Mastering the Emotions and Mine When Riskng Capital

There comes a moment in the evolution of a trader that they really have to look back and stand and say, what? What's going on here? They have the knowledge base, they have the intelligence, they have the winning desire, they have the motivation. And yet what they do is they keep looking at their trading account and they see where it's at and they see the potential they have in trading. And they realize that something's blocking them. And by the process of elimination, they discovered that it's them. It's their own mindset that they're bringing to trading that blocks their ability to take to the next step. And this is where we go. Ultimately, trading is about mastering emotions and mastering the trading mind. That's what we want to look at here. What does that require? The very first thing is that we have to take a look at this whole notion of biology and mind. And what most traders don't get is that mind and emotion cannot be separated and that thinking is not king. We often think, well, I should be logical, I should be rational. I should be able to push emotions out of the way. Well, the answer is no, you can't, is there's no time. You're not an emotion. As a matter of fact, what you call reason is not reason at all. It's rationalization.

Man is not a rational animal. He's a rationalizing animal. And you start to begin to realize that Descartes was wrong. You know that guy said, I think, therefore I am. We think of mind as supremacy, and we think of motion as something that happens. No, it's the exact opposite is that emotion is the horse that drives the cart. The cart is the mind. And we begin to realize, wow, we've put it backwards. Like Einstein said, mind is a wonderful servant, a terrible master. And that's what traitors have to recognize. They may have what they think is a good mind, and it may be in other areas of their life, but in trading it's not. It doesn't work in the environment of trading. And all of sudden we realize, wow, what is it about the emotional brain and the thinking brain that are so at odds with one another? Well, they have two very different purposes. The emotional brain is all about survival. It wants to control environment, outcome, it wants to make things happen, and it wants to be right based on that formula worked for evolution, it worked for success of the species. And it's wired deeply in us, and it's still with us. We call it caveman brain. The thinking brain is the part of the brain that allows you to be able to Think in probabilities, okay? And so vital for trading, we have to be able to think in probabilities, not feel that we think in probabilities.

What happens with traders is that they believe, okay, I know how to do this. You know, I can think in probabilities. I know it's about probabilities. I can't win every trade. Blah, blah, blah, blah. They're talking the talk, but when they're risking capital, it's like a time bomb went off. They discover is that that's not what they really perform as anyway. What they do is all of a sudden.

Capital gets put at risk and everything blows up. That's because the emotional brain relates that vulnerability and putting capital in that vulnerability, it relates it as a threat of death and it triggers to fight flight. Despite what you might think, you want to think the old brain, the caveman brain, the emotional brain is going, no, this is a fight for our lives. We have to be on it. And all of a sudden you get over trading, you get revenge trading. You watch people not being able to pull the trigger. You see people getting out of a trade going, I don't know what was thinking, I don't know what I was thinking. They come back to their senses and that's what they say. I got possessed. Well, in some ways you have. What you did is you got hijacked by your survival instincts of the emotional brain. That emotional brain sees uncertainty and as a biological threat to its existence. The moment that you have risk, have uncertainty and capital risk, you trigger that fight flight response. And that's what's happening to you.

That's the brain you brought. And that's why I say is that the mind you brought to trading is not going to be the mind that's going to produce success in trading. It's going to have to be different. You're going to have to retool the way the brain and the mind work together.

First you have to recognize that emotions are not optional. Okay? You don't have freedom from emotion. You have freedom of emotion if you work at it. And that thinking is emotional state dependent. So wherever your emotions are, when triggered by uncertainty, there's your thinking. Very few traders bridge that gap.

They want to control outcome, they want to win. But they can't seem to get the idea that no, I have to bridge the gap between survival thinking and probability thinking. Well, how do you do that?

The first and foremost thing is to recognize that an emotion is biological. It is not psychological. It takes over your psychology and it's all about Avoiding risk. It's all about survival. It's all about controlling the outcome, making things happen and being right. And yet when you get into trading, what happens is you have no control over outcome at all. You never know what's going to happen. You're already producing the emotional brain to get into fight flight right there. Then you put capital at risk and suddenly the vulnerability of uncertainty triggers to fight flight. And there you are.

