How Much Pain Before Change?

[Rande Howell 10]

A Time for Self Reflection:

 

Why do so many traders stay stuck in painful self limiting patterns rooted in fear and self doubt? It's not like your trading account will allow you to live in comfortable denial for long. Hold this question in your mind. The trader can see that what they are currently doing is not working. They acknowledge they need to do something about their fear-based trading - "they talk the talk" - but they, for some reason, can not push themselves into "walking the walk" of actually doing something about the power fear has over their trading. What's at work here?

 

I asked a very successful trader and teacher this question, and his reply was:

 

"Because the trader has not suffered enough pain." What!? I asked him to go on. "It takes tremendous pain for a trader to seek help and decide to change his ways. It was the same way for me. I'd been trading for 7 years before I finally cried out "UNCLE "- I've had enough and sought help for the psychology I was bringing to the trading room - I had blown out several large trading accounts, had declared personal bankruptcy, and was staring at my family starting to fall apart. That is what did it for me."

 

"Until then, I had way too much pride to admit that I was the problem - not something outside of me. It just wasn't me I was destroying - it was my family. That was rock bottom for me. I couldn't allow that - the pain was just too great. Finally, I knew I had to do something. Avoiding my pain wasn't worth it anymore. It was just a short term fix anyway. The fear kept coming back. In getting beneath the hood of my mind, I found the courage, plus the skills and tools, to face what I had spent my entire life avoiding. I know now that my fear of not measuring up created a bigger than life personna that tried to protect me from feeling my wrong-headed sense of unworthiness. "

 

"What's crazy is why it took me so long. I was really invested in "looking good". I much prefer who I am now than the trader I used to be. Losing is not longer a statement about me anymore. Anyone who trades professionally trains themselves to emotionally think in terms of having an edge in probabilies as they approach the uncertainty of a trade. Over time they are going to have more winners than losers and the winners will be much bigger than the losers. Calm, detached, confident, and humble. Losing or winning is no longer emotionaly charged. Confronting my fears allowed me to separate fear from uncertainty. This psychological freedom is what has allowed me to develop the trader I am today. But I had to experience pain beyond my threshold before I was willing to push through my denial and face the demons roaring like a hungry lion in my mind. Once did that, I wondered why it took me so long to do something so simple."

 

What can you learn from this trader's journey into financial success and personal growth? What I want you to notice about this trader's story is how long he stayed in the denial that continued his march into pain. I also want you to notice the enormous pain he shouldered. What was the cost of his not acting to master his fear? Hundreds of thousands of dollars for sure. But you, as a trader, know the cost of not confronting and mastering your fear is much greater that dollars alone. It is the loss of your potential as a human being that is really robbed. The tragic part is that it is not the market that robs you. It is nothing outside of you. It is your fear that robs you of the potential that trading offers. This is what keeps the unsuccessful trader locked in the comfort zone of his self limiting beliefs.

 

How do you or how have you broken out of this biologically-wired spell fear has entranced you? Where are you at in the evolution of the trader in you?

 

Rande Howell

[SIUYA 11]

Years ago when I first started trading I was chatting to a friend who was also trading - we worked on the option floor at the time. He was sort of big noting himself at the time about how he was the big player in the pit, how good his year had been, how if he left his firm they would suffer etc; etc;.( At the time I thought he had been stiffed on a bonus. )

This guy over the years never really made much money trading and is now a broker, partially as a result of this conversation.

 

Anyway... as you do on any floor, you pull these guys down and tell them to put their heads back in the box and get over themselves - all in good fun of course, but I said something that just came out without much thought, that has helped me in my own trading, and he still reminds me that it helped him put some perspective on his own trading/place in the markets even 15 yrs later.

 

what I said was along the lines of.....

