Rande Howell

I depend on this observation. The key is learning to work with emotions. They can teach us much about ourselves if we are willing to listen. Rande Howell

Before I would accept, as an assertion, that women make better traders than men, I would have to see the source of that info to make sure that it is a grounded assessment. Noting that many purveyors of trading present a real "blue sky" vision of trading, my deepest suspicsion is that this statement is more of an attempt to lure women into trading than an actual statement of fact. That said, women (as a gender within a species of social mammalians) have a genetic predisposition to build nest and protect it. That certainly can be an advantage in limiting losses and managing risk. And generally women are not trying to prove their worth or their mattering using the vechicle of trading as men often do. The biggest problem I see with men is that they are not initially prepared to face their fears that they are confronted by in trading. Whereas women tend to have a much richer emotional language that always them to understand themselves when they enter trading. When men awaken the internal courage to confront themselves, they learn how to emotionally manage risk much better. Rande Howell

“We create the possibility of our future based on the way we interpret our world. Becoming a new observer of our world opens the door to new ways of being in the world.” Between the Crosshairs of Emotion and Trading Hesitation gripped Jack’s tensed hand. He couldn’t decide when to enter this trade. His trading plan said he had really gone past the entry point he should have taken. But he had hesitated – what if he was wrong? He decided to wait and track it just a little longer – just to be safe. This was the story of his trading life – waiting on the sideline frozen by his fear of uncertainty. “If I stay on the sideline, I’ll be safe,” he consoled himself. He watched the price go higher and higher. Still he hesitated. Ex-banker that he was – he wanted to be sure. But as he hesitated on the sideline pondering this trade, Jack also began to fear he was missing out on a profitable trade – he wanted in. He felt the urgency build. “Just a little more proof”, his tentative side whispered in his ear. “Get in this trade before it’s too late!” urged another impulse, “Sitting on the sideline isn’t getting you anywhere. You’ve got to get in to win.” This internal struggle in Jack’s mind escalated. Finally, to prove he had the courage to face his fears, he jumped in. The impulse to get in on the trade finally trumped his fear of uncertainty. In a matter of moments, however, the price began to tank and hit his stop. Because of his hesitation, Jack bought beyond the higher end of his entry range. He had missed the opportunity of profit. Instead, he took a small loss. Hesitation was fatal. Why Jack Can’t Trade An emotional roller coaster ride is not what Jack imagined trading was going to be like. Before he started investing in trader training, he studied the opportunity. With his deep institutional investing experience, Jack reasoned active trading was a skill set that he could learn and develop successfully. It was going to require practice and training – he was prepared for that. What he was not prepared for, however, was the role emotions play in trading – and the need to manage them. None of this was mentioned, or he did not hear it, before he committed himself to learning how to trade. No one told him that 90% of trading was in his head – putting himself literally on the line really fired up his stress level. After investing in a solid trading system and training to develop a methodology and trading plan, he was finding that he had a difficult time sticking to and executing his trading plan. And, it was the moment that he moved from simulation trading to having his money in the game that things changed. After all, this was his money he was risking now! In this new world, he seemed to be pulled emotionally in various directions at once. Fear and self doubt collided with a child-like impulsivity that left Jack stressed out and making poor trading decisions. Jack had spent a lifetime pushing emotions away like a nuisance. Now he felt emotional chaos and did not know how to get it under control. Whether it was getting into a trade or getting out of a trade, Jack was often confounded by a mixture of self doubt fueled by his fear of uncertainty or impulsiveness egged on by his fear of missing out. Caught in the crosshairs of these two emotional positions, his winning percentage was dismal. What he knew is that if he did not get a handle on his emotional nature soon, his trading account was not going to survive his learning curve. Thinking Hijacked by Fear A trader’s emotional state determines how he will interpret the market and what he sees as possible in the market. This is because all thinking is emotional state dependent. What does this mean for the trader? Everything – because we trade our psychology. And emotion drives psychology. In the example above, Jack was being pulled in different directions by competing fears. Initially his thinking was contaminated by a fear of uncertainty that kept him tentatively on the sidelines of trading. As he sat out watching the price climb, a fear of missing out on a profitable trade fueled an impulsive entry into a trade. And with no understanding of how to manage them, he sabotaged his trading plan and himself. Without a capacity to manage his emotional states, Jack’s thinking historically fell into self doubt and caution. When he was in the corporate world, this was never a problem. He was always able to steer clear of having to deal with the