Understanding Fear and Learning to Master It

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Hi folks, my name is Randy Howell with my Traders State of Mind and I welcome you to this July 2019 webinar. It's gonna be an interesting one because we're gonna be exploring, really beginning to get underneath the surface of fear and how that fear manifests. And more than that though.

Is how do we end up mastering our fears? How do we master the fears of entry? How do we master the fears of oh my God, if I don't take the profit now, it's going to get away from me. And what about those trades that go against you and your heart just thumps and thumps and thumps. We want to begin to understand fear so that we can learn to master it. We already know it's there and most likely whatever you've done has not been working or you wouldn't be here. You wouldn't have finally arrived place where you're saying, you know, I need to really take a look at how my trader psychology, how my mind and my emotions get together under the stresses, under the challenges, the extreme challenges often of trading. So we're looking at that. Before we get started, what I want to do is I want to give a couple of shout outs. Okay. The first is I want to give a shout out to James Leon of Realtor Trading Group, that's in Ireland and there's a group of you guys that are here and welcome. I really appreciate that. And the second thing is my friend David Debay is here from Polaris Trading and he has brought, and I'm honored for this, he has brought some members of the PTG Seal Team 7. And these are guys to train the seals people. They're the ones who teach. Yeah, Navy SEALs, yeah, those are Navy SEALs. Those are not mammal cells. These are the name, these are the powerful high end warriors that America trains to do some of their most diabolical work and most challenging work. And these guys would have an enormous understanding of this. And what I want to do is have you understand that the military sees mindfulness, which we're going to be talking about tonight, is something very serious. They have recognized something like this. They don't call it mindfulness though, they call it zeroing the mind. And what they do is the military is testing mindfulness to train the brain so warriors can zero that mind for increased attention, focus and calm under extreme conditions. And this is, it's particularly being done at the Virginia Military Institute and at Fort Drum and by a guy by the name of Lieutenant General Piet so what you're looking at is you're seeing this interest from the military to help warriors under enormous stress. And what I'm going to say is this is, I want you to think about that, is that no, you're not having people shooting at you, but what happened is you are in your emotional brain, you're triggering the fight flight response or could be triggering it. Every time you trade, every time you approach uncertainty, what's going to happen? Have risk. And to understand to the primitive brain that risk means the fear of death doesn't mean I'm risking capital. Managing risk is managing your life force. Then having this happen in such a short period of time, that's what just blows the brain up and blows the trading mind up. So we want to take a look at this and where we start. Did you know something? Every trader wants to hit that, that vein of gold. That's what they get into stuff for. And they say, you know, if I just keep at, if I keep working hard enough, then I'm going to finally get it. I'm going to get there. But somewhere the endurance.

Kind of goes down, somewhere the hopelessness kicks in, somewhere maybe even the shame kicks in and you begin to say, man, you know, if I only did it a little bit more, a little bit more, I would have broken into it. And yet what we do is we keep using tools that don't really allow us to find that vein of gold. And part of that happens in trader psychology. Very interesting. I work with a fellow who's an accomplished trader. He has a number of, there's a number of people that he's trading training and he was actually, actually going to supplement the ability for them to work with me. The three of them declined.

They're not successful traders. And Rob's gone through my work and he knows its value and he's saying, no, you got to learn how to do this. It's a, it's 80% mind, man, you got it, you got to get this down. It's only 20% methodology. And yet they don't do it. They, they have the endurance, they have the desire, but they can't somehow get there. So what I want to do is say, you know, you know, it's a numbers game, but you know something what keeps faltering? Why can't you treat it like a numbers game rather than it's a life and death situation? Let's take a look at that. The truth is this. No one told, no one told your survival instincts of your emotional brain. Let's Call your caveman brain that never told him that news, that it's a. It's a numbers game. The very notion of winning and losing, of euphoria and shame that are associated with winning and losing gets traders into trouble. And what we're going to be doing is we're going to say, you know, how do we. How do we step back out mindfulness? How do we step back out of that conversation in the mind about winning and losing.

And take on a very different mind, the probability mind, that's focused on performance rather than outcome. That's what we want to do, is we say, wow.

The key is that your deeply primitive emotional brain understands winning and losing very differently than your thinking brain does. And unfortunately, under stress, the thinking brain doesn't matter.

Your brain is programmed to be a very bad traitor. The moment, I might add. That would be the same thing with combat. One of the big deals in combat. You throw someone into a combat situation where it's hell, where it's chaos, and suddenly everything that they've been trained to just falls apart. The key is when guys like, you know, the SEALs are involved. What you're doing is you're talking about highly trained people who have been trained to exist in the moment of chaos. It's a powerful deal. And here you're looking at an image and you're going, you know something?