"If you got hit by a bus at lunch today, by tomorrow you will have been replaced by your work as they need someone to manage the books risk, by next week you will be in the ground and we will be lamenting your loss, in 2 weeks time we will get over it and occasionally we will reminisce about remembering the time when you did something - most likely unrelated to the trading or the market, and all the while the market will not care who you are, what you did, think or say."

 

What both of us got out of it was that looking impressive, big noting yourself is relevant if you are selling, but when it comes to trading and managing risk its all about the doing and not the talking.....even if you are making good money. Why go through the pain of banging your head against the wall, either do what works, or do something else. (I also know quite a few people who have gone through this, so its not uncommon)

[Tradewinds 12]

The subject of fear is a foundational element of life. My opinion is, that we need to break fear down into it's positive and negative influences. If I burned my hand on a hot stove burner because I was not paying attention, and after that experience I start being more attentive around a hot stove in order to avoid burning myself again, that's a good thing. If my fear stops me from using a stove altogether, and my nutrition suffers because I won't go around a stove anymore, that's a bad thing. If, after I get burned, I don't face my fear, then I'll stop cooking. That's a bad thing. My argument is, that it depends upon what the fear is associated with. How did the brain cells get wired to interpret that fear?

Learning how to operate a stove is very simple. Learning how to make money trading is not easy. Don't misunderstand me, I'm not saying that trading can't be easy and simple. I'm saying that coming up with a winning trading strategy is not easy and simple. Those are two different things.

My point is, that once fear has settled in, and that fear becomes associated with something that you don't need to be fearful of anymore, then you have a problem. If I fear trading, and I don't have a winning strategy, then the fear is actually a good thing. The only time the fear of trading is not good, is AFTER you have a proven winning strategy. It's important to make that distinction. My fear of trading has kept me from loosing a lot of money trading. That's not necessarily bad.

Now that I have a winning strategy, I need to disassociate the fear from the trading.

[Rande Howell 10]

My point is, that once fear has settled in, and that fear becomes associated with something that you don't need to be fearful of anymore, then you have a problem. If I fear trading, and I don't have a winning strategy, then the fear is actually a good thing. The only time the fear of trading is not good, is AFTER you have a proven winning strategy. It's important to make that distinction. My fear of trading has kept me from loosing a lot of money trading. That's not necessarily bad.

Now that I have a winning strategy, I need to disassociate the fear from the trading.

 

First, fear needs to be deconstructed from both worry and fear. Many traders have this pattern engrained in the way they see and interpret the world. Otherwise it is hard to learn to stop putting your hand on the hot stove. What I find most often is that the trader has a winning strategy as attested by simulated trading, but the capacity to learn from mistakes is compromised by the very thing your speak of here -- the need to decouple past learning based on fear and present learning based on risk management of uncertainty. Fortunately this can be done. Re-organizing the trading mind around discipline and impartiality in the face of uncertainty (rather than a form of fear of death) is the next step.

 

And you're right, if they don't have a winning strategy, I hope that fear does stop them from losing money needlessly.

 

Rande Howell

[Richie1977 10]

Good posts ...I agree with all of the above....especially determining good and bad fear...

[Rainmaker626 10]

It's one thing to say not to have fear or to not let fear cripple you, but it's another thing altogether on how you go about conquering that fear in order to trade..

 

I think that's where it gets tricky for a lot of people is what's causing this fear and if this fear is well founded or if there's no cause for having fear... Most people fear things, because they perceive a negative outcome from something.. It's actually akin to that old adage: "Once bitten, twice feared" So if a trader is losing trades because they fear or worry about pulling the trigger or coming out of a trade too soon, then they simply need to work on their methods or they simply need to trade with money they can afford to lose (the distinction is money they can afford to lose, not money they can lose)

 

If traders depend on their trading profits to maintain their livelihood, there's a greater chance that they wont be able to execute their trades having to bear the burden of not being able to provide for self and family if they are on the wrong side of a trade...

 

Whereas if you trade with money that you dont need to maintain your livelihood, there's a greater chance that you will have more flexibility in executing your trades as the burden of a bad trade wont weigh so heavily...