messiness of having to deal with emotions. In business, there was little need for introspection and he could always hold other peoples’ behavior responsible for the way he felt. It did not work this way in trading. There was no one responsible for his trading but Jack. In taking full responsibility for his trading successes and failures, he discovered that he had developed a habit of avoiding emotional discomfort. The breakdown for Jack, and many traders, is that there is no room to avoid the fears and self doubt in trading. They had to be dealt with head on – a talent he had never developed. Its time had come. Distinguishing Biological Fear from Psychological Discomfort To help him identify and resolve issues that affected his trading performance, Jack found a trading coach. By taking responsibility for his profitability, Jack came to recognize that he could develop himself into the trader he needed to be. The first thing that he learned to do was to separate biological fear from psychological discomfort. This is critical. The brain cannot distinguish between a real threat to life and psychological distress. Jack’s biological fight-or-flight system had been triggering him to avoid risk because the body interprets all risk as a threat to life. His brain’s hardwired motivation to avoid uncertainty (biological risk) put Jack on the sideline. But risking capital is not a biological threat – it does produce psychological discomfort though. When we are faced with the trials and tribulations found in life (particularly trading), our motivation needs to shift from avoidance of the threat for short term gain (biological fear) to approaching the source of the discomfort (it is not going to kill and eat us) in an emotional state of calmness, curiosity, and impartialness. It is in these emotional states that we become capable of long term problem solving. By learning how to calm his body and mind down so that fear did not sweep his thinking into negative appraisal and catastrophic thinking, Jack was able to learn how to take biological fear (and its avoidance motivation) off line before it swept him into reactive behavior. And he was able to replace it with the confidence of a risk manager. A risk manager knows that there will be losses – but there will also be a higher ratio of gains. His job was to reasonably manage risk over a larger number of trades. He had to develop a longer term view rather than a biologically driven, emotional, and short-term knee-jerk reaction to risk. Before, Jack placed life or death significance on each and every trade. With training he was using his psychological discomfort as a reminder that he needed to trade from a calm and impartial state of mind. His ability to take a step back from his automatic fear response into a calm state of mind allowed him to develop the qualities of a successful trader. Freed from habitual triggering to fear and dread allowed him to access inner resources within himself. By cultivating these aspects of his psychology, Jack developed his inner game of trading to a new level. Creating and Managing Peak Performance States of Mind He now mentally rehearsed his trading day, rather than just allowing it to hit him with full force. He used breathing and relaxation to calm his body and mind so that accessing calmness, discipline, patience, courage, and impartialness became a possibility – he achieved emotional state management. And with a disciplined daily practice of keeping the body and mind calm and mental rehearsal of calm assertive states of mind, he was prepared for the trading day. His inner game was in the zone. Developing this part of his inner game of trading led him deeper into his ability to manage his emotions and his states of mind – and it positively impacted many other areas of his life. He had come a long way from being stuck on the sidelines by his fear of uncertainty and then impulsively entering trades out of a fear of missing out. Jack’s decision to take responsibility for his states of mind and to learn to manage them created a very different trader. As a result a very different psychology of the self was deciding when to enter and exit trades – calm, relaxed, impartial states of mind rather states of mind rooted in fear. J. Rande Howell, MEd, LPC http://www.tradersstateofmind.com

No Holier than Thou. My statement was "generally". If a person seeks me out, I'm not hard to find. If my intent was primarily to promote, there would be alot more nuanced invitations. I probably get more writing ideas out of these discussions than anything else. One of the ones that really intrigues me currently is how traders break out over their approach to the markets. I see two primary streams. One approach is of personal growth where trading becomes the context that a person learns about himself and changes for a deeper experience of his humanness. Deeper joy and satisfaction out of life come out of this. And certainly this is my primary interest. On the other hand I see traders develop a calloused approach to trading in the markets, where it's really about dog eat dog. I have seen both successfully make money. The invention of the future becomes very different though. People who work with me discover fairly quickly that my work really isn't about trading, that's the context; it's about who they are in the world. The problems traders experience in trading are the same problems they have avoided in other domains of their lives. Trading just doesn't give much wiggle room though. If you're going to become successful, you will have to face your psychological demons. Trading leaves the trader no long term choice about. And that's why I like working with traders. Rande Howell