What a primordial creature, the shark. Okay? Knowledge is never enough to overcome the survival instincts of the primitive emotional brain. The key is you have to have something else. Every time there's a conflict between emotion and thinking, emotion is going to win. As a matter of fact, the kind of joke what we think of as reason is actually rationalizing what your brain will do is that left brain, that rational center that we call it, actually rationalizes, makes an explanation that supports whatever the emotional brain has already said. So your ability to keep. Keep that mind, keep that emotional brain centered and focused in a couple of different emotional programs rather than fight flight, is the difference about the way you come to grips, say, with this risk factor represented by that shark. It can turn to fear or it can come to risk fact management. What do you want to do with it?

Oh, I am so sorry. Something I should have said. I got all caught up with the Navy SEAL folk is that I hold questions toward the end because a lot of the stuff that I'm doing is going to be covered. So please write the questions in, because I will cover them at the end and it'll give me a start. And I'm really glad that you, you wrote this one. Is that. I'm going to answer this one of it. The lizard brain, actually the brain stem. And it's, it's grossly misused. I use a tree. Try in triune interpretation of the brain. Where there's a brain stem, there's an emotional brain and there's a thinking brain. And a lot of people mess up and they keep talking about the lizard brain as if it's the lizard brain is the brain stem. It's the, it's the, it's all that.

Truly that stuff that simply is automatic. Like you're breathing and stuff like that. And when a lizard experiences fear, he does not feel fear, he acts fear. You have to have an emotional brain. That's the mammalian brain, the caveman brain, for it to start filtering through all that. Okay, so that's that in the thinking brain we actually want to get online. But what we're looking at here.

And what I want you to do is, yeah, you're looking at this guy facing a big huge brown bear. But what I ask you to do is where do you have problems in trading? Put yourself right there. You know, whether or not you freeze trying to pull the trigger, whether or not you just absolutely go to pieces when the trade goes against you, whether or not you just, just absolutely have to take that skinny profit. Right, right. Then before it's taken away from you all those places, or when you win, you get euphoric and just lose your mind when you lose all those places. What I want you to see is see the fear rising up as not just an existential danger, but it's something that to the emotional brain is quite a physical danger.

It changes everything. Because ultimately the emotional brain is not. It's not thinking about numbers, it's thinking about life. And if it's, if it's stressed, it's looking at a challenge to life and it's pre programmed to go to fight flight. That's not good for the trader. Okay. And yet most traders insist that they're going to find a workaround and they don't realize that. No. Fear is your teacher. You have to master the fear. So we get this and then it comes down to this. And this is back to the lizard stuff. This is your limbic system. This is known as the, as the emotional brain, the mammalian brain, the caveman brain. And what you notice is all that big old cortex around it. That's what makes us humans so different. But then you look at this U shaped deal and you're looking at this amygdala that little almond shaped thing that looks like it's on the end of two hands. Then you look at that little peanut looking thing called a thalamus. And then you look at the hippocampus. Ultimately what happens is that thalamus is what we call the traffic cot. It's directing traffic. The information coming in, all the sensory information coming in. When it finds a match, that's dangerous. What it does is it makes a decision, am I going to send that information to the thinking brain, the cortex, it's slow, but it's very thorough. But what if it's dangerous? Well, if it's dangerous, we're not going to send it to the cortex, we're going to send it to the amygdala. We're going to send it to the amygdala. So there's fast action, nanoseconds, it's acting in.003 seconds before thought even emerges. Thought, if it ever even gets there, emerges about a half a second later in the cortex. So when you see something on a chart, when you see something going against you, it's already triggered, the emotion's already there. And you're not going to out think an 800 pound gorilla. Then you look at that hippocampus down there and that hippocampus is going to make a memory. It's going to start saying, well, I'm going to remember that one. Next time I see, the next time I see him and the trades going against him, boy, what I'm going to do is I'm going to run this thing up to the thalamus and I'm going to have that traffic cop redirect traffic to fight flight real fast. The emotional brain does not think when it detects danger. Emotion becomes fused on short term survival. And you do not have number a number's brain, that cortex, the numbers part is gone. So let's take a look at this. We've gotten this and go. Is fear the real enemy? I want you to listen. This is Sun Tzu was a very, very famous author in China and was a great warrior. And what he says is, if you know the enemy and know yourself, you need not fear the result of a hundred battles. But listen carefully. If you know yourself but not the enemy, for every victory gained, you will also suffer defeat. And this is the deal, friend. We don't know the enemy that lives within us and we constantly don't want to see it, we don't want to deal with it. And it keeps absolutely snapping us, it keeps ambushing us. At the exact wrong time, we need to turn toward that enemy, that fear, and we need to learn to master it. So really, fear is more of a symptom, okay. That allows us to deepen. Exactly what's the problem? How do I design the mind that we can actually go against and figure out how to do this? And here it is, man. I'll tell you something. Have you ever experienced this? Oh, man. This is that fear of loss or foma. My God. You're seeing that go the wrong way. In this particular case, he obviously was not anticipating a short, okay? And he's looking at this going, oh, my God, I'm eating up my capital. I'm eating up my capital. I'm eating up my life. The saber tooth tiger is eating me up. That's what the emotional brain's thinking, okay? Now, you may have it differently. You might have emotional responses, like to these perceived threats of revenge, trading, attacking that threat, or to the ability to make up for prior losses. Revenge trading or winning. If you win, what happens is. Oh, my God. You know, what happens is, boy, everything's cool. I've got it, man. I'm in the groove. I'm in the zone. There's nothing worse than for a trader to start feeling good after victories while he's trading. What that does is that messes up the trading mind that needs to be rooted in discipline, impartiality. Suddenly you got euphoria and dopamine kicking in there, just messing up the way the mind perceives uncertainty. Your dust. And this is what. This is what we really see right here.