 

 

To me it's one thing to tell traders not to fear and another thing to discover what's causing their fear and to tackle that..

[ahimsa 10]

I beginning to think that it's true that the only thing that we must have fear it's the same fear.

[SIUYA 11]

anxiety is good, its natural.

The fear of not sticking to the plan should be what we are worried about.

We should not fear the market we should fear ourselves.

[ahimsa 10]

Ya,but it's hard being awareness that we are the first enemy of ourselves,the anxiety is good but for tr

trading is better to be more cold,i think that only in this way we can have strong nerves and good gain.

I don't want become my enemy,for me(reasoning without psychologic factor for a time ) the only fear that i have in trading is to loss money.

[Tradewinds 12]

I don't want become my enemy, . . .

 

We are our own worst enemy. At some point, if things are going bad, we can start to self-destruct. And human beings have a very high tolerance for self-destruction. We can almost kill ourselves before we get tired of it.

 

So I guess the answer to the question, "How Much Pain Before Change?" is; A LOT! So what's the solution to this problem? I don't know. We need to push ourselves to a new level. Get out of our comfort zone. Be willing to take a brutally honest look at ourselves and our strategy.

 

Part of the solution is testing your strategy in live trading, or the equivalent. If you are practice trading in "sim", it's crucial to have a sim system that fills orders the same as in live trading. If your platform does "touch fills" in sim trading, then it's almost useless. In fact it can actually be damaging to your trading ability, because you can develop trading habits that will cause you to get "killed" in real trading.

[Rande Howell 10]

It's one thing to say not to have fear or to not let fear cripple you, but it's another thing altogether on how you go about conquering that fear in order to trade..

To me it's one thing to tell traders not to fear and another thing to discover what's causing their fear and to tackle that..

 

To our mammalian brain (limbic system) fear is not complicated. Any threat to survival triggers the fear of death. And this element of our brain is mandated to attack/avoid/approach the threat as a solution to the problem. Then along came the neo-cortex and things got complicated. Suddenly there was all sorts of finer distinctions of the meaning of fear. It's this organization for survival's sake around the base of fear that I call a core wound. For trading purposes I isolate 3 core wounds that human's perception and action become organized around. They are inadequacy, not mattering, and unworthiness. Most humans try to prove their adequacy and their meaning and purpose in the world externally by performances. This is called external validation. If a trader brings this into his or her trading day, proving the self by performance, there is most likely going to be trouble. As we learn to de-construct the value of the self from performance, we come to a place of internal validation. Performance and being are separated. This is the value of developing a mindfulness practice as part of the development of our psychology. Threat (possible loss) is no longer a reflection of the value of the self. Our limbic system doesn't trigger so grandly and the trader is able to bring a disciplined, impartial mindset to the trading performance, rather than one tainted by fear. PS -- Most folks find this internal validation as part of their spirituality.

 

Rande Howell

[zdo 20]

Thanks Rande. Great post. This 'validation' issue is part and parcel of why I bang on and on at

http://www.traderslaboratory.com/forums/f37/edge-first-integration-first-both-first-8410.html

 

PS just an aside into humans...

I stay amazed at how low awareness of this is with traders... even with those who assert how 'independent' they are...

The one's for who this has never been an issue are the ones mostly likely to discount it ...

On another hand, many ostensibly normal ppl are so deeply 'in', you could actively confront them with it and they still wouldn't immediately, if ever, come into any awareness of their external validation orientations

[Tradewinds 12]

As we learn to de-construct the value of the self from performance, we come to a place of internal validation.

 

I see this in myself, that I look outside of myself for self-worth and meaning. Looking to myself for self-worth and validation seems wrong. I can't accept it. It seems like the viewpoint of looking for external validation is permanently cemented in my mind.

