Winning is Dangerous to the Success of Your Trading
Randy Howell explains why winning trades trigger overconfidence and reckless risk-taking that destroys accounts. He maps how emotions bypass rational thinking through the brain's emergency response, then outlines three stages to break the cycle: breathing to regulate arousal, mindfulness to observe automatic beliefs, and reshaping the inner critic into a constructive voice.
Chapters
Welcome everyone, my name is Randy Howell with Trader State of Mind, and I am delighted that you have come tonight. And first, let's just do this, let's find out if you can hear me. If some kind people would just simply type a Y in the question box, I would greatly appreciate it. Yes, thank you, thank you, thank you. Okay, for those of people who know me and have an idea of the way I like to run my show, is I take questions at the end of the slideshow, okay? But what I ask of you is this, is as you go through and have questions, why don't you type them in so that we have a supply of questions when we finally end? That would be really beneficial for us. So let's start at this thing and say, what is Randy saying here? Winning is dangerous to the success of my trading? What are you talking about? Well, I want to give you the simple answer. When people first come to me, almost every one of them says, Randy, if you can teach me how to deal with this fear that I'm having, I will be happy. Nothing, nothing could bother me after that. And what happens is they do their work, they do the regulation work, they do the observation work, they find out what their inner community looks like, they learn how to build a mind that they can bring into probability. And they start winning. And they say, you know, I've really got it, I've mastered, I have mastered this fear stuff, I've got it, Randy. And it's that particular time, they've done hard work, they've done good work. And then what happens is they meet the second monster on the journey into trading success, winning. You start winning and something happens, you start getting dopamine rewards. And you start thinking that dopamine, you get that, it really flushes through you. And all of a sudden you start thinking that I've got it, I know what I'm doing, and you become overconfident. And before you know it, what you've done is you've taken all the money that you've earned, blown it up, and you have given back some more. So what you discover is that success, winning, can in fact be dangerous to your success in trading. We wanna take a look at that at a deeper level today. But we get it, it's that if you have, if you've ever gotten to the moment of where you started winning, and blew it, you knew, you know that winning can be dangerous to your success in trading. We want to say, well, what can be done about that? What are the kinds of things that we need to do to look at that allows us to build a different psychology than the one you brought about success? We want to bring a success mentality mindset that works with probability, that works with uncertainty. That works in the flux of not knowing rather than one that is built on certainty. I'm going to work hard, I'm going to be powerful, I'm going to bust through all the, all the stuff. That's going to get you in trouble in trading. So let's start in the beginning, okay? Is that initially, have you experienced that almost there? And again, what I want you to do is to go through this and think about the example I had about the person who first comes to me looking to, to be learned some way to around all this fear that they experience in entry and taking profits and all that stuff. Oh God, and the fear of losing. Oh man, all that stuff is there. And all of a sudden, hmm, you start to win and you're almost there. All you have to do is put it together. I have actually had people who were actually trading coaches who finally hit being able to have winning months, several months in a row, and stopped trading because they were scared that they were going to give it all back. That's how powerful this stuff is. So now you can hold it together for almost all the time, and then things just simply fall apart and you don't see why. You know, the thing is, is it really is a lot about what an emotion is. From my standpoint, an emotion is not psychological. It's actually biological. It's actually a— it is actually a biological action potential that coordinates action between the organism, that would be you the trader, and that wild crazy environment called your charts, the markets. And anytime there is a change in status in the markets— trade goes up, trade goes down, it's chop chop chop chop, and it falls, it ups— those trigger emotions anew. They may be micro expressions of emotions. And what happens, you finally figure out how to get it, and then you get in, you blow it apart, you do all the stuff that happens to everybody, and all of a sudden you give up. You walk away and you are so close, so close. And ultimately, what we're really going to talk about today is what you really need to do about building a new psychology of the self that allows you to work under the conditions of uncertainty and capital at risk. We've gotten that. So the first thing— It's just talking to a bunch of other traders about trading psychology probably is not going to help you. You hear all these buzzwords and you start talking about this stuff as if head knowledge could just solve the problem. Oh yeah, all you have to do is this. Oh yeah, you're just going to be a disciplined trader. And the real question is, how, how do you become a disciplined trader? By talking to other people about it and what they found and stuff like that and getting their opinions? I doubt it. When you start looking at it and going, what, how