When you experience the challenges, stress that's in the trading lingo, that would be putting capital at risk with an uncertain outcome. Once you realize I'm not in control of outcome and it's uncertain, what happens is all this cool stuff, that higher cortex, just nothing happens. That brain stem is pulling in information, and, boy, it wants to react immediately. That amygdala, with all its partners in the. In the limbic system, is firing, and it disables your ability to think. That's what it does. Amazing. That's why. That's why emotion overwhelms reason. This is the way your brain was designed by evolution.

Okay? Natural selection. What we want to do is we want to change that brain because we don't want the brain that we got. We want a new brain. We want to become designer of the brain. It just so happens that learning to regulate emotion, learning to be able to be mindful of the mind, and being able to construct a new mind is essential to be able to become a consistently profitable trader.

So what we discover very quickly is this, is that your brain, and this may be a bias you have is your brain wants control. You know something I have, even really good traders will come to me and say, you know, Randy, I damn well knew what the markets ought to do. I just wish they would comply with me sometimes. And you see them wanting to be right, wanting to be in control, wanting to be able to predict the outcome, when in fact people have been around a lot realize, oh, there is absolutely no prediction of the outcome. You have a probability.

But it also has a real lost potential. And the key is you begin to go, whoa, are you telling me my brain is set to control outcome and to be right? Yes. And it's actually trying to do something that's impossible. It's an illusion the brain keeps feeding into and it blows up the capital of many, many a traitor. Because they keep wanting to be right. They keep wanting to be in control. They keep looking for the holy grail, they keep looking for the teacher, they keep look looking for the methodology. And what they discover when you start talking to really good traders, you know what they say is that the methodology, you're actually, you know, your Strategy is about 20% of the deal. The real deal is emotional discipline. That's the deal. Unless you can produce emotional discipline, that's 80% the ability to be consistently profitable, then you're not going to ever, you're never going to hit the, you know, you're going to hit that goal line.

So what happens? Well, here it is, you want to win and then you want to make up by prior losses. So you keep winning and you have this notion, I want to win. From a short term survival perspective, man, this makes all the difference in the world. But the truth is, are you in control of winning and trading?

No, you're not.

What happens when you try to control something that can't be controlled? You get frustrated and eventually what you do is you start finding avoidance ways of avoiding getting into trades. You flip out when the trade goes against you. You start jumping out of trades when you have a skinny profit. You don't let it go to target. That's what you do because you're keeping on insisting about winning rather than recognizing that you don't control winning, you control the mind you bring into the moment. So what do we do here?

This is really the big thing here that what, you know, if you think baseball, what I want you to do is how uncertain baseball is. They have all these statistics America. This is American baseball. Well, and same game in Japan. The other people play baseball. But, you know, if a guy, a batter, if he hits 300, he's a Hall of Famer, yet you take a look at that and go, wait. You know, come to think of it, he's only Getting base hits three out of 10 times. He's losing a lot, he's grounding out a lot, he's flying out a lot, he's striking out a lot. And this at the same time, what you discover is that you keep believing that you can make winning happen. That's the, the problem with an alpha. And this feature of our ancient brain is the biggest impediment to your learning how to trade effectively, friends.

Actually thinking that you can corral, you can control uncertainty like this guy's doing. He's roping in. He's roping in uncertainty like a steer. And the truth is that's just not the way it works in trading.

The very mind that set on winning. And interestingly, I was talking to a guy the other day and he used to. He got trained by a very large firm at the opening thing of which they paid a lot of money to go to. They asked what the people's goals were. There were about 100 people in there, and almost everybody said, my goal is to become a billionaire trader. My goal is to be a millionaire, make a million dollars, blah, blah, blah, blah, blah. They're all talking about winning an outcome they're not thinking about. Well, what do you actually have to do to be able to be consistently profitable? You actually have to be able to control the mind. You have to produce a mind that can perform well in uncertainty and risk and money on the line. That's what you have. Otherwise, you just, you're just making up affirmations. You're just making up visualizations. They're going to fall apart when real risk happens.