 

To me, life has meaning only if there is right and wrong. And life only has meaning if I'm on the side of good. If I'm on the side of evil, then eventually, evil will self destruct. But, I guess I'm self-destructing if I look outside of myself for self-worth and validation. So if good is defined as ultimately being constructive, then I should seek what is ultimately constructive for my life. And if giving myself internal validation is ultimately good for me and will lead to good things in life, that would be doing what is good and right. Okay, I've devised a logical proof in order to make myself believe.

 

So now I just need to believe it on some deeper level rather than making it an exercise in logic. How do I transfer the meaning of my logic from the rational part of my brain to the feeling part of my brain? Do they have a pill for that? :rofl:

[ahimsa 10]

right ,to be awareness that the initiation to the self destruction,is ever inconscious and when human being realize that it is started is almost always late.i'm lucky because i'm coming out of pain NOW. Sometime i think that i suffered before starting .Sorry but i don't understand tradewinds how do you mean for "out of the confort zone"why you want add more problem,?

[TimRacette 11]

Rande, I think a lot of it has to do with where we are drawing knowledge from in the brain. We pull memories from the back and logic from the front (to simplily things). We don't develop this front part of the brain fully till our early 20s which explains why teenagers do dumb things, because they haven't fully developed the logic part. This also explains, for example why for some people, it takes losing their best friend in a drunk driver accident for them to change the way they act. As traders we may "know" something, but until we can turn that logic int a memory we may not change.

[Rande Howell 10]

Thanks Rande. Great post. This 'validation' issue is part and parcel of why I bang on and on at

http://www.traderslaboratory.com/forums/f37/edge-first-integration-first-both-first-8410.html

 

PS just an aside into humans...

I stay amazed at how low awareness of this is with traders... even with those who assert how 'independent' they are...

The one's for who this has never been an issue are the ones mostly likely to discount it ...

On another hand, many ostensibly normal ppl are so deeply 'in', you could actively confront them with it and they still wouldn't immediately, if ever, come into any awareness of their external validation orientations

 

I agree. Just flies past them like ships in the night. We are all born into historical narratives that our brain adapts us to. We internalize them to the point that the narratives have us -- we do not have the narrative. That's simply the biology of it all. And we can stay there in these limitations from generation to generation.

 

Mindfulness is a way of waking up from the prison of this comfort zone. Trading gives us a slew of opportunties to wake up from the feaar-bsed trance that blinds us to a greater expression of living. Humans, especially traders, are in a unique position to wake up from this entrancement. There is a joy beyond comparison in being witness to a person's awakening from his history and into the light of who he can be. There a real cosmic sense of humor to all this -- that trading (of all things) would be such an excellent path to self discovery.

 

Rande Howell

[Rande Howell 10]

Rande, I think a lot of it has to do with where we are drawing knowledge from in the brain. We pull memories from the back and logic from the front (to simplily things). We don't develop this front part of the brain fully till our early 20s which explains why teenagers do dumb things, because they haven't fully developed the logic part. This also explains, for example why for some people, it takes losing their best friend in a drunk driver accident for them to change the way they act. As traders we may "know" something, but until we can turn that logic int a memory we may not change.

 

In my clinical practice working with couples, I've come to believe that a woman's brain may mature in the mid twenties (can think abstactly and reflect), but that a male's brain is lucky to hit this same milestone by mid thirties. Just an observation.

 

A memory is not a whole thing. Elements of a memory is actually stored in various locations in the brain. When we retrieve a memory, we are actually "re-membering" the memory. Each element of the memory is reassembled into the current memory you have of an event. And it changes based on emotional state. That's why eye witness accounts are not of very much value in court -- they change too much.

 

I actually use this process in building memory that is associated in one domain that is emotionally laden with discipline and impartialilty to the domain of the mindset of the trader in a trade. Once the memory is built, stable, and enriched -- it can be called up into awareness to create a state of mind. It's actually more complicated than the way I describe here.