are, if you define it in such a way, I define discipline as the ability to maintain order under pressure. You don't fall apart. So if you've seen that, you realize a lot of traders want to be disciplined traders, they talk the talk of it, but they're not walking the walk. They're not training themselves. They're distracted, they're into their reading about this and about that, and they quote me better It's very common for people to quote me. They've watched all 308 videos that I have on YouTube, and then they think they know me and they can actually correct me. And the real question is, can you do it not as knowledge, but can you do it emotionally when there's skin in the game? That's really it. So the thing is, is that you really have to you have to understand one really big thing is our brain is prone to gamble. And this is what we want to example, to really take a look at here. So in this diagram right here, the truth is, is that when you have beliefs about something they become so rigid that you can show all the facts in the world to the belief about it's inaccurate or not effective, and the truth is the more you give the facts, the deeper the belief becomes that it's true. Okay, and this is a real problem. You have to be really careful about literally what beliefs you allow to show up. And my favorite thing is to recognize this: is that your trading account, the health of your trading account, is an inventory of the beliefs that you are projecting onto the markets about your ability to manage uncertainty successfully. Okay, that's what it is. And what you'll discover if you start looking at that trading account, you discover is that you're not consistent. There'll be good times and bad times. They fall up, they go up and down. And what you're really looking at is what are the beliefs driving that behavior? Okay, that's what we're looking for. Ultimately, the gambling instinct comes from our evolutionary psychology. It's that we had to gamble a lot, okay? And if, if we didn't do that, we were going to end up as, as bait for somebody else. And so we've come from this thing where we have a confirmation bias where we think we're right right, when in fact what we have is we're filtering, we're filtering what we think through our beliefs, and we believe that we have to be right. And in trading, the truth is, is a lot of the time, no matter how much work you do, you're not going to be right. You're going to be wrong, and it's going to lead to a loss. But the deal is, can you develop beliefs about yourself that are independent from your performance in trading. That's at the very bottom of your ability. Most of us, we do not separate our performances— that's winning and losing— from your being, from who you are as a human being. And that's what we need to develop beliefs around. So a very successful survival adaptation that gave humans the will to survive against incredible odds. So your caveman answers did you a favor, but at the same time What you inherited from our distant past is an irrational belief that you could win against and just do, just work that. And ultimately, those are limbic learnings to the point where it comes to look like this is that I call it in my work, the fraud, the one who wants to look good. But the truth is he looks good outwardly, but he doesn't have the skills inside. In this illustration, what you're looking at is you're looking at the little, the little nerd looking into the, into the mirror and seeing a Hulk. A lot of guys actually, and guys mostly, women too though, is they actually hold a belief about themselves that they do not want to challenge, and that belief does not produce the results that you're looking for in your trading account, but you want to stay in the belief even though it's a lie that you keep telling yourself. OK, this is the thing that is so hard about trading, is your trading account is your truth meter. You can lie to yourself all you want, but you can't lie to the trading account. The trading account absolutely does not care. So you're sitting there and going, whoa, you mean I've got this thing of where I have to be really careful about what mind is there when I actually start looking into the mirror and looking at myself. That's correct, friends. That is correct. You're going to have to do that because we are— we want to look at these unexamined beliefs, and these are on a limbic level. These are not on a thinking level. Your thinking mind wouldn't even see these beliefs in operation. You would just notice the, the recurring patterns. Okay, so what we really want to do is say, what are the unexamined limbic beliefs that make you prone to gambling. The gambling, by the way, if you've ever revenge trade, you've gambled. If you have ever jumped into trades and got in and wanted to win and had an urgency to get in and do it, you've gambled. Anytime that you go outside of your rules and disobey them, you have moved from the management of uncertainty to gambling, where you no longer have the edge. That's how big it is. And where you go is this. It's the very number one thing is that there's a pot of gold at the end of the rainbow. I believed that fervently when I was a kid. I actually believed there were leprechauns and you could do that stuff. And I grew up and I still believed that it was just out of reach. It was just out of reach. And I believed that it was going to happen like magic. And what it didn't do is didn't go magic. So the next one that we really want to look at is striking it rich in trading is a myth. You talk to traders who have been around long, they just didn't start making all these piles of money all at one time. What happened is a lot of them had to go through some serious, serious, serious work in order to come to that. They