So here's the key, friends. This brain, this wonderful brain that you have that is the apex of evolution on Earth, maybe, at least from our perspective, that brain that you brought to trading is simply not built for the task. Not going to happen. Okay? And what I want you to hear is anything you can't control is allowing you the opportunity to learn how to let go of that. It's really hard to let go of winning and not losing. Yet the concepts we have of winning and losing are going to have to be altered if you're going to become a consistently profitable trader. It's hard. It's so hard. You want to be in control Everything, every, every human potential thing you've ever seen, every personal development, every, everything is all about winning. Getting the mind ready to win, to, to win, to beat, okay, to dominate. And yet we're saying, no, you can't dominate. The, you can't, can't do that. You have to complete a completely different mind.

So how do you do about retraining the brain for probability management? How do you do that? This is what I would call the journey of the inner trader, not that outer trader that does all the talking. But the truth is it's about how you get to train the brain to engage uncertainty and risk very, very differently. You become comfortable on that rope.

You become comfortable on that road.

Then you go, well.

What you believe about winning and losing are going to have to change. Your notion of winning and losing just simply don't work with the market. You can't control them. Ultimately, winning to a seasoned trader is just a recognition that you landed on the right side of probability by your perspective, okay, that's all you did. There's no reason to get all worked up at the same time. If you lose and you're, and you're, and you're performing well, that's, that's the given here, okay? If you lose, you just simply landed on the wrong side of probability.

And it doesn't mean that you're bad or it doesn't mean that life is gone. It just means you need to minimize that loss.

You need to trade for another day. Winning just simply means, okay, I've won. That was really cool. If I need to have your about of euphoria about a feeling good, I need to go outside, exercise, get an ice cream cone, do something. But when I come back, when I come back, I put on my game face again and I get out of the, oh man, I won. I'm confident, I'm a good trader. No, no, no, no. What happens is that you are a good performer and occasionally you win, occasionally you lose. And what you're doing is if you lose, you're minimizing the loss. And if you win, you want to see how far that thing will run. That's all you're doing.

So how do you develop an emotionally intelligent mind for trading? How do you do it? Well, it starts with this. It starts with an understanding, a very new understanding about emotions that I've already started talking about. It's understanding that all thinking is emotional state dependent. It's understanding that most of the decisions that you made have already been made before for you before you think.

Thinking just simply Rationalizes. And then once you get past that new conception of what emotions are and about winning and losing, you begin to look at emotional regulation and going, I need to start calming the emotion down. And with mindfulness you begin to say, hmm, I need to start being able to step back out of thought and recognize that my thoughts and I are not the same. It's the same thing with the armed forces where they're beginning to realize that if you zero the mind, you become more focused, you become more alert, your ability to maintain consistent thought in extreme stress is greatly improved. And a lot of people mindfulness for warriors, absolutely. You know, the military is not spending those big bucks because they think it's just really a neat thing to do. Now they're looking at it, they're looking for an edge. The next thing is you need to find the self limiting beliefs that are driving your performances. Not the ones you talk about, not the ones you purport, but the ones that are being revealed in your performances. Those are the ones most hidden and the ones that you're not willing to bring into working awareness. Those are the ones that you're going to have to learn how to face and master. Then you're going to have to develop your inner strengths. And it just so happens that's probably one of the big powerful parts of the coursework that I teach is we teach how to access these God given strengths within you and to bring them up and to build a mind from the empowerment that exists within your mind rather than from the weaknesses that exist within the mind under pressure. Big deal. And then what you have to do is you have to learn to manage the mind that trades. That's where we're at. The place we want to start is with emotional regulation. What we want to do.

If you understand an emotion as a biological action potential that coordinates action between the organism that would be you, the trader, and the environment that would be the markets and they trigger based on fluctuations in the environment. So if something happens in the environment, that's a change of status automatically. An emotion is going to come. As it starts developing, you, the trader need to be able to regulate it so that it doesn't crank up. That's called arousal and become a feeling. The feeling is literally a switch that goes off and the chemistry of that emotion goes through your body. You may feel it in your gut, like your sinking feeling and stuff like that, but that's the emotion there.