Please note that I do not generally promote my services in this forum. My intent is to keep a fairly clean separation between my participation here and my business. These forums provide a great arena to see the struggles of traders as they learn what it takes to trade successfully, both from a method perspective and a psychological perspective. So I participate. I find Siuya an interesting voice, often at odds with my perspective, but also important to my growth as a trader psychologist. His perspective is usually well grounded in experience and performance, so I listen. Whether I like what he says or not. My likes and dislikes are really not important to me. Performance in a domain always trumps my biases (most of the time). And I'm interested in Steve's students performances over time. Rande Howell

TroyMaster Don't feel like the lone ranger in this. I just got back from the Dallas Traders Expo where a large number of traders came up to me and said something like this, "I got sold blue sky by groups telling me how easy it would be to make money trading. I had no idea what I was getting into. And I was unprepared for trading psychologically." A number of trader education groups also talked to me about their frustration with having traders in their internet classrooms following them as they trade -- and the traders doing the exact opposite of what the teaching trader is teaching them, all out of fear. If you are going to trade you better learn a dependable methodology. And you better be prepared to retool your psychology so you don't waste a perfectly good methodology. What ever psychological demons you have been avoiding before trading, you will no longer have to worry about avoiding them -- because they will be stalking you. Most traders take 4 -10 years to "get" this. The markets will let you take whatever time you want to learn this. Get your head on straight for trading. It is a very different state of mind, most likely, than the one you brought into trading. Rande Howell

And I thought you and MM were buddies .... Maybe I should have an adult explain this to me. Seriously though, I have a couple of clients who are Iranian. They are not gay. But one is Iranian Muslim and the other is Iranian Jew. Best friends. Of course, they and their families, like gays, were forced to leave. Best of luck with this venture. Would be interested if you happen to find a few closeted "fearbies" in your midst and what (if they are there) you do with them. The good news is that their TA is a black and white indicator that takes all guess work out of assessing performance over time. Good Trading for you and your students Rande Howell

To bring a mindset rooted in fear of losing to a proven methodology into the uncertainty of trading is a waste of a perfectly good trading plan and system. After you have tweaked all the elements of your methodology and the problem persists, then look at your self limiting beliefs that actually drive your perception of possibility. These self limiting beliefs will show up as your thoughts urging hestiation or impulse. It is this voice you are looking for. Confronting the self limiting beliefs that limit the possibility that trading could be for you is the next step after that. Of course, to so that you will need to learn how to emotionally regulate the fear that drives your perception. Trading leaves you little choice to confront your inner demons. They are right there with you as your trade. They are hard to miss once you know what to look for. The good news is that they can be conquered as many successful traders can attest. Good luck and have courage. Rande Howell

First patience is a practice that we become competent in. There is also an assumption here that, in their right mind, the trader knows how to trade -- they know the rules and are not a rookie. The problem is that they do not know how to maintain patience in the face of uncertainty. Disciple has not been embedded as a sustained practice. Withoiut patience and discipline, uncertainty triggers to fear and stupid mistakes happen. How many traders have, went doing their review, have asked themselves, "What was I thinking?". Managing state of mind is the eccense of trading. Without it, you waste your methodology. Rande Howell

Patience is not a deterministic trait. It is a potential that is brought forth with applied practice so that it becomes habit -- and appears as a personality trait. Does the guy has a genetic predisposition toward patience? Probably so. Did he develop that potential into a performance level emotional state. Probably. What you are saying, is that even if it were not ideal circumstances, it could be done. Assuming you isolate the fear that drives your trading and master it. I won't go away. Over time you may desensitize it and evolve into a better trader. Many who participate in this forum have done it this way and found success. It is a choice. Rande Howell

Once you have the tweaking down, what are you going to do about the patience and worry parts of the trading system? Rande Howell

Very few people come off the shelf ready for trading. And, as you declare here, it takes a real commitment to the re-organization of the self to bring the potential that trading offers from the realm of possibility into the state of mind that actually trades. Good for you pipsmasterone. I appreciate your openness to change and to the act of becoming. Rande Howell