didn't— if you want to get— if you want to make a If you want to make a good bit of money in trading, start with a fortune and you will go down and get a little bit of money. Okay, so the deal is we've gotten this thing and we know that it's really against— it's not really, it's not really the beliefs that you need to have to be able to work the magic of trading. So we've gotten that. We know that there's a myth. We know that there's a myth that people really fall into. Then the gambler, they truly believe that they're going to win against all odds. That's part of the American myth, that you're going to win against all odds. That's the Rocky franchise. That's even really, when it comes down to it, that's the Star Wars franchise. You know, ultimately they come in and they win against all odds against the a big, huge empire, okay? But the deal is this is where you get absolutely taken in because the gambler believes that he's going to win against all odds. He has that hope there. He's gonna want that. I can't tell you how many people come to me and say, Randy, I've lost a fortune. I've lost everything, but I just can't quit. I know I can win against this thing. I don't have any money anymore. Hey, can you give me a few things and I'll actually share with you my profits? Okay, so you're looking at that and going, oh, do I believe that I'm going to win against all odds with no rational thing and with no specialized training? If you are not building— look, you have to have, you have to have a trading plan that delivers an edge, a theoretical edge. You have to have that. The thing though is what you really also have to have is you have to build a mind that is abnormal. You have to build a mind that can take, can take that and say, you know something, I can execute psychologically. I can get myself where I am producing the edge psychology, psychologically, that allows me to drive my edge. I know that I'm not going to win all the time, but what I know is following my edge, that I am going to extract more capital out of the markets than I give back in. That's winning. Okay, so we've got this thing. I'm going, okay, I get it. Is that— am I, am I, do I have that trait? And the number 2 one is, um, that you can predict outcome. Randy, I taste them, I do it on paper all the time, and then I nail it, I nail it all the time, but then I go live and it doesn't happen that way. So what you're looking at is a disconnect somewhere about the observer that shows up to actually trade the edge. And that's what we're here for. If you have a guy like this who's thinking, you know, I'm going to predict the income, I'm going to be right, I'm going to make this money and everything, everything is going to be sweet. I'm going to be on easy street. I'm going to have the money. I'm going to have the respect. I'm going to have the beautiful, beautiful spouse. I'm going to have all that stuff. I'm going to have everything. I'm going to have the I'm going to have the mansion on the hill. I'm going to have the nice cars. I'm going to be somebody. And all I have to do is predict the outcome and I'll make it so right. And obviously you find out something is the trading gods really don't care. Practically every perfectionist that I've ever met in trading starts out thinking that they're going to reduce their error and they're going to make this thing and they're going to lose less because they've got it. They've absolutely got it. So that's the number 2 one. Number 3, actually believing. That's right. Thank you, thank you. Again, what I want you to understand, the casino, if you've ever been into a casino and people are gambling, What you don't realize is that in the offices upstairs above that, they're watching you. They're looking for signs of finally giving up, getting out, doing this, that, and the other. They wanted you to give up. If they see you giving up, they're going to say, "Hey, why don't you take a break, have a drink on us, come back in about 30 minutes. You can do this. You're good." And after they have had a drink, which is not a good idea, and they come back, they're rested, they end up gambling more, they lose more, and it goes on. Is it's a game to the casino to be able to pull that money out of them. Okay, what they know, the casino does not want you to give up. They want— if you do that, you would stop and walk away. They want you to have hope. They'll like let you start winning a little bit. And a little side note is that when you look at slot machines, it's one of the first things that you run into when you walk. It actually occupies 20 29% of their space. Okay? And the slot machine, those guys are not trying to win. What they're doing, that yeah, if they hit the winning, it'll all, everything will be fine, it'll overflow. But the thing is, winning and having all that sound and the money pour out gets in the way of being in the flow moment that they want. Dolores and I have actually been in a place where we saw a woman, she had 4 4 of the slot machines. And what she was doing is with dollar rolls, she was going in, putting them in, and she kept them going. And we watched them for 30, 40 minutes. And I thought, now she's got to stop. She's— God knows how much money she's putting into this thing. And the thing is, she's in a zone that takes her away from the suffering that she's in. Okay? That's what it's all about. And a lot of Traders do the same thing. If I go in, I can get all cranked up, I can get into the zone because, you know, I've got this stuff moving. I've got to be doing something to be doing something, not recognizing that in trading, often not doing something is in fact doing something. So they also want to believe that you will find the trick or the knowledge and that will cause you to win. You believe