And you need to regulate it before it overwhelms your ability to think clearly. Because once it does, you're toast. So that's where emotional regulation is. You need to observe the emotion in your body because emotions are biological in nature. They take over the mind. But when you start feeling tension in your body, when you're holding your breath, when you're breathing excessively fast, you're actually, you're fanning the arousal of an emotion. And it's right there that you can alter that emotion before it just absolutely ambushes your thinking mind. And that's what most traders don't do. They don't observe that emotion when they can do something about it. The emotion has already exploded and it just swept them away before they know what they've done. You just have to educate yourself. Then what we also do is we start going, well, you know something, let's. This mindfulness stuff, we begin to say, you know, all these thoughts, and all of a sudden you identify with them. You know, I say, I should have done this, I should have done that. It's too much. It's not. I can't, I can't, I can't. You know something? I better jump in right now. I need to make my money back. And you're identifying with those thoughts as if they were yours. Then you take a look on the right side. You start looking at the observer mode. You start noticing there is a separation between the awareness that you are and all that thinking going on. And you begin to realize, oh, my goodness, you know something?

My thoughts and I are separate from one another. What a novel idea. My emotions, my beliefs, and I are separate from one another. But my mindfulness, my observer of the self, has been so asleep that it's fused, and I need to wake up this part of myself. So I start redesigning the thoughts that take me into particular directions. So what I want you to understand, the goal of mindfulness is really to separate emotion and thought from awareness. That's a big deal, friends, and that's the beginning of how to master yourself. Then this is the big part of emotional regulation is that in emotional intelligence work. And you begin to perceive the brain as a. Basically as a neighborhood where rival emotional programs are absolutely at war with one another and the winner takes all. And when that brain produces a mind, the mind is like a committee where these forces compete for control of the mind that you bring to manage uncertainty. That's what's going on all the time. Only you haven't been awake to manage the struggle.

And until you recognize it, you know, you're looking at this image right here. You've got a standoff between These two dudes, okay? And you're looking at, you're looking at a committee of the mind that has, has conflict going in it and they don't know how to resolve it. So we get a power struggle. Not a good time. When you're in the midst of trading.

Then as you begin to develop this notion, oh my gosh, boy, this is a complicated play. The mind's a complicated place, fellas. If you don't grasp that and you think that it's just a monolithic mind in there, just think about the last time that you had self doubt. Think about the time that the last time that you had two opinions, you had two minds of something. And all of a sudden you realize, wow, you know something? It's easy for me when triggered by uncertainty to go into fight flight because that's, that's, that's the priming is that suddenly I start worrying, I start having anger, I have dread, I have resentment, I have fear and have self pity. This is the self talk that you were born into and adapted to for survival. And that's the self talk you brought as a brain into your trading. And that has to change. This is the power struggle going on in your mind every time you trade. Every time you trade. This is the power struggle. And within that power struggle.

There is an inner critic and an adapted voice.

Have you ever noticed inner critic? Have you ever noticed that there's a criticizing voice, a judging voice or a tempting voice that lives in you? Have you ever heard that? Oh, you're never gonna make it. You know, you don't. God, you're not smart enough. You're not this that you're not whatever. Or if you ever. Gideon, Gideon, Gideon, just take this trade. You're going to make a million. Have you heard that? That's the inner critic. That's just not, that's just not willy nilly. Thoughts running in the mind. These are powerful forces living in the mind. And it just so happens the inner critic is very destructive. And if you ignore and pretend the inner critic's not there, it's like you leave the back door into the committee of the mind open and the inner critic gets in. And then you have this adapted voice. Little Red Riding Hood in this case, that's the part of you, that's the limbic brain, that's the emotional brain. That's the part that experiences fear or aggression in response, in response to uncertainty and risk. What we want is to move from fight flight to approach motivation. We want, we want curiosity, we want the discipline to maintain Order. We want the courage to turn toward that fear. We want the ability to soothe fear. And then we want to have crystal clear thinking.

To do that, you're going to have to master the inner critic that lives within you. It's not easy. And what happens is most people don't even know it's there. I'm letting you know that it's there. And if you'd like to do something about it, can teach you how to do it. So here's the deal and this is something where I want to talk a little bit about. Implicit beliefs are revealed in performance. You experience them as choking or as peak performance. And in this person's brain here you have this little bitty part that says this is what you actually know, you believe. But notice the great part is you don't even know what you believe. These are the, these are the limbic learnings, the implicit beliefs that drive the way you make decisions under pressure. And you don't even know what you believe. However, if you're paying attention to your trading account, what you can do is you can look at that trading account by its health and you can start seeing, you know something. What's being revealed here, what's being revealed here. And I can tell you right now, it's about inadequacy, it's about mattering, it's about worth and powerlessness. It's no rocket science, nobody just wants to know it. But this is the meaning making machine in your head that's working on a subcortical. Otherwise, on a subconscious level, you need to make those implicit beliefs explicit. You don't want them running around in your head, in the shadows, man. You don't want to know. You want to know they're there and you want to be able to get to it and change them.

The deal though is this.

We all, we often come to this moment where.

