Warning: Winning Can Be Dangerous to Your Trading Success

Foreign.

You finally start winning. It feels good, you know, and all you know, you know about losing, you've done that too. But all of a sudden, you start getting on streak. You start saying, you know, one, two or three trades more, maybe a week. And what you're doing, you're saying, you know, hey, I got this. I finally figured it out. And then while you're celebrating going, I've got it, I've got it. This feels so good. Finally, after all this time, after all this money, I finally got to the place where I know how to trade. And I'm doing it. I'm doing it right here. It feels good. And the next thing you know, you take a loss. But no, you want your money back. And you start going. And you start going, no, no, no, no, no. What's happened here is something, what you call it ever trading, you start feeling good. What I want you to understand is feeling good is a very deeply biological based problem that you have. And it comes from your caveman days. There's a chemical, a neurotransmitter called dopamine. When you start winning, when you win and feel good, what you're feeling is the reward chemistry. Dopamine, it makes you feel good. It's kind of like dopamine. It's kind of like cocaine, okay, Is that you snort it and you start feeling really good. But that's not a state of mind that you need to be in to trade effectively. So what's occurred when you take a win and you finally got to that moment of, where, when do I start winning? And you start winning and win again and win again, you're saying, oh, I got it. You are triggering. You're beginning to get euphoric. You're starting to feel good. And friends, the one thing you're not allowed to do in trading is to feel good. When you're trading. Euphoria, that's the actual term for that. Euphoria is a chemical that produces a mind that says, hey, the good times are rolling. It's going to go on forever.

Forever, to the caveman, was just this moment. The thing is, for you as a human being, Homo sapiens, you're looking at it going, oh, man, I've got it. I can see endless. I'm walking into the sunset singing Kumbaya. I'm great. The deal, though, is that you're not managing your emotions for the moment. Most people thought that getting past fear was the big job. If you did that, the roads are going to open up and there's going to be Clear sailing. No, the next big monster, the next demon on the road, is winning. Because ultimately that winning again is connected to that dopamine. It feels so good. But dopamine is how a pattern gets established. That's the way the brain uses it. You start winning, it starts going into that pattern of feeling good. And it says, oh, this is working. This is working short term. And it wires it into pattern. So then anytime you win, it triggers the euphoria that makes you think that the skies are going to stay blue forever. And then you get into trading and find out that your illusion of control.

Just got busted. The difference in trading is that the illusion of control is busted all the time. You're looking at your trading account and it's telling you how effective the beliefs you have that trigger all these emotions about your ability to manage uncertainty with risk involved, how effective they are for pulling capital out of the markets more than you're putting back in. So when you're in regular human mode, you can sit there and take losses. You can do that. You can pretend, you can make up stories that are totally detached from reality, kind of like our political situation in the United States. However, the trading gods don't care.

Euphoria produces that great sense, oh, wow, I'm doing something right. And you have the reward stuff. Well, that's right in the ordinary world. That's not right in the trading world. In the trading world, the only two emotions you need to be acting from are, while trading are discipline. Okay.

Patience and impartiality. They're three. Okay. And you're looking at it going, oh, these are the emotions that I need to be in. Yeah. If you're in a situation of where you start feeling good, you know that that's a dead ringer. Is that if you were celebrating a victory someplace else, you'd say, oh, great. Well, the deal is, if you want to celebrate the victory, stop trading. Go and do something that helps you celebrate. But when you come back, you come back to that disciplined, impartial, patient mind that is required to be able to manage probability. Caveman's brain was not built to do that. It was built to survive that moment. It got euphoric when it got past the saber toothed tiger and lived another day.

He didn't realize or wasn't built to realize that there's a lot of sabertooths out there and you need to be. You need to be diligent. You need to be there and have a sense of, like, presence. You can't start feeling good if you expect to live. And that's what happens is that when you over trade and then fall into revenge trading. Because most people, when they get euphoric, they end up over trading. They blow up. But then they don't want it, they don't want to admit it. They want it back. And then they're triggered to survival instincts. Now they're being gobbled up by the saber toothed tiger and they want to sit there and get it back. They're gonna fight to the very death.

To the caveman. That's really happening to you. You're just losing a bunch of capital, but your caveman brain cannot tell the difference between capital, money and power.

Caveman has no idea what money is. It sees money as a symbolic representation of your power to be safe, your power to have prestige. I've made all this money. Look at me. And to be respected, loved, admired, okay? And also you're there, so why not? Can't you see that you're being led down a path? Your job is to recognize that the old brain, the old mind, does not work in the world of trading. You're going to have to learn that you can't lie to yourself. You can't deceive yourself. You can't fall into the illusion of control.

You do not control outcome. That's an illusion that trading will tell you all about in your trading account. What you do control, though, is the mind you bring to the moment of performance.

That you can control. You can train the brain to produce a mind that again is locked in to this very powerful combination of discipline, impartiality, and patience when it greets challenges on the road. And you will do that all the time because you're never in control of outcome. You have probability of being right. But you can be like, oh, gosh, this is a sure thing and it not be that way. That's trading in regular life. That's happening a lot anyway. Think about baseball players. You know, there, if you make. If you hit 303 out of 10, getting base hits, you're in the hall of Fame. They're used to the illusion of control, yet you think the guy's going to get up in a home run every time, but no, most of the time he's getting out 7 out of 10 times. So you're looking at it and going, oh. What I now know is that I have fallen into the illusion of control because of euphoria from winning. I know that if I win, I have to train myself to be able to go back from euphoria. That's going to blow up my trading because it does no longer has it's going to good times, going to go on forever. But no, you're going back to a mind that can manage probability, manage risk and recognize easy does it, one step at a time, one step at a time. This is high probability. I've been able to manage my losses and I don't need when I win to fall into euphoria. I need to stay.

Stay into discipline, impartiality and patience. That'll do you friends come learning how to do this. It can be trained. Take a look at some more of these videos, go to my website and start exploring about how you can do this. And you can recognize this is really about your evolution as a trader. When you take a failure instead of hiding from it, I'm asking you to learn from it. The brain only learns from failure. It doesn't learn from success. Success sets the pattern. Okay? Failure causes you to say.

What am I doing wrong? How can I improve this? So I'm asking you to look at failure as a very positive event that can allow you to become the trader that you can be. And that failure when you hit euphoria and blow up and then some and take all that stuff out, what I'm asking you to do is learn from it and to recognize that failure led you to a place where you can train yourself out of the old pattern and bring in a new pattern of when you win.

All you've really done is landed on the right side of probability relative to you. That's all nothing to get excited about. It was never about you. You're winning and you're mattering and your worth and your competence. No, separate.

Separate your performances about your competencies and your being. That's your inherent worth. That's the part says come win or lose, I'm okay. By the way, that's a quote from a friend of mine who has made two to $300 million the last several years. And what he said is, look, what happened is that I lost a lot of money relative to at that time and I thought my wife was going to leave me and I went to her and I told her and we held each other and cried. And out of that Randy, I came to the moment where I realized, come win or lose, I'm still loved, I'm lovable, I belong. And out of that, that allowed him to get past having to win to prove himself okay? And the euphoria that comes from oh, look at me, I proved it, I won. No, your job. Guess what?

Discipline, impartiality, patience. Trade your plan from that position, and you will find winning.

Is just simply a game you play. And you're extracting more capital out of markets than you're putting back in. That's all. Come. Learn more, friends. Come to the website. Watch more of the videos.

Come to a webinar. Be well, take care.