you just have to keep trying harder and harder, harder, not giving up. And you're gonna find it. And the casino is taking, taking that and realize that caveman trait that was developed so long ago in your emotional brain can be really, really messed with, and it can drain money out of you. So number 3, believing that winning is gonna make you happy. You might get a rush out of it. You know, everybody, when you see these, all these things, these slot machines are just set up so they really just flash and stuff like that. They build excitement. They want you to have a rush that's not, by the way, unlike cocaine. Okay? And they're doing that and they feel that and for a moment they're happy, happy, happy. But then it goes back to saying, you know, the deeper need for joy, the deeper need to be a complete joy with self is missed. And so what happens, you start seeking and getting excited when trading, and it's gonna cause you to increase risk. You know how many times it happened? You start winning and all of a sudden you start thinking, oh, that is wonderful. I'm really there. I'm right there. And that's when you blow it because all that dopamine is sitting there and you're snorting cocaine. And before you know it, your mind is just out there and just la-la land thinking the good times are gonna roll on forever. Euphoria is here. And that's when they take your money. So we've gotten past that. The number 4 one, that you believe that you can make up for prior losses. This is a hard one to not fall into because you gotta think, no, I'm just gonna trade harder. When you actually see a person making up for prior losses, you're actually seeing them going, oh, I've taken these losses, I need to get my act together. But ultimately, this is a trade-by-trade thing. You have a certain set percentage of winning and all sorts of things can happen. But the thing is, is that some people, they do crawl out of a hole, but they don't crawl out of holes because you can make up for prior losses. They start trading better. Okay, if they had started trading that way in the first place, which is what I trained one guy to do, he said, you know, I have to lose $10,000 before I start trading good. And he realized, oh my God, This is really about my focus and what mind I bring into the moment in the beginning. And what he did is he had a pretty lackadaisical attitude about the mind he brought initially into trading. And when he took the losses, he woke up, became a much better trader, but he wasn't making up for prior losses. He was bringing a mind that allowed him to have a higher, higher percentage of winning. That's what he was doing. It was one trade after another. So the key here, the problem is not primarily a psychological problem. It's really about the inherited survival instincts. Okay, that's what it is. And the, the thing that happens A long time ago in a place far, far away when we lived in caveman-type communities and things like that, we did not necessarily— when we first came out of trees, we did not necessarily have a neocortex, that new thinking brain. And over time, out of the emotional brain, the mammalian brain, a tumor-like substance started growing. That's the neocortex. And as it grows, The emotional brain is wiring in just the best of communication going into the new brain. Meanwhile, the new brain has only got two telegraph lines from the 19th century going back into the old brain. So that, that new brain really doesn't have nearly as much control over what you're going to do than you think you do. So ultimately what you do is you go, you know something, this is really about taking my heart brain, that emotional brain, that caveman brain, and my thinking brain that makes us human, and really beginning to recognize saying, how do I start doing this? And you realize that you're going to have to master yourself in order to be a successful trader. OK? And to master yourself, you have to bring your thinking brain, that new one that makes us so different than the other great apes, and your old one, that mammalian brain that we share with the chimpanzee, I might add, our chimpanzee's neighbor. You're going to have to pull those together and build a new alliance. You don't have to, you can continue doing exactly what you're doing, but you're not, you're not learning the kind of emotional regulation skills, the emotional intelligence skills that you're going to need to rebuild the brain that was built for a world 8 to 10 million years ago, rather than the brain that you need to work in probabilities here today, if you're going to be a trader. So that's where it's at. And you know, out of this, Mastering your emotions starts with developing your emotional intelligence. This is where you, again, when the first, one of the first things I said when we first started talking was that an emotion is not psychological. It is actually biological. It's a biological action potential whose job it is, is to interact with changes in the environment in a lightning-speed manner. Okay? If your brain, if your thinking brain had to go over every decision you made all day, you would never get anything done. You would get a clogging. But what happened is that once you find a successful solution, it wires in. It goes and becomes Olympic reactivity. And it fires without consulting brain, without consulting the thinking brain. Brain. That's what's going on. So what you have is IQ. It's just the tip of the iceberg of what you need to become a successful trader. This is— there are plenty of places where you can learn good knowledge, good IQ about how to trade. That's the information. That's all that knowledge that you have to have a command of to become a successful trader. At the same time, then you take a look at it going, oh, this