We just feel like we're so close. You know, victory is just right around the corner. I'm about to become consistently profitable. But there's missing puzzle pieces. Something is missing. And the truth is that we have undeveloped emotionally primed potential living within all of us. The problem is the limbic beliefs, the limbic learnings have precedence because that's the emotional brain. What we want to do is go in and say you know something. In the same way that you have the judgment, you have the fear or the anger living within you that causes havoc in your trading, you also have the discipline, the emotional program discipline of a ruler. You have the emotional program of courage of a warrior. You have the self soothing of a caregiver and you have the impartiality of a sage. They exist as emotional potentials within you, but they just simply have not been developed very well. And most likely you didn't grow up in an environment that allowed particular ones of these to have naturally come forward. But we're going to have to develop them now if you're going to be a successful trader.

This is the performance edge that you need for consistent profitability. What you're doing is it's going to take personal development. You can develop these four elements. Okay? You can. And what we do instead of. I have found from a long time ago that by themselves, affirmations and visualizations work really well when there's no stress around. But when you subject those beliefs that you're trying to build for yourself to the kind of stress you find in trading and in combat, what happens is they break down. That's because there are things that you want to believe you want to happen. I use a process called memory enrichment. It really comes out of memory consolidation work. And I teach you how to, how to access the discipline, the courage, the self soothing impartiality under conditions of stress from literally memory that we reconstruct.

From experience so that you have access to those emotional programs. Friends, this is the missing piece. This is the piece that you're going to need to develop. Okay. And there's no getting around it. You're just not going to magically click your fingers. No. You're going to have to personally develop these elements of the self. And it just so happens that I have found that memory enrichment is one of the fastest, most thorough ways of getting at that rather than the years and years and years people invest.

In visualizations and affirmations and not have very much to show for it. This is the missing piece, what you're looking to do. Again, they break down under stress. And you're looking at. This is the Yorkies graph. It's been around since the late 1800s, so it's not like we haven't seen this. And on this graph, what you're plotting is performance versus arousal. And arousal is just simply your exposure to stress. And what you're noticing is at first your ability to perform actually does increase.

Arousal and stress kicks in. You need a little bit of arousal. You can't be too darn relaxed. You know, when you're too relaxed, when trading trades are going to get value, you're not, you're going to miss entries not because you're scared, but because you're too darn relaxed. You need to be alert, you need to be focused, you need to be ready. And then under stressful conditions, under arousal conditions, there is an optimum performance level. Okay? And that's, we're looking for that, we're looking to build that for you to be able to literally automatically find. Not automatically, but you learn a process that gets you into that zone, into that flow and allows you stay in that optimum level. Because what happens with most people, they get really, get too aroused and their performance starts plummeting. That's when you start saying, I gave it all back. You know, I just, you know, I just can't seem to get into trades. I keep, you know, I keep, I just, I refuse to let the trade go to target, all that. But this is what you're looking at and this is something that you can actually work with and get done something about. And from this new mindset, here's the deal, friends, you focus on your performance, not on the outcome. And I have a little story about this, is that I am a big, big fan of track and field. And a couple years ago there was an American hurdler in the Olympics that was supposed to be just good as cream cheese. And the announcers were talking about him and how he was going to be just going to be the best thing in the world. He was probably with the goal, blah, blah, blah, blah. And in the meanwhile, he's lining up with six other high end athletes from across the world and he's going through his, getting himself ready for this race, this hurdle race, and then they're off. And the announcers are just talking about he's just the best in the world. It's just all this stuff. And indeed what happens is he does pull away, he does win the race, he does win goal and he does set a world record. And so what happens, the announcers all come to him and he's sitting there after this race and he's heaving and huffing, trying to get his breath back. And they stuck microphones in his face and says, what was it like? What was it like? What was it like when you knew you were going to win? And he's looking at him like what? Says, what were you thinking when you saw that you were going to win? And he looked at him finally and said, you want to know what I was thinking while I was racing? Notice he said racing, not winning. They said, yes, yes, the world wants to know. Sticking the microphones even deeper into his face, he says, well, I'll tell you. 1, 2, 3, 4. 1, 2, 3, four. 1, 2, 3, Four. No, no, no. What were you thinking? He says, no, that's what I was thinking. It just so happens that 1, 2, 3, 4. 1, 2, 3, 4. 1, 2, 3, 4 is a systematic numbers that allowed his coaching to train him for his muscle groups and his brain and his muscles to work in coordination with one another. He was focused entirely on performance, not on outcome. Now, after he got out of that performance, he ended up talking about that they had outcome goals set eight years ago about what they wanted to accomplish. But the thing is, what they knew they had to perform well, they couldn't control if somebody's having a great day, they control if it's raining, they control all these factors. But what they could control was the mind that that athlete brought to the moment. And friends, that's the deal. That's what you're not doing. If you take a look at this chart, we're looking at this flow state, okay? And around that, you realize, well, there's that control, there's relaxation, there's boredom, there's apathy, there's worry, there's anxiety, there's arousal. And what you're seeing is you're looking at it in a particular area, your job, and this would be called in the zone, your job, and I would actually call it trader state of mind. But what you're looking at is there's all these different kind of emotional areas. But what we want to do is we want to get into that zone of flow. We're focused on performance because that's all you control. However, if you control your performance and your methodology truly has an edge to it, what you do is you set conditions up for that edge to work optimally.