We certainly come from different positions. I hold that truth is in the eye of the beholder. Or what I call the observer. We do not see reality, we see shadows cast -- and there is always an observer interpreting what it is experiencing. Traders come to hold certain assumptions about the market. Some of these assumptions have been worked out and have become an effective way of dancing with the market. Yet, the market does not care what assumptions you attempt to place on it, nor does have awareness of the truths placed upon it by men. The people I work with usually have traded for a number of years. And they are successful in sim trading. They know HOW to trade a methodology what works in a classroom. It is when risk of capital is put in play that their "truths" about the market are challenged. It is at this point that I make the grounded assessment (not truth) that the trader is not separating uncertainty from worry or fear. This situation is highly trainable. The assumptions of self that have become hardwired as self limiting beliefs (their unexamined truth) are not failing because they don't know how to trade, but because they are not trained to operate in an environment of uncertainty. People will have to re-organize their beliefs about operating in an environment of uncertainty and their skill to manage it, but it is highly possible if that trader accepts full responsible for outcome. You're right in my estimation about "years of time on a therapist's couch". Being a licensed therapist myself, I came to the conclusion that most therapuetic approaches fall short of transformation of the self. They are good about getting through certain passages, but not about how to equip yourself to design a life worth living. This takes an expanded view of human potential. Fundamentally, I teach traders to use a set of skills and tools by which they do brain surgury on their belief system. Not a whole bunch of time on the couch. Trading becomes a great place to see up front and close the trader's beliefs about self in action. There is no hiding from the "truth" as it has been organized within the self. Yet most find that their "truths" are only unexamined assumptions about the world that drive their perception. It is at this moment that the assumptions behind the self limiting beliefs can be observed and re-constructed. Building your beliefs into a manager of risk rather than an avoider of risk is then the possibility. Anxiety at this point can be regulated and listened to, not from an avoidant observer, but from a disciplined and impartial observer. Very different outcomes. The "truth" they see allows them to be present to their trading very differently. The gap between sim trading and live trading narrows as they train their state of mind to embrace uncertainty from a perspecttive of discipline, patience, courage, and impartiality. A far cry from the anxious state of mind that had them hesitating and impulsing as fear sweep their thinking capacity away. By the way, thank you. You have helped me write my next article. Rande Howell

What do you mean by "my emotions are in check"? I'm certainly not sure. Here's the way I observe your comments: I took a break not being able to focus. I look a the the distraction inherent to not being able to focus. Suspect it is avoidance of discomfort. So my suspicion is that the distraction (motivation of the emotion) is an indicator of worry. Worry tells me that the limbic system is heated up by hypervigilence. This needs to be cooled down and the fearful part of self needs to be understood and encouraged. I will attempt to trade everyday. Can't tell if this is a structural problem (job) or fear based (simply can't face the trading room) The intensity of what I feel has mellowed out. This is the arousal of the underlying emotion. Most likely fear. Fear is to be soothed, not ignored. If fear is present, you capacity to observe from a mindset of impartiality is truly compromised. What ever the fear is, it needs to be understood, de-constructed, and separated from managing uncertainty. Our fears can teach us what we need to learn in emotional competency, but we have to approach the fear and push through it, rather than avoid it. This may be more than you want to hear. If it is, just let me know. Rande Howell

After being witness to numbers of traders become mindful of and deconstruct self limiting beliefs -- and then reconstruct more empowering beliefs about the self and world -- I find your deterministic ways of viewing the journey of a trader into competency short sighted. Maybe even elitest. Fear will always drive herd or tribe behavior until the person learns how to emotionally regulate both meaning and motivation of the emotion. Until that time, there will be a transfer of capital as you speak of. Most people did not arrive at trading's door with a genetic pre-disposition for risk managment. Most adapted to the world of uncertainty by avoidance of discomfort (this is called trading not to lose in trading). This particular organization of the self (the mindset) has to be re-organized where uncertainty and fear are de-coupled and a person's value is de-coupled from his performance. Then a trader develops emotional competency to go along with competency in his methodolgy. These are not skills learned by behavioral modification. They are learned as we learn to be mindful of our beliefs, not as who we are, but only as a range of possibilities that we became stuck in -- and they can be reinvented. It is true that fear based traders create a market for trader psychologists. And it is also true they can learn emotional competency and enter the journey toward mastery. It is a journey where we can reinvent the possibilities of our lives. I will leave judgment to its own devices. Rande Howell