iceberg boy, there's a lot beneath the surface. That's EQ. That's emotional intelligence. That's about what makes you tick. And you're going to have to learn about what makes you tick and change what makes you tick from a belief standpoint. That's what we're after to do, OK? So if you get that, you realize Hmm, this gambling gene that we brought into the game, or your runaway emotions are instinctual. They are before thinking. And a matter of fact, what you'll discover is this, is that if you were to imagine the brain, the emotional brain as a locomotive, a big powerful locomotive, got power beyond belief. And if you were to take a look at the engineer that is driving that train, those are your beliefs about your ability to manage uncertainty. Okay? That's the deal. Your thinking brain is the caboose. That's where you go and it's just a place where you go to rest and stuff like that. It doesn't have a whole bunch to say about what you're going to do. Fundamentally, what it does is it makes up excuses, it makes up explanations for what the emotional brain, that locomotive, has already decided. And even more than that, the beliefs that the engineer has about his ability to manage uncertainty. That is where it's all at. And the truth is, is that gambling, you know, you just think you can win it. So now we're actually saying, hmm, what we're suggesting here is that you're going to need to rewire your brain neurocircuit by neurocircuit at the level of belief. OK? You're not built for probability. You are built with someone who wants to control the environment so that they can survive. If you have to lie to yourself the brain will lie to itself about its survivability. Okay? That's how tough it is. So now it's time to realize that this is really about how do I, how do I actually go in and start rewiring my brain? Okay? Now, this is really also called how to develop emotional intelligence. You're realizing that your heart, that emotional brain, that limbic system has enormous power. And that thinking brain of yours is going to have to learn instead of brutal assault, trying to just wrestle that limbic system to the ground and mastering it, conquering it, you're going to have to learn to be in partnership with it. So the question, though, is how do you do that? And what I want to do is I want to show you what I hope you come to understand is probably one of the most important slides you're ever going to see in trader psychology. Right here you are looking at the diagram about the way that the brain handles information coming in through, um, things happening in the environment being turned into information with your sensorial modalities, turning into electricity, coming to the thalamus. And at the thalamus, if you look at the thalamus as a traffic cop and he's directing all this traffic and all of it's all over the place and he's just running it through and stuff like that on a normal workday. And then all of a sudden what happens is that imagine that that cop hears a siren coming at him and all of a sudden he stops everything to let that emergency vehicle through. Well, that's exactly the way the thalamus and that emotional limbic system works. You have emotional stimuli coming in through your nerves, and it takes a look at it and says, is this dangerous? And if it's dangerous— when you see the area from the thalamus to the cortex, okay, to the thinking brain, well, there's a red line that's right looking at, at a line. And what I want you to look at is that is the low road. That is the— no, that's the high road. That is literally when the information comes in, there's not a problem there, there's no emergency, and it sends it up into the thinking cortex and really logical, rational decisions are made. Then the information sent to the amygdala and that controls the emotional response. However, if that emergency vehicle comes through and that thalamus cop stops traffic All information to the thinking brain is absolutely interrupted. And that second little red arrow shows up. That's the low road. And what happens is it's the low road and it is happening. It is happening. It is happening in nanoseconds. Information goes to that traffic cop. It shoots directly to the amygdala, forgetting the cortex, forgetting getting the thinking brain, and boom. And before you know it, fight flight has triggered and you're going nuts. That, friends, is how the brain works. Right now, I have been doing presentations like this for many, many, many years, and they're automatic. They literally just— the thing is, it's a circuit. It works. You turn it on, and it comes out of me and stuff like that. However, if you then ask it to do calculus on the side, you would see that pattern, that activation of response doesn't happen so easily. This is what's happening to you. And you're going to have to change the way the thalamus handles information. You're going to have to interrupt the process of it shooting information directly to the amygdala without first sending it to the thinking brain. When you see, when you think, I've got it, I've got it, I do it, why, why is it I'm blowing up all the time? Because this is what the thalamus is doing. It's seeing an emergency, stopping all that knowledge you have about trading, and then what it sees is it sees a saber-toothed tiger instead that it has to respond to now. And before you know it, you're, you're in fight-flight, you're doing dumb stupid things, you're revenge trading, you're overtrading, and you can't stop. Until you just burn through it, or you're so scared you can't get in the trade in the first place. Okay, that's what we're talking about here, friends. And again, mark my words, that is an incredibly important piece. And what I want to do is now I want to show you how you go