And this is why winning only means that you landed on the right side of probability, and losing only means you landed on the wrong side of probability. The point is, you did your job, you performed.

And then you become a good loser. What you discover very clearly is you need to know when to fold your hand to minimize losses. It happens a lot. And you discover the alphas want to win. They want to win. And you know, my God, it goes in against me. Well, I'm gonna. I'm gonna double down on that. It may work in business. It does not work in trading. What you do is you realize that the only thing that I'm really doing is I'm working with a random process, and I'm finding a pattern within it that may or may not show up. When I get into that pattern, that setup, it may work it may not. Who knows? But the thing is, I need to be prepared for both eventualities. I need to be prepared to lose. I need to be prepared to exit the trade as a winner too. That's what the winning mind looks like in trading and or you can fall back to fight flight. This is a very famous experiment and Dolores wants you to know that she realizes that marshmallow is misspelled. But there is this very famous experiment about impulse, the ability to act on something right then or save it for a rainy day. These kids said, well, okay, you have this one marshmallow right here. And what happens is if you don't eat this marshmallow, when I come back in 10 minutes, going to give you 10 more marshmallows. And you're looking at kids right now dealing with the impulse to eat that marshmallow right now. The emotional brain so much wants to impulsively grab that thing and put in the mouth and feel the sugar rush. And what you discovered is more than 85% of the kids tested.

They chose the one over the 10. When they saw kids get 10, they said it was unfair. Well, I want to tell you something. That brain is still alive. It's working with your trading all the time. And your job is literally to pass the marshmallow test. When you trade, your trading performances and your trading in town are going to give you a complete accurate picture of literally whether or not you have a probability based mind waiting for that 10 to show up, or whether or not you have that survival instinct mind that is going to take that one marshmallow. Okay? And it's not like the one marshmallow is bad. But if you're a trader, it's Nothing like the 10 it's your choice thing.

Now, initially I'm aware.

That it was all about making money and finding a way to live in the world. And the problem is, when you get into trading, what you discover is this. If you fear something, it owns you. And literally, like this graphic says, the fears that we don't face becomes our limits. So true in trading. So true in trading. Every time when you're looking at a person plowing through capital or sitting there with just a trading account that's not going anywhere, what you're looking at is that that trader is not facing the fears and they have found the limit that they can get to without transforming that fear, without taking it and saying something.

I have to master that fear. That fear can become my teacher. But the truth is, I have to be willing to face it. I have to fess up to it rather than keep lying to myself. Okay? That's where that goes.

What I, what I give you is this, is that I use this as an analogy for what a trader has to become. The kind of hunter a trader has to become. Like.

The African lion hunts by stalking and then chasing. And they take on a lot of severe injuries, okay? They get kicked in the face, they get gored. And therefore they have to have a constant. Their, their prides have to grow because if they don't grow, their pride's going to die.

Okay? Now they, they are, they're stalking, they're going after that. The thing is, is that now what I want you to do is take a look at the American cougar. The North American, they, they're in Mexico and they're in Canada too.

In this particular case, they're both. Understand, the African lion and the American cougar are both apex predators. Yet if you were to take a look at a cougar hunting, what you'd see them doing hanging out in a tree, on a branch, just kind of sleeping, or they'd be on a rock ledge and they'd be waiting. But what they've done, they are ambush predators. They know where the white deer comes, they know the setup. They have a sense of predictability and they're waiting to see what the fuck forest will give them. Sounds like a traitor, doesn't it? When that deer shows up in the setup, the cat springs. The difference is this is when he comes down, if he doesn't outright kill the deer and the deer gets up, the cougar does not chase.

What he does is he just counts that a loss. It's minimal. He's not gored, he's not fighting with antlers and hooves. Deer will fight with their front hooves and they're like, they're literally like knives. They'll hurt you. And a male deer's rack will seriously do some damage. And what it's learned though is it can take the loss hunt for another day, get up in the tree, wait for the next deer to show up and he earns a good living. What I want you to realize that both these animals are adapted to their environment. The African lion, with its stalking and making things happen attitude has been very successful on the plains. They're great hunters. Yet if you took that lion and put him into the cougars territory, it'd starve. And I might add, if you took the cougar and put him in Africa, he probably wouldn't live. Okay? The key though is the Adaptation.