This is a glitch. If you want to be a successful trader, how do you solve that problem? How do you fix that problem? The first step is to regulate the emotion. Learn how to regulate the emotion. Remember what I said earlier is that emotions are biological. By being biological, they have a biological signature. That signature is part breathing, it's part muscle tension, it's part heart rate. And when you start looking at that, you're going, well, my breath controls a lot about the way the biology is going to produce the emotion. It controls literally whether or not you are, you remain calm or whether or not it triggers on fight flight. So by breathing, you can actually alter the emotion. Same thing with muscle tension. When you feel tension in the body, that jaw, that shoulders, all that stuff that happens when risking capital. What you're doing is feeling emotional arousal heading toward fight flight. And right now you don't have the skills to be able to pull it back off the edge of the cliff. That's what you have to learn by those three. By looking at heart rate and knowing I have to keep it lowered within a range, I know that I have to let my, the tension of my body calm down. And I know that I have to start breathing in a different way to be able to dampen the emotion, to keep it under regulation. That's a powerful thing because you don't allow the emotion to trigger into fight flight where all the crazy stuff happens. That's where all that possession stuff and just getting hijacked takes. But even there, understand this is emotional regulation only gets you to the door of the mind. It's inside the mind we want to go. And we have to develop a skill called mindfulness to be able to take a look at our beliefs, at our thoughts, not as who we are, but as who has captured the organization of self.

Check my website for more information about that. The key is what you're really looking at is going in mindfulness you learn that my thoughts and I, my beliefs and I are not the same. There's a difference between the awareness of the thought and the thought itself. And you begin to realize my thoughts and beliefs Just represent one construction of a self that adapted to survive in a world. And what you're discovering is that world, no matter how successful you were back then and there, it's not working in the new world of trading. And you have to say I need to alter my beliefs that I'm projecting onto the screen of the markets and you start to going, okay, what I know is that I'm prone to fight flight, that's the caveman living within us and that I need to be able to regulate that. But at the same time, my experience with managing uncertainty, what did I learn about it? And most people discover that ultimately they really don't have a good fix on being able to engage and manage uncertainty successfully with a calm, cool, disciplined manner. And that has to be reworked. You get down to the belief of where you literally start reworking the belief about your ability to manage uncertainty. That's where the magic happens in trading. Suddenly what happens is the uncertainty doesn't change the challenges of trading, doesn't change the potential of losses and gains don't change. What changes is the mind based on your beliefs that you bring into the moment, engaging uncertainty. And by doing that you change the conversation, the biology and the mind have about your ability to perform in the midst of uncertainty. When that happens, you're no longer trying to win or lose, you're focused on performing. When you're focused on performing, you can control that and that's what allows you to take the next step. You get performance mind rather than winning mind. You let go of winning and say what I can do is I can perform. I have no idea what's going to happen. Controlling outcome, winning is an illusion. However, what I can control is the mind I'm bringing into that moment of performance. And friends, when you have a working methodology that gives you an edge, that's the mental edge, that's the emotional edge that you need to be able to drive your method edge. That's how you do it. It's not easy. You're not going to use affirmations, you're not going to use visualizations, you're not going to use tapping, you're not going to use NLP to change that deep seated belief. You're going to have to use emotional intelligence which by the way we teach, we teach you how to go in and correct the beliefs at a, literally at a synapse level that allow you to change your response to uncertainty. And that's the trick friends, that's the piece you're missing that allows you to move the mindset from kind of blowing up and messing up to where it's comfortable with uncertainty. To learn more, go to our website. Get the free book for goodness sake. Learn more about it. Read more articles, watch more videos. Start looking at the course offerings because those actually teach the how to go about changing the belief system that engages uncertainty. Come and see us. Friends. Thank you for your time.