You and many people. Trading has a way of forcing the issue. One of the most powerful ways of re-wiring our belief systems is by using self compassion to engage our self limiting beliefs. Remember that those beliefs were constructed when the brain was simply adapting and being developed by your emotional environment. And it is compassion that opens up our sense of worth to re-organization. Rande Howell

Bingo. Our brain organizes our perception to "see" the world we see. These are our beliefs. I am constantly amazed by how two different people, sitting side by side in a trading room, can "see" vastly different worlds. Two different belief systems are engaging the the trading world. One allows the trader to experience the trading world from a position of impartialty, while the other sees the trader see the trading world as place where he could make a mistake and get hurt. The know the one who wins consistently and the one that loses consistently. Rande Howell

We may come equipped with certain genes that, under the right conditions, express themselves in such as way that it gives a person an advantage. You see this taken to the zenith in dog breeding for certain traits. The Russian and Chinese use trait expression to steer young people with athletic promise. Humans are far more complex though. But I find nurture to be far more importance in developing a mindset than nature. Often those biases are handed down from one generation to the next. It's not genetics, but it is adaptation to circumstance. This is the money narrative. It is transmitted through the generations. Most of us grown up in environments that organize us to "not make mistakes" and focus on certainty rather than ambiguity. So by the time that a brain has approached maturity, it is biased for creating certainty and avoiding uncertainty. This is an organization of the mind that is not going to work well in trading. That particular adaptation can work well in other domains, but not in trading where the emphasis is on embracing the management of uncertainty and risk. Most of the people I work with realize that their historical narrative, now embedded in their neuro-circuitry of belief, is what has to be changed. There are no tricks or magic bullets. There is the rewiring of the observer of the self. zdo gave one of the better explanations of this process when he spoke of the desensitization process (of his fears and self limiting beliefs) that he muddled through as he evolved as a trader. The process rewired beliefs about self and uncertainty that opened the possibility of his trading on a new level. My point is that this process can be become more stream lined when we begin to understand how meaning is organized in the brain/mind Rande Howell

