional program. It can be activated, it can be brought into the working mind. Also we have the impartiality of a sage seen by Spock here. And what that is is clarity of thought. Okay? That right there, if you have the courage of a warrior acting the discipline of ruler acting and the self compassion Of a caregiver acting, you actually produce a space where this newfangled part of our brain can show up and can actually act with impartiality, with clarity of thought. And that's who you want making trading decisions. But probably the most important one in here is actually the self compassion of the caregiver. Beating yourself up is not going to help you become a better trader. I've never seen that work. However, if you start soothing yourself, calming yourself and having compassion for yourself, it will help rewire yourself a lot faster than the other way. So those are the pieces that you want to pull forward. It's things that we teach how to pull that forward into working awareness that changes the ball game. Okay, Even there, what happens.

These emotions are the ones that give rise to the probability baseline. Okay? Which emotions will trigger is a matter of which ones you design to create the mind that engages uncertainty. Just so happens you fell into a mind that is not going to work unless you got really, really lucky. So the deal is you're going to have to make that decision. And out of that.

You'Re going to have to decide, you know something.

I can do this, I can build this. I have to calm things down. And out of that, what you discover is that that successful trading mind is focused on performance. It's not focused on winning or losing. This guy is not in control of the mountain, he's not in control of the snow. The only thing that he controls is the mind that he's bringing into that moment. And if he does that, he gets a great ride. If he doesn't like that, he wipes out. The deal is you can't control outcome, but you certainly can control.

The mind. You bring into the moment of a test, of a challenging moment that you control. That is the psychological edge that you need to be able to drive your method. Edge, okay. That is the trick, my friends. And ultimately what you still have to do, you, you have to turn toward those fears and master them with these developed aspects of yourself Rather than.

The brain that got created from evolution. And from the first few years of your life, what happens is you are reinventing that and building it to the one that truly can master the moment. And I can speak with authority on this because.

You have no reason to know, but I've had a heart transplant and spent two years or so at death's door during heart failure. And you really have to master the demons if you're going to live through that. So the thing is, as you bring this committee to face it and you have a Much more powerful way of dealing with it. And you are no longer trying to control outcome. You're doing the thing that you can do. You are controlling the mind. You bring into the moment, friends, that is the edge. That is the edge. And ultimately it kind of looks like this as you look at these guys right here. This is a struggle. That's really serious water. And what you discover is everybody is focused not on, oh my God, this is big water. They are focused on their performance. Okay, that's what it looks like. That's what championship, peak performance mind as a group look looks like. You're capable of doing this with the committee of the mind that you have in trading. And basically what I'll say is this, it's the way this looks. I teach a process and ultimately the very first part of that process is waking up realizing that you're going to have to rebuild a mind and a brain. But the first stage is emotional regulation. You have to learn to be able to control or manage the intensity of that emotion so that it doesn't sweep you away. That's quite a lot. The second stage is mindfulness of where you realize that you and your thoughts are not one in the same. In fact, you're not having thoughts, emotions or beliefs. They're creating your experience. And stepping back out of that, you realize, oh, I've been blind as a bat. I need to wake up, I need to look around, I need to start awakening this observer part of me so that I can rebuild the brain, the mind for a much more fulfilling life, including trading. The third is once you start this, you need to disrupt that internal dialogue that's telling you you can't or go get that money you get, it's easy money. Block all that stuff. All the thing of where the self learning beliefs show up and stuff like that, you need to, you need to disrupt them. You need to know they're there instead of running from them, hiding from them, need to say, oh, I'm going to develop the skill sets to master this. At fourth stage, you are building those skills, those emotional program skills to build a mindset rooted in discipline, rooted in courage, rooted in compassion, rooted in impartiality. That is the mind you need to march into the challenges of living. Okay? And then in stage five, that's exactly what you do. You've got the mind and you're intent on reorganizing the trading mind. You know, it can be done. You know, the orphan nature needs to be taken care of. You know, the inner critic is going to try to Slam and blow up your trading account and you're, you're vigilant. As Thomas Jefferson said, the price of freedom is eternal vigilance. And friends, this is how you solve that biggest problem. And.

To be honest with you, we have. If you have just learned about me, go to my website and get my free book. Okay. That would be a start. Start reading the article, start going to the website. I mean start going to YouTube. I've got I think last counts 280 or so videos up there about this. Start, start learning about a subject that you've just discovered. And then for people who have done all that, they're looking at that and, and they're saying well I want to train myself and get my book. And then what happens is we have two avenues of training. One is a group course that we have one right now and the next one is I'm not sure when it, it's going to be.

