Why Does Everything Change When the Money Is Real?
Kardec Trader explains why traders freeze up with real money: your brain treats losses as threats to survival, power, and status. He argues you can only control your mindset and process, not outcomes, and recommends taking small losses deliberately and reviewing your P&L to spot what triggers you.
Chapters
Why does everything change when the money becomes real up into that moment? Rarely do traders look at psychology as a problem. And then even when they go real and the money's live and it can be really lost, they still deny that they're having psychological issues with money. And that's where we really want to begin. We want to be able to say, what is it about money that changes everything? The deal is that up into that moment, we have never really had to look inward. We've never had to look in here. What we've done is we've said, I can learn a system and I can get really good at it, and it's going to give me an edge. And that edge is going to produce a lot of money. But then we want to make money. We have a hunger for money. As a matter of fact, not only do we have a hunger for money, but we also fear money, Particularly the fear, the loss of money. And this is why it gets so weird when the money is real. Suddenly, that money can be lost. It's not a video game anymore. Instead, to the ancient emotional brain, the caveman brain, it's life and death. Because here's why. Your emotional brain, the caveman brain, doesn't know about money. It doesn't see legal turn tender. What it experiences as money is power. Power in the way of controlling outcome, power in the way of being safe. And power is having prestige. And suddenly.
Suddenly, when you go from paper to real, all those are in play. Because you can't control outcome anymore. No matter how powerful you believe and talk yourself into and how much of an ally you produce about yourself, the reality as exposed in your trading account is you do not control outcome. Not only that.
Your power to make things happen. You can be right or wrong. It doesn't matter to the trading gods, but to you who hunger for money and what it represents to you, it's devastating to lose.
Okay? To the caveman brain, that loss is suddenly the threat of biological existence. Remember, it doesn't see money. It sees money as power, prestige, controlling outcome, safety. And all of a sudden, all that stuff's in play. It's uncertain. And your brain is built not to deal with uncertainty at all. It is built to control the outcome. So now you really begin to see what the problem is. And the only time humans would just absolutely fabricate all sorts of crazy misperceptions, beliefs they hold. Okay, I can do this. I'm a powerful guy. You know, I can Monday morning quarterback anything, but not in real time, when threat of loss is really there. And again, that caveman brain doesn't see loss of capital, it sees loss of life. And that's why when it goes against you and that trade goes against you and you just get really frozen up and you don't want to take that loss. No kidding. You have 6.5 million years worth of program that says, don't take that loss because you'll be somebody else's meal. So you fight like crazy not to take that loss, but there you are. So we have this brain and we have these beliefs about money. We have. We hunger for money because it's going to give us status. It's going to give us the dreams that we didn't have. If we just had money, everything would be better.
Well, then you go and say, well, I'm going to make some money today. You don't have any control over that. You've already set yourself up for a big fall. Because ultimately, when it really comes down to it, what do you really control? When you're trading and you're placing capital at risk, you control your performance. You control the mind, you bring to the performance. That's why when you're taking a look at a chart and you see what it's saying.
That chart doesn't have any intrinsic value in it. The value is here. You're looking at it, and depending on what state of mind you're in.
Urgency to get in, or, oh, fear I might lose, it's going to color what you see in reality out there. So the reality is not out there. The reality's in here. Your brain literally is creating a virtual representation.
Of reality out there based on its beliefs, okay, Assumptions about the world and its biases that you don't even know you have, okay. About your ability to manage uncertainty. That's what you're looking at in the health of your trading account. And what happens is that trading account is going to bust your beliefs if they're not effective. So my promise to you, if you happen to be a regular human being, you are going to have problems psychologically. In trading, you have a brain built to control outcome and not lose and to predict when the animals are going to show up for the hunt. That prediction that you try to do and saying this is, oh, it's the dip here. I'm going to take it right here. And what you're looking at is, wow, you're taking that brain conditioned to do that, and you're asking it to do something alien. Of course you're going to have psychological problems. The key, though, are you ready to Train the brain to be able to deal with uncertainty and risk very differently. Remember.
Your emotional brain is never going to know what money is. It will know what power is. And you need to change the whole conversation you have about winning and losing.
You can't control winning or losing, so what can you control? The mind you bring that. The people who want money.
All those alphas who want to make money, so they have power.
That's what it is. They're trying to prove they matter by money. Not inherently in here, but out there. You're giving control of the self away, my friends.
There it is. And you're going, I have to change the conversation I have about money, the way I perceive money. You know, if I make money, it doesn't mean I matter anymore or any less. It just means I make more money. And if you've glued that money to your well being in the world, then you have chosen really poorly about how to go about creating the mine for trading. So friends, what I'm asking you to do, I want you to take a look at your P and L statement and look at it and I want you to start listening to what is triggered inside the mind. Whose fault is it? What's going on with the brain and the mind that you brought to trading that's stopping you from taking yourself to the next level? It happens to all traders, okay? Some get through it. Some become humble and recognize that I'm never going to be powerful enough to control things. What I can do is I can see what the markets will give me. And what I know is that I'm going to have to become a really good loser, okay? Instead of this big, big honcho of a winner. No, you're going to become a really good loser. You're going to take the small losses so that you don't blow up an account, you don't die. The cuts of a thousand honey cuts. Okay? That's what you're going to do. How do you do that? My invitation. Start with your understanding of winning and losing and then come to our website. Start really looking and reading and go to YouTube also. And start really looking and finding. What is it about my psychology, no matter how good it is in other areas, that's stopping me from becoming the trader that I know I can be. If I could get this money conversation shifted in my head so that my understanding of money is not tied to my being the worth of myself, it's just tied to my competence as a trader and also to probability.
Huge shift. Friends, come and learn, come and learn.
