How to be Calm, Cool, and Collected while Trading

[Music] you know traders expend a lot of energy developing a knowledge base that allows them to really work a trading methodology they work hard they develop lots and lots of knowledge they develop they develop tools okay they do all this stuff and they feel confident that what they should be able to do okay and then yet all that knowledge that they've learned in a classroom that works so well when capital is not at risk they get into trading with capital at wrist and suddenly all that knowledge slides out of the window and ago what happened what on earth just happened well the truth is is that they don't understand emotion very well if they understood emotion differently than the way they understood it right now they would be able to understand that all that knowledge is only useful when the emotions are under management unfortunately what happens in trading is those emotions are not under management and what happens is that the moment that they hit the risk all that biological programming and psychological programming that was kind of hidden push back in the back suddenly arises to the front and takes over trading mine and all of a sudden you can't get into trades you can't pull the trigger you can't take a loss you just absolutely start feeding bad trades or you jump into trades you shouldn't be in all that stuff when in a rational mind you would know better so the bottom line at the very core a trader really has to develop a better understanding of emotion and himself and his ability to perceive and think and act in an environment of uncertainty the first thing is let's start with an emotion okay what do you think an emotion is is it a feeling well in neurobiology an emotion would be considered a biological action potential whose purpose is to coordinate activity between the organism and the environment that it's a part of powerful you go whoa what's that all about it's not psychological it is literally about how the brain adapts and reacts to changes in the environment because at the very moment if you get that definition of it emotion is as biological action potential how does an emotion show up well for vast amounts of time what they've learned is that an emotion shows up at any moment that there is a disruption to a standard sensorial pattern that the brain is already created now out of a textbook and into trading you would actually see that it's like if you have problems pulling the trigger it's literally when everything is fine and then all of a sudden a trade starts taking shape you start getting confirmation it's at that moment that there is a disruption to standard sensorial pattern and in that disruption and emotion a biological action potential that coordinates activity between the emotion between the organism and the environment is going to take place it's only a matter of which one and this is when you begin to have to understand there is no such thing as freedom from emotion what there is and that you can be developed is freedom of emotion life is full of challenge and nothing typifies that more than trading where there are constant challenges where you don't know how things are going to turn out okay no amount of control no amount of force is going to change that we you don't know what's going to happen so you're losing control over outcome which we kind of have an illusion about and now altima then we get reactive emotions showing up that's what we have to alter how do you go about doing that because understand this most traders lose before they ever begin they wake up they go through their process of getting ready for trading in a mood where either anxiety or fear is in the background and they keep trying to push it away push it away push it away ignore it and yet the more they resist that emotion the more the emotion persists so you begin to recognize oh my gosh I can't ignore because it's going to persist and I need to really start looking at how do I manage its emotion the emotion is going to arise and trigger anytime there is a change in status happening all the time in trading okay now now that we know what an emotion is when we begin to look at the components of an emotion its what gives us great as about being able to manage the emotion the components are this first there's arousal arousal you would experience as tightening of muscles holding a breath arc or fixation like that looking at the screen what you're seeing or when you begin to feel or hear your heart rate beginning to raise what you're experiencing is the revving up an emotion getting you the trader ready for action survival action okay that's the key you no longer in rational mind what happens is the emotion is growing to take you into action where you don't have to think it's all about survival now this is the very place that change can happen more about that a little later the second component is feeling feeling is not touchy-feely when you feel an emotion you are literally experiencing the chemistry of that emotion in your body in your brain and when you feel it it is altering the way you perceive the way you think this is what happens when you say well I just got hijacked I don't know what happened well that's what's happening is you didn't see the emotion at arousal you weren't able to arrest it or manage it and it hit a particular trip switch and before you know it what you have is you have feelings chemistry an anxieties case cortisol in like overconfidence case dopamine and adrenaline horrible mix for risk-taking again and ultimately that takes over thinking your job as a traitor is to manage that emotion that gives rise to thinking that gives rise to the mind that you bring into the moment of trading that's the real key so now we've got feeling and we've got arousal the next part of an emotion that you really need to know about is motivation motivation is a tack avoid approach attack avoid is that at at in basically the fight fight response and that's what all that building of energy is about and that's what you do not want you want you want to be able to notice the emotion growing you want to manage the intensity but you want to direct it away from fight flight into approach into approach that is that calm confident calm mind that you want for trading you have to discipline you have the curiosity your calm your cool your collective approach motivation you've taken the same emotional energy that was growing to provide flying but you've diverted it design-wise into building a very different mind really powerful stuff the fourth part of it emotion is the beliefs that are tied to those emotions to those reactiveness that that need to coordinate activity within an environment between the organism and the environment because ultimately that belief is really what it's really boiling down to what you're seeing in your trading account what you're seeing is the beliefs that you have that your ability to manage uncertainty okay whether or not they're effective or not if your trading accounts growing and your equity curves going up like that yeah it's very obvious at the beliefs