Okay, March 20th. So and I encourage, if you're thinking about this, get in early because the more you're prepared for this journey, the better it. Yeah. Before March 20th most people actually join the course a month or two before the course actually starts. They want to make sure they've done the emotional regulation work. And if you do that, we're going to give you for a reward for that. We're going to give you something you can go to our website and pay $199 for. And it's an emotional regulation workshop. We want you there, we want you learning. It's a powerful course. The second thing is the individual course. It is, it's 10 sessions with me with a multimedia graduate level course is what it is. It's very powerful. It digs, it gets deep and it is, it's, it's for people who say yeah, I get it. I'm convinced Randy know what he's talking about. And I finally found somebody that I think I can trust and work with me at a great depth. That's what it's for. It's highly comprehensive, very personal and generally lasts between three or four months. So friends, these are what we offer and it's something where.

I wish you well. I would love for you to become successful traders. What I know is most traders just simply are not, they're not willing to work on themselves. They're not willing to look at it and say, you know, my brain, just because it's a human brain just isn't working and I need to train it. But now I want to thank you for coming and I'll answer We have about five minutes and I'll answer a few questions if they're. If you have any. Here's Ron. Is it possible to watch this webinar again? Yeah, it's being recorded right now and it'll be available probably in the afternoon tomorrow.

Oh yeah, it's going to be on www.mytraderstateofmind.com. it'll also be on my YouTube channel. Okay. If you type in Randy Howell on YouTube, you'll be taken there, no problem. Okay. Are there any other things.

That'S not complicated. Good. Okay. Well, now I don't mind. Let's see.

We don't see any other stuff. It looks like we get off an extra four minutes. Yes. So I want to thank you for being here. Okay. It's been a lot of fun and I love, I love the outreach of doing this and opening people's eyes and minds and. Oh, here's one. Is spending less time on the charts beneficial? Yes and no. What happens is that it's really. I know people spend a lot, they love the charts. They do a really great debriefing. They do a lot of that stuff and that's just part of their day. It's really more about, it's really more about how stable your mind is and how much you're taking care of that mind. Is that. My own view is that you should never trade for more than an hour at a time. And you take a 20 minute break to be able to refuel the brain. And while you're doing that break, you're doing anything but trading minds. Okay, so are your students more profitable profit based on daily charts rather than day trading? You know, Rachel, I actually don't know. I can't answer that question because I don't know if they are or not. I.

I work with day traders and some tring traders. Let's see, here's mosh. I was profitable and got payouts and suddenly I lost my account and failed. More funded, couldn't get back to profitability. What do you think the problem was? I think it's called overconfidence. I think you got started winning and you didn't know how to win and you started feeling good and you trigger dopamine and started having euphoria and you got overconfident and you lost your cool. That's, that's practically everybody who does what you did. That's the way it works. And here's Ken. I'm in the current group. Yeah, Group. Okay. Can I get the emotional regulation workshop? If you had Gotten in early, then it would have been given to you. And if you did get early, just contact Dolores.

No, you can't. I mean, I'm sorry, Ken, but the thing is, is the course you're taking is far beyond the emotional regulation. And at 103, which you should be on right now, you should just be working your ass off getting ready, because that's a powerful, powerful thing. That's. That's where you need to be. Carl. Sorry, I meant. I meant, is spending less time analyzing the charts outside of the trading session beneficial? I think you need to have a life. You know, I think that trading needs to be part of your life. But I don't like people being addicted to trading. It's. It's like it can become a defense about anything else. You. You insulate yourself, and I. I want you doing other things. But in saying that is that.

You need a break from trading and how much is enough and how much is not enough?

You know, it's really about effectiveness. Okay. That's the way I would answer that. But I know a lot of people who over chart. They. They just. And what I'm really saying is they're doing that to compensate because they haven't really. They haven't paid much attention to their emotional nature, and they haven't really gotten in charge of their emotions. Building the mind to trade. And when you do that, you don't need to try to. Hi. You don't need to work imagining that you. If I just work more, I'll be a better trader. That's not the way it works. You. You make sure that you have. You're able to manage emotions and create a mind, then I think you would probably be in a much better place. Mosh. I got profitable after I found you seven to eight months ago, so thank you. You're welcome for this tip. How could a person deal with overconfidence? Well, depending on if you're in the group or whether or not you somehow did this best by my YouTube stuff, is that ultimately, after each trade, win or lose, what you have to do is you have to recenter yourself. And most people who start winning, they need a lot of exercise to burn out the euphoria. Okay. And then what happens is they need to recenter themselves and recognize something very important. Your winning didn't mean anything. It just meant you landed on the right side of probability. It doesn't mean that you've arrived. It doesn't mean that you matter. It doesn't mean that you're powerful. It just means you landed on the right side of probability and that you had an edge in your, in your, in your. Either in your psychology and or your methodology that allowed you to land on extraction more than inclusion putting money back. So the thing is, is that it's called. It happens to every trader. Every young trader goes to this thing. They think they can get past fear and they. They really don't recognize the euphoria is far more dangerous demon than the fear was. Okay, okay, friends, that's it. I want to thank all of you. It's been a lot of fun and until next time, take care. Bye bye.