and start interrupting this process and basically make a changing of the guards. So let's start. First, you're going to have to learn to regulate the triggering and arousal of an emotion. Again, an emotion happens when there is a change in status in the environment. When you see a change in status in the markets, automatically there's a change in status that means that the, the emotion is going to erupt. The first thing that it has to do is build strength. That is called emotional arousal. You would know it by flushing energy. You would know it by tension in your, in your body. You would know it by breathing, holding your breath, or panic breathing with your high up there. It's revving you up, revving you up. And at some moment it revs you up to a moment of where a switch goes off and that revving that is producing all this emotional chemistry rushes into your body, rushes into your brain, and absolutely alters the way you perceive reality. That's why you say, Randy, I have no idea. I was doing fine, and all of a sudden I went tilt, and I have no idea what happened. That's exactly what just happened. And you're going to have to stop the tilt where that begins. And I tell you what, I want to demonstrate this to you folks, okay? I'm going to explain diaphragmatic breathing to you, and I want you, wherever you are in the world, I want you to practice along with me. And what I want you to do is right this second, take a look at your body. Take a look at your neck, your shoulders, your jaw. I want you to notice the tension in there. And particularly, I want you to imagine a time that you did really poorly in trading and you really built the tension up and you built that stuff up. And then what I want you to do is also notice your breathing. Notice that two things are going to happen when you're in a problem. You will find that you're holding your breath or you're breathing, hyperventilating with your top part of your lungs, and no air is coming down to the lower lobes of the lungs, which is required to get oxygen to the brain. So you're cutting off air that the brain needs to think clearly, and we want to stop that. So here's the deal. And if you can, if I'm sitting in a chair and I have, you know, I'm upright. And what I ask you to do is to close your eyes and to imagine you're pulling air from the outside into your nostrils, down your windpipe, into your belly. When you pull air into the belly, you are pulling air to the lower lobes. You're really enriching the amount of oxygen that you're that your lungs are extracting from the air, making that available to the brain. Absolutely necessary if you're going to do clear thinking. So now I'm going to explain it a little less. I want you to imagine the air, pulling it in with your abdominal muscles, your belly muscles, pulling air through the nostrils, down the windpipe, down into the lower lobes, being pulled by using your belly muscles to pull air down, all the way down into your belly. Hold that. Release slowly, and as you release your breath, let the tension in your body drain, drain, drain, drain until you're loose and limp, loose and limp, like a sleeping baby. Notice that. Now go back, and we're going to take more words out of this. I want you to pull air into your belly, expand the chest, hold, release slowly. And as you release the breath, release the tension in your body and let it drain, Drain, drain, until your body and your mind are loose and limp, loose and limp, like a sleeping baby. One more time. Pull air into belly, expand to chest, hold, release slowly, and as you release that breath, Let the tension in your body drain, drain, drain like honey slowly pouring out of a jar until you're loose and limp, loose and limp like a sleeping baby. Now what I want you to notice is notice your mood, notice the emotion. Notice the lack of stress in your body. Notice that you're breathing diaphragmatically. Okay? And that I want you to particularly notice how differently you feel. This is actually something I teach in the group course. And you actually work with this for 3 weeks before we actually show up. Because I'm interested in you being able to do what I just demonstrated to you Here, I'm interested in you being able to do that in live trading so that you're regulating the intensity of the emotion and you're beginning to habituate this new way of breathing as you engage uncertainty. Because this is the first step. You're not going to get to the mind unless you start with your breathing, calming the emotion down so that it doesn't hijack, tilt your mind. This is— this has been, been done for 4,500 years, friends. And if you're going to be a successful trader, unless you have won the genetics lottery, you're going to need to start with breath to be able to calm the emotion down. The cool, cool thing is that your breath is part of the emotion. The tension that you have in your muscles are part of an emotion. You have a direct way of being able to take an emotion and calm it down. But what I want you to notice— and I need some people to have some reports here because I'd like to be able to read them at the end of this— about what difference did it make, just that little bit of exercise. And imagine if you were learning how to do this as a skill set, what it could mean. I've actually had a couple traders that when they did this, and this is the first part of the course, is they went from having problems in trading to where I was going, oh my God, what are we going to do for the rest of our time here? It's that powerful. But I'm not looking for emotional regulation to be able to solve the problem. However, if you cannot regulate the emotion, you never get to the mind where the beliefs are. That's causing all the problems. Okay, so there. Now, that's, that's