"Dale grew up in a hard working farm family in Arkansas. His parents, while growing up during the Great Depression, had nearly lost their farm. That experience really changed them. They hoarded what little money they had and came to believe bad things can happen if you can’t be certain about the future. And Dale was born into this legacy. Leaving the farm for greater opportunity, Dale became a banker in a trust department of a bank where he protected the value of assets placed under his care. He was a natural at his job of maintaining certainty in the face of threats to his clients' capital. As time went on, the bank was gobbled up and Dale was fed up. In a career change, he moved into day trading. He learned a proven methodology to control risk well and was prepared to trade. What he was not prepared for over the next several years was the hesitation and anxiety he experienced, and could not overcome, when he risked capital." ________________________________________ The brain, memory, pattern, and the unconscious mind make unlikely partners to your trading methodology. Like Dale in the case study above, after investing a number of years learning and tweaking a methodology that should provide an edge, traders often discover that something is still missing that limits their success. It’s not their methodology, they conclude – it’s them. Though they strive for success, they keep falling into the same self-limiting patterns over and over again. No matter what they try, who they train with, or who they listen to – they stay stuck and they do not know why. If they want to make money and are willing to invest the time and energy into learning, you would think that they would achieve their goal, even only by perseverance. It is as if something seizes control of their mind and their capacity to dispassionately trade their plan is hijacked. After the smoke clears, and they come to their right mind, most traders feel as if their bodies and minds were kidnapped by unseen forces. If you have ever thought this – you are not alone. What Really Drives Your Perception of Money In a capitalistic culture such as ours, our sense of personal worth, adequacy, meaning, and power get woven into our perception of money. As an example, a trader (who has not been successful for several years) is at a cocktail party. He strikes up a general conversation with an unfamiliar man. And the man asks, “What do you do?” Right there, the trader’s identity is tied to trading. The next question is, “Can you really make money at trading?” Though the trader has yet to be able to support his family on his earnings from trading, he answers, “Yes.” Then the trader proceeds to create a fiction that paints a rosy picture of his life as a trader. Actually the trader feels shame erupt and he feels “less than”, so he lies to cover up his embarrassment. The trader’s notion of being a successful human being and his sense of mattering in the world is so tied up to how much money he should be making that he finds himself lying. His worth, his importance, and his social standing are tied up in his relationship to money. Money has become the yardstick by which he measures his value as a human being. And as long as his perception of money is the measuring unit by which he gauges his worth, he will continue to struggle with finding success in trading. External validation by performance in trading becomes the judge of his character. His ability to make money in trading moves from competency of performance in a certain domain (where mistakes point out where he needs to learn in order to become better) to judgment of his worth as a human being. Where does this come from? We Are Born Into a Money Script Go back to the case study of Dale. Dale is born into a certain history and his brain adapts him to the conditions of that environment. His parents had been devastated financially by the Great Depression. Life had become very uncertain for his family’s financial survival. They were scared that they would not have enough money to put food on the table and a roof over their heads. Money was scarce, and they could not afford to lose anymore. This was the mantra by which they lived. Like many of their generation, they became savers and avoided risk at almost all costs. They were risk-averse and had developed a way of seeing the world as a dangerous place where things that could go wrong - and did, in fact, go wrong. This became their mindset. And it governed the way they saw life. Their mindset for managing the uncertainty of life was that of a victim of circumstance beyond their control. And into this mindset their son Dale arrived. He was born into this perceptual amalgam of risk, money, inadequacy, powerlessness, and possibility. His brain adapted him to this circumstance. No one noticed that this way of seeing the world had taken over their perception. It was like water to a fish. It was a set of assumptions that had become so familiar, so true, that they were never questioned. And these assumptions of risk, capital, power, and worth became woven into the neuro-circuitry of Dale’s brain and mind – and became his beliefs. This is the money narrative. The Money Narrative All Grown Up Like many people who eventually become traders, Dale grew up and came to trading as a second career. He, like other traders, physically left home and never realized that he was taking the money narrative rooted in this history with him into his adulthood (think about the first career he drifted into). And into his trading. Most traders, just like our friend Dale, have never questioned their beliefs about money – the money narrative. Understand, you do not have a money narrative – rather, a money narrative has you. It is not yours – you belong to it. In particular, traders rarely ask themselves, “What is money to me? What does money mean to me? And where do these beliefs about money come from?” Money will form a certain symbolic representation that connects your sense of power/powerlessness, your sense of adequacy/inadequacy, your sense of mattering/not mattering, and your sense of personal worth/worthlessness into your personal money narrative. And all at the pulling of the trigger where capital is put at risk. In Dale’s example money was connected to his sense of power/powerlessness and to his sense of adequacy/inadequacy. He had avoided confronting these carefully hidden self-limiting beliefs about himself until he started trading. He came face to face with this money narrative (what money and risk means) every time he attempted to pull the trigger on a trade. His money conversation of losing everything and being powerless (that he was born into and adapted to without his knowledge or consent) came rushing into the forefront of his awareness like a ton of bricks every time he attempted to pull the trigger. By becoming aware of this hidden money narrative, he began to alter it. The biggest problem with traders is when they resist acknowledging the presence of the power of their personal money narrative. Most traders are not so fortunate as to be born into a thriving money narrative that balances capital with risk management. Most grow up in families that attempt to avoid uncertainty and risk by not making mistakes. Yet, a money narrative that incorporates management of the risk of uncertainty is vital to successful trading. Finding the Hidden Money Narrative What’s your historical money narrative? One of the most effective ways of discovering the assumptions that have become self limiting beliefs that drive your trading is to ask two simple questions: First - what personal assessments, criticisms, and judgments do you have when you beat yourself up after a loss? This will tell you how your worth, mattering, power, and sense of adequacy is connected to money. Second - observe your personal assessments of yourself when you are on the winning end of a trade. Notice how your performance becomes a yardstick to measure your worth, your sense of value as a human being, or your personal sense of power. Money has become a symbolic representation of who you are. (Confusing net worth with self worth.) The problem is that this narrative has you, you belong to it – and you are its captive. Enormous freedom becomes possible as you learn to be mindful of your financial narrative. It no longer has to control the way you connect money, performance, value, and adequacy as you begin to de-construct the narrative to which you were born. The most powerful part is that at this moment, you can begin constructing a much more empowering narrative about money, worth, meaning, power, and possibility. And your trading just becomes a performance to assess and improve, rather than a judgment of your being. Rande Howell