that you're bringing to the management if I certainty are effective at trade at managing the possibilities with an uncertainty if it's not if it's stagnant or going down what you're looking at is hmm the emotions and the meaning behind this emotion so its beliefs that I'm bringing into that moment are not effective for managing uncertainty they're probably very effective for managing survival which is what it's trying to do they're triggering for you to survive and live that day whereas in probability mine what you're doing is you're recognizing that this is all probability it's all uncertainty you have a chance of winning and losing and your focus on process rather than outcome that's how the traders win to do that you have to have emotional control and that's not done by willpower it's done by emotional intelligence so we've gotten this belief the last part of an emotion that I don't work with is temperament temperament is that part of that your Constitution that is governed by genetics and is just behind you no that's that's what that's my paygrade but when you understand this and you start taking a look at the way to manage an emotion to manage the mind you realize there's two huge portals first you start with recognizing that you really need to become emotionally intelligent you really do if you're going to be a successful trader but those two corridors is literally when you see the arousal component of an emotion you literally need to become an observer of your body and your mind but in the body you begin to see the telltale signs of arousal and you can learn through a dark romantic breathing and muscle relaxation you can learn to relax that tension by relaxing that biological tension and also altering the breath style that you're breathing what you do is you control the intensity of the emotion that's arising you can actually change it from fear which requires that kind of breathing to calmness more diaphragmatic and what you're looking at is the arousal still there but it's managed so that you're in a zone so that you're alert you're focused and you're ready but you have not triggered your body into fight flight you have that ability of moving over to approach motivation where you can find the coolness the calmness and the confidence and the discipline to manage uncertainty it's no longer a threat to you that's the point so you're looking at that you're going okay I now understand that ultimately I have to come smarter about the use of emotions and what they are instead of trying to ignore them I need to turn toward them and you can develop the skill sets for managing the intensity of that emotion to emotional regulation skills okay and of course we teach those is the first line of how to deal with emotions that's got to happen okay it's got happened until you become emotionally intelligent and really start working with the body you're not going to have the mind that fits trade the second piece though is which is with this understanding is that no matter how much you regulate emotion you still only get to the door of the mind you have to open the door of the mind and look in and find the beliefs that are roadblocks to the development of your potential okay really important to develop that ability to observe you have to develop a skill of mindfulness of being in stepping back out of thought recognizing that you and your thoughts are not the same you and your beliefs are not the same and this person that's trading is ultimately just one potential organization of itself and that self was organized based by a brain based on the brain that was just simply adapting you to environment there's nothing wrong with that however now you need to train the brain for a new environment very different from the survival brain to do that you have to get into the belief systems and the beliefs are pretty simple it says rocket science is that ultimately with Raiders what your confronting and finding is a sense of inadequacy oh I can never win it's always against me a sense of not mattering I have to make a lot of money in order to be successful or deserving I don't deserve success I need to work hard okay or powerlessness and you still powerlessness before when you get into a trade and it's bouncing around on you and you feel like you're just being swung all well that's powerlessness you have to learn to manage that and you begin to see that the beliefs are literally about what beliefs do i whole about my ability to manage uncertainty that's the big deal ultimately I teach a system that teaches you how to one calmly the emotions down and get management of them but more than get much deeper into being able to repair the sense of worth you have about yourself and to be able to bring forward a very new set of beliefs it's not based on like the affirmations and visualizations and NLP and stuff like that those are rules surface things but it gets at the very core of what the belief structure is that is embedded embedded into your neural networks that's what counts and you see that reflected in your trading account so you have a barometer you have a meter that's telling you literally just what are my beliefs about that I am bringing in to the management of uncertainty your trading account is going to tell you that if you're listening these are the things that I found that really over time produce a trader who doesn't understand why they don't have the ability of managing the knowledge base they have under pressure okay the pressure training the pressure of uncertainty and those who become successful traders who recognize that you know something I never had control over outcome what I have control over is the process of trading I have control over the mind that I bring into the moment of performance that is the sign that you begin to recognize that this is a probability based mind you need for trading rather than survival-based mine that is very useful in other parts of your lives come and learn more come to the website get the free materials read the articles watch all the videos but then start digging down start digging down and really asking yourself do I really want to develop my mind so that I can trade effectively am I willing to pay that price to do that it's not a financial price it's a price up here of recognizing that this has to change it really does it can be done it can be taught but you have to be willing to be willing to do it the question is that if you're if you're willing to be willing come look at the website check it out let's take a look and learn fair not take care i've really enjoyed myself and i wish you the best Thanks [Music]

Channel: Rande Howell

Views: 83,944

Rating: 4.9540801 out of 5

Keywords: trader psychology, trader psychologists, trader coaches, performance coach, fear based trading, mindfulness, emotional control, psychology of trading, in the zone, peak performance, Mark Douglas, self-limiting beliefs, discipline, patience, over trading, impulsive trading, confidence, over confidence, calm, emotional state management

Id: CzWJo8BJPPE

Length: 17min 1sec (1021 seconds)

Published: Tue Jan 31 2017