the emotional regulation part that I teach. Yeah, that's step 1. And by the way, this again, I would encourage you to look at the group course because all this I'm showing you right now, it's taught in that group course. Okay, the second step is you're going to have to you're going to have to develop what I call the observer of the self. Mindfulness is what we call it. And this is where it kind of really starts coming home, where you're going to have to change about what you believe about yourself. You know, ultimately, what I'm asking you to recognize is this, is that you and your beliefs are not the same. In fact, you do not have beliefs or thoughts. They're creating your experience. You were born into a history where beliefs are embedded in family systems and cultures. And as you grow, you are live wiring them and they just take over long before you can think for yourself. And you start seeing through beliefs that are hidden from you. What we want to do is to develop an observer that can step back out of the current construction of the self that you say you are and recognize that you can reconstruct the self with greater potential. You can create a much more effective future self. That's what we want to do. And in this, what I'm asking you to recognize is this, is that in neurobiology, we would say that your brain is a community of rival emotional programs. Programs that are duking it out for the construction of the self. OK? And if you want to see an example of that, the cartoon by Disney Pictures, Inside Out, the first one, the one that's 10 years old, is a perfect example of how these emotional programs take shape and control the mind. Then what you're going to be doing is you're going to say, you know something? The mind becomes a space, literally, where it's the governing committee where these emotional programs are given voice. You're going to be stepping back out of them and recognizing that you, you can reconstruct the mind. You can reconstruct the committee of the mind. And what you can discover is that that governing committee of your mind is that it's where all these rival programs are and they're duking it out for control of the construction of the self. And you're gonna have rivalries, you're gonna have, it's not peaceful in there. You have to learn that you're actually having a mutiny going on inside your mind, particularly when you're under stress of trading, and you're going to have to become the leader, the ruler that puts that mind back together with empowered aspects of your being rather than what you brought from history. Because no matter how those beliefs were before trading, those beliefs in trading are not going to produce the kind of success you're looking for. They just simply are not. They're not going to do it. So now we're going— let's go to step 3. And then you have to become very aware of the inner critic and the adaptive voice. And you may say, well, inner critic, what's all this? Yeah, has anybody in here beaten themselves up or was really hard on themselves? Well, I have a question. Did it do any good? No. But the thing is, what I'm asking you to recognize is that the inner critic is the part that is actually criticizing you, judging you, assessing you negatively, or setting you up for failure. It's part of the human condition. I call it the inner critic. Okay? It's less emotionally charged that way than if you were to call it something more sinister. But the thing is, is that is what— it's there. And until you become aware of it, you really can't learn how to build it. And also, what happens is your brain is an adaptive organ. It adapts you to survive in whatever environment you're born into. And friends, I don't know if you've noticed, but we, we live in an incredibly broken world, and our brain is constantly organizing us to survive in that broken world, which means we're going to get dinged. So that you don't have a brain perfectly built for trading when you get here. Well, duh. The deal though is you're a human being You have the ability to reconstruct the self. And friends, that's what this group course is all about. It's about giving you the tools that allow you to build a unified self like this. What you're looking for is you're developing your potential for an empowered self. You're putting, you're putting like these, these in this boat. You're looking at people acting in unison with one another in coordination. Coordination with one another rather than at odds with one another. And the same way, the thing is, is that all that judgment, criticism, and stuff like that, depending on, depending on how disciplined you are, what you do with the brain, in the same way that there's all that criticism and judgment, there is also the discipline of a ruler, the courage of a warrior, the self-soothing of a caregiver. And the impartiality of a sage. These are emotional programs that you can learn to pull forward, and they become active in the committee of the self. You can learn to put these up during stress rather than the maladaptive ones. And you'll see it. My favorite— it's a guy I didn't really like, but Tom Brady, I did not like him as a football player for a long time, but I just kept watching him going, How does he do this? How does he constantly find these really crazy places to be in and pull things out? And all of a sudden, I realized what he has learned to do is he's become master of what mind shows up in a critical moment. He'd make a great trader. So you can actually train this organization of the self for acting in the presence of stress. That, friends, is what you're looking for. You want to do that, and it can be done. That's an example of a guy that's done it. And what is a trader mind supposed to look like? A lot like this. You know, the