Is they both are adapted to their environments. It's just that if you're, if you're a lion and trying to be a trader, you're going to blow yourself up, you're going to get hurt a lot, you're going to have major losses and you're not going to be able to sustain the capital. However.

If you're an American cougar, you're going to be minimized those losses. You're not going to exert so much energy and if you do lose something, you have a minor loss. But when you make a kill, it happens bap, just like that and everything's good.

That's the ambush. And traders are much prepared, much better prepared to be the ambush. Okay, and this is the key. It's not like both are apex predators. But do you want to be, do you want to be a successful apex predator or do you want to be an extinguished one no longer in the gene pool? Up to you. We can help you if you want the success. As a matter of fact, how do you become the change? And what I've said here is this, is that for all of you guys out there understand this. There will be only two or three of you that make it as a trader if you do not train and personally develop the brain that you bring to trading. Okay?

And we can start showing you. And if you don't know much about me, what I want you to do is go my website and start getting at the free stuff. Okay? That's down there at the very bottom. That's the WWW My Trader State of mind. We have enormous amounts of videos. There are over 200 of them. We have enormous amounts of articles that literally talk about this stuff all the way through. We have a free ebook that goes in and it's really a compilation of articles and things like that. But it talks about these various things we're talking here and gives you an overview. And then there's some. There's my book there, Mindful Trading book. There's lots of other things. The thing is what we want to do is we want to start educating you about what it's really going to take now that you're here in trading. What's it really going to take to transform the brain and the mind that you brought to trading to the brain and mind of a probability mind that can produce success in trading ultimately.

And by the way that ebooks free, just go and please get it and it works from there. But if you're looking at serious, at the serious stuff and you go, you Know something, I know that you can read a lot about this stuff, but, you know, reading about this kind of change is like reading a trading textbook and then getting in front of stuff, risking real capital, and discover that the textbook is nothing like the real experience. It's the same thing here. Most people discover the group course and the individual course. The group course is.

Financially very approachable. And what it does is it has five group meetings over a period of 10 weeks.

And. And it goes through the process of developing the skills that you need to produce a consistently profitable mine. Okay? That's what it does. And it's something where it can also be broken down into payments over that time. And it's, like I said, it's a very accessible class. And it's a virtual classroom that basically is accessible to you for an indeterminate amount of time. And we really encourage it. And our Next class begins September 12th. And what I encourage you to do, if you're thinking about this, is that people who register late, they get overwhelmed by the course because it's fast. It's assuming that you're ready to work and that you have already been studying. A lot of people will start the course early so that they're not overwhelmed when they get there. Encourage that. And we will actually give you a free $200 gift for doing that. It's really. Because I want you to. People just really don't comprehend. Just this course moves like crazy. And then other people say, you know something? What I want is individual mentorship. And that's our individual course. It's highly comprehensive. It is very personal. It comes with 10 consults with me over a period of three or four months. It gets into the deepest part of your stuff that actually stops you. What I would call the dark. The dark side of the self, the orphan side itself. It gets deep down there and it. And we work together over a period of time to build that mind. It's very powerful. It's a little more expensive. It's $3,500 or payments of 1200 over a period of two months. Okay, so. Or three months. The thing is, is they're powerful. And what I want to do is they understand that you may be one of these lucky guys who doesn't have to a darn thing, and you just become a successful trader. That happens in about 2% of the time. 2%, okay. Most people fail in this because they don't realize what they're walking into. And they don't prepare themselves. They don't prepare the mind for what they what they're going to be doing, it's kind of like they become an African lion and they think they're going to hunt in the American forest. No, the cougar wins that one. And I ask you to go, this is how do I train myself? Because an ambush predator come see us. If there are questions, I will be very happy to answer them in the next couple minutes. So type in stuff and we can rock. And I would, I always find it interesting with my glasses. So I'm not sure if we have any questions. It may be that I have just answered everything so well that we did the whole thing. So I don't see him any rate what I do is I want to thank everybody for coming and I also want to thank particularly our Navy SEAL guys. I so appreciate your service. I appreciate.

On July 4th it's just like a day of appreciation. But the truth is deeply appreciate what you do. And yes it is being recorded and it will be accessible on my website tomorrow morning.

And Dolores will be sending you an email and also.

Thank you everybody for coming. It's been, it's been my pleasure and my hope for you is that you have good trading and I hope you really start taking a look at your trading and recognizing you have a brain to train. Okay, so it is now 5:30 at well Eastern daylight savings time and I thank you for your time and if I can help you, let's talk. And by the way, if you're looking at this and are serious, ask for a free consult and just hit contact us when you get to our website. And Doris will find a time match up time zones because we work all over the world, different time zones and we'll find that time and place where you and I can talk individually about your trading. So I wish you well friends and good evening.