Enigmatics People get into trading without ever realizing what they are actually doing. On the surface it looks like all you have to do is learn a system to create an edge, pay your dues in really learning how to use that methodology, and sometime later -- you experience success in trading. They totally miss that trading is also brain surgury. There is no silver bullet solution to your trading problems (or anyone's elses). It is simply a myth that you bought into -- particularly from indicator educators rather than methodology educators. Just like you have to train to a methodology that moves trading from gambling to risk management -- so must you develop your psychology, your mind and beliefs, to design the state of mind that brings a psychological edge to your methodological edge. It has to be built because few traders come psychologically equipped off the shelf for success in trading. That you have come to a moment of not being able to figure it out is the beginning part. Your perception of money and risk has much to do with success. Most fail because they tie their performance in trading to their sense of adequacy, mattering, worth, and power. Their performance becomes an indicator of their worth and not simply their trading competency. That's a faulty belief system. I encourage you to look at the beliefs you hold about your efficiacy in life. The patterns of performance in trading are eerily similar to more global patterns found in other areas of your life. Trading is not a silver bullet to cure them. But it will sure point them out. If you happen to be going to the Dallas Trader's Expo this month, I will be speaking about this very thing. Rande Howell

What stands in your way to making money consistently? Many traders, four years in, have a methodolgy that works. It works in sim trading. But when capital is put at real risk, the mindset that trades the methodology becomes unglued. What's your situation? Rande Howell

zdo Particularly for a guy like you, yes. We always carry a historical financial narrative that has come down the generations and through circumstance. Hopefully, in the course of training yourself to trade, you alter this narrative. This demonstrates a reconstruction of this narrative. One time you spoke of over time desensitizing yourself to certain fears and eventually learning how to trade from a different way of understanding money, risk, and identity. This is called ontological reconstruction of a narrative. There are still historically embedded narratives running around in your neuro-circuitry that can take over perception if you as a trader lapse into mindlessness. And there are new ways of understanding money, risk, and identity that have been manufactured over time and practice. These, when brought into the forefront of awareness, becomes the financial narrative that aloows you to trade from a much more empowered position. Rande Howell

johnw It's probably a little of both. There was an excellent interview by Terry Gross with George Soros a few years back. In it Soros spoke of an Observer/Participant. He said most of his success had come from being able to develop this Observer, yet it was never fully independent of the Participant. He had never become completely detached from emotion, but he recognized that being in the game of investing he was never independent of emotion. (Now, from my perspective event impartiality is actually an emotion -- but that's another discussion). By being aware that the Participant was never fully independent of the Observing Self, he had built in a check that worked as a feedback loop into his capacity to Observe. This makes a lot of sense to me. And it is something I practice in my life and teach. The key here is in recognizing that meaning (belief) becomes fused into emotion and becomes an element of emotion. By becoming aware of the meaning that is embedded in the emotion, we can deconstruct the ontology that drives our thinking. Fear, for example, usually has a meaning ranging from inadequacy to powerlessness to worthiness attached to it. When fear triggers, the deeper self limiting belief can be seen in operation. This is when it can be worked with. With work, that meaning is reconstructed so that it is more effective in dealing with managing uncertainty than interpreting uncertainty as something to be fearful of. Gotta get the awareness going first. Rande Howell

Yes. A typical way a trader really messes up is when he is actually experiencing worry (negative appraisal) as he is staring at entry points. Instead of dealing with the worry, it escalates to fear (running, hiding, freezing) and he becomes paralyzed. Others will attempt to ignore the fear and jump into an ill advised trade. There will be an implicit limbic memory that links risk, uncertainty, mistake, and fear that becomes embedded into the emotion. It is this that needs to be brought into awareness. This is where self limiting beliefs can be ferreted out and changed. Rande Howell

It is estimated that 80% of any decision made is based on implicit emotion rather than explicit emotion (like logic or reason). What makes trading so interesting is that the trader really has to develop an awareness of the emotions and meaning attached to the emotion pulled out of awareness that are present during decision making while trading. Rande Howell