 

For me, it is not so much that a memory exists; it is what observer (within you) is calling up the memory for interpretation. This is what reassemblies the memory into whatever form it takes. And, yes, you're right. When the trader wakes up to this, memory can become a powerful catalyst for their trading.

 

Rande Howell

[Rainmaker626 10]

I dont know if this helps or even makes sense to anyone besides myself.. The way I deal with fear is similar to how I deal with stress.. with stress, I usually identify what the stressor is and why exactly it's a stressor.. i.e. My boss is about to enter my office.. Why does that make my heart skip a few beats and has me worried? Come to think of it, it's because he/she has the power to evaluate my performance which can affect my promotion or he/she has the power to maybe even fire me... Once I make up my mind that I dont care if I lose my job and that I will do my performance, while the chip fall where they may... My boss walking into my office is not a stressor anymore.. My limbic system has disassociated fear from my a person's decision to walk into my office.. I think my method is akin to taking away the fear and worry from a particular action by accepting that if the unthinkable happens, I'm ready to deal with it..

 

With trading, my only fear is Losing Money.. The way I deal with this fear is accepting that losing money is part of the process.. That it's simply a matter of you lose some and win some.. Where the goal is that you win more than you lose.. And taking away what losing money is associated with.. i.e. That it can affect your ability to provide for self and family...

 

What I do is make sure that I'm properly funded as opposed to being under funded.. That way I know I dont have to take crazy long-shot risks.. Also, I make sure to use trading as my secondary source of income as opposed to the primary source..

 

 

I know I am not good with the intellectual description of things.. But what I practice seems to work for me in that it takes away my fears.. There's not that deep anxiety and panic when a trade initially goes against you... Nor are you frozen when it comes time to pull the trigger and the back of your brain has that memory of a previous lost, which can cause u to hesitate and not enter a winning trade...

[Tradewinds 12]

Sorry but i don't understand tradewinds how do you mean for "out of the comfort zone"why you want add more problem,?

 

Well, I don't want to add more discomfort or pain, but . . . . . "No Pain, No Gain" as the saying goes. There is pain that comes from healing, and pain that comes from injury. Two different types of pain.

 

An analogy would be when you have a knot in a muscle and the knot needs to be massaged with a lot of pressure to get it to loosen up. It's very painful, but it needs to be done to get the knot out of the muscle.

[TimRacette 11]

Rande that's awesome stuff thanks so much for sharing. Have you read/listened to any of Malcolm Gladwell's books? His book Blink comes to mind, there is some research in there from some interesting clinical scientists that's fascinating.

[Tradewinds 12]

The way I deal with this fear is accepting that losing money is part of the process..

 

I continued this discussion at thread:

 

http://www.traderslaboratory.com/forums/f18/fear-greed-9058.html

[Rande Howell 10]

Rande that's awesome stuff thanks so much for sharing. Have you read/listened to any of Malcolm Gladwell's books? His book Blink comes to mind, there is some research in there from some interesting clinical scientists that's fascinating.

 

Of Gladwell's work I prefer "The Tipping Point". That one really helped me. Dan Brown takes the theory behind Blink and actually shows how it applies in marketing and advertising. He uses the notion of facial encoding to get at the most primal motivations for audiences. He video tapes faces during interviews and slows them down. He is able to get at micro experessions of emotion and meaning (not seen by the conscous eye -- 1/25 of a second or less). This cuts through neo-cortical thinkng and gets to the limbic meaning. One of the notions he uses, that really applies to trading, is called "desire to acquire". As it applies to trading, you can ask yourself this question and recognize that most likely your first answer is simply an explanation that is not rooted in primal meaning. The brain does that. Once you get past that level, you're back at desiring to acquire a fix (how ever temporary) to beliefs of inadequacy, mattering, and worthiness. Scary technology to be in the hands of marketers and advertiers (of which I used to be one). But it can be harnessed for psychological development also.

 

Rande Howell