thing is, everybody wants to say, you know, something— if you know, you may be gung-ho, you need to be ready, you need to be, yeah, I'm positive, I'm gonna push through everything, yeah, I'm gonna attack— you're gonna blow yourself up. Actually, the work of trading is patience. You're looking at a cougar, okay? He is the apex predator, and you're looking at him. He's climbed a telephone pole, and he's sitting there waiting for a deer to go into the— walk into the setup. He's patiently waiting. He's not stalking like, say, the African lion. He's just waiting patiently. He knows this is where a lot of deer go through. There's a highway down there that they pass through and stuff like that. He's just waiting. When that deer comes into that setup, that guy drops that 20, 25 feet, and what he's attempting to do is to snap the neck of the deer. The deer actually falls down dead. Now, if he misses that, which happens a good bit of the time, the deer runs off. He does not chase that deer. He takes the small loss, goes back up I would say the tree, but in this case, the telephone line, and waits again for the forest to give him something. He is watchful, waitfulness, and patience. You're not looking at fear. You're not looking at excitement. This is the calm, patient, disciplined mind that the cougar uses for hunting and has allowed him to be an apex predator. Friends, that's what you want to build. That is the model right there. The real question is this: do you want to train your brain to become a mind for probability thinking, for being able to work well in uncertainty, to be able to see really it's actually performing that is winning? You'll be looking at your performances and saying, okay, I am— I have an edge. And now I have my mind in the right place to be able to execute that edge. That is winning. You come to a moment of saying, let's just say you take a loss. What you say is, was this a method mistake? No, I'd take that trade again. Was this a psychological mistake? No, I followed my plan. Then what happens is that becomes a victory. You followed your plan. It didn't work out for you then. That's the way uncertainty works. But this is the mindset you build. Your idea of who you are as a man, as a woman, how powerful you are, how, you know, all that kind of stuff, how respected you are, has nothing to do with your being. This, friends, is how you do it. It can be done. I see it happen all the time, and I encourage you. So, um, you actually have to become the change, friends. And a lot of people— and by the way, if you have questions, this would be a good time to start writing them in. And do them in the question box. The deal is there's a number of ways of engaging us. If this is one of the very first times you've ever seen us, get my free book compilation of articles and just start going through all the videos and start going, oh my God, why haven't other people been telling me about this, about how the mind works and uncertainty? And get that stuff and then maybe get my book and just kind of kick tires around and say, you know something, Does this guy make sense? And if he— if you finally come to the moment of going, oh, you know, emotional intelligence seems like a really good idea to apply to trading, then you look at, uh, we have, we have an individual course that is highly comprehensive and very personal. But the thing is, is we also have a group course that is a lot more affordable, okay? And it has 5 groups, and it teaches exactly what I laid out here to It teaches the same thing that the individual course does, but on a much more simple way than the, the kind of depth that you get into. The individual is getting inside your head and working deeply inside there. This is teaching you the skills to be able to do this thing. So the question is, is that if you're looking to be able to produce this kind of change, I invite you to the group course. And what we're going to be— you can do is you can actually get Basically, it's a $200 value. We want people to sign up early and start practicing before you get there because this course just goes out like a rocket. We want you practicing the breathing so that you have begun to be able to habituate a new way of engaging in uncertainty. Here's a question: how often do you offer groups? Uh, 4 times a year and in each season. And we're coming up on spring right now. So, um, and we're about— we've got one going right now, and we're about, uh, I think we're— we actually are going to be doing next week would be our last session there. So 4 times. Okay, are there any other questions about, um, the group course, about Um, material I've covered. Here we go. Kais. Okay. I had an issue of thinking my mind was the cause of my trading. However, I was simply risking too high with each loss, putting me in emotional stress, causing me to blow my account. When and if I stayed relaxed and calm for another 10 minutes, I would have continued to execute my edge and keep profits more. Is there more? That's it. Yeah, that, that's a good way of beginning to understand it. And the thing is, is what I also ask you to look at is what are the beliefs that got you into the problem in the first place? Okay. Let's see. That's all we have. Well, I'll tell you what, then I'm gonna start closing down, and if there's another question, we'll take it. But what I want to do is just simply thank you for being here today. I've— oh yeah, tomorrow, probably in the early afternoon, we'll have this up on both our website and and on our YouTube channel. So this would be something that you can go through and you can really examine and work with it. Okay, well, there you go. Well, friends, I want to thank you. It's been a lot of fun, and I'll see you sometime. Have a good evening. Bye-bye.
