Psychology Ready?

[Rande Howell 10]

http://goarticles.com/article/Trade-Stock-Successfully-with-Emotional-Detachment/4674012/

 

Trading is very much emotion than what one chose to believe...

 

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

[johnw 10]

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

 

 

Hi Rande,

 

Are you saying that a Trader should be aware of their emotional state when they make the decision to pull the trigger.

[zdo 20]

Rande,

re "80% of any decision made is based on implicit emotion rather than explicit emotion "

If you have time, please expand or provide references for how you are using the words implicit and explicit. Is it just code for emotions un conscious of and emotions conscious of ? etc. Thx.

[Rande Howell 10]

Hi Rande,

 

Are you saying that a Trader should be aware of their emotional state when they make the decision to pull the trigger.

 

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

[johnw 10]

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

 

Hi Rande,

 

For the most part you and I see the emotional component in a similar vein ...

I say "similar" because you are coming from the Professional Observers corner [ which offers you impartiality ] and I am in the deep end as a Player.

 

That we agree, offers a greater depth to the content imho.

 

However, I struggle with this statement from you, and perhaps I am not reading it as you intended.

 

"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"

 

In my experience, there is a place of detachment that a Player can reach.

 

As corny as it may sound, the Player is in balance and aware of nothing other than what he/she is doing ... in this case it is placing and managing an intraday trade... there is no situational awareness of feelings, muscular aches and pains, temperatures etc .... there is only the task in hand and in this case the Player and the Price are seamless.

 

How does a Player reach this place.

It takes a serious commitment from the mind in order to begin the journey that reaches all the feelings.

But somewhere along the way the struggle of the commitment turns into a desire or an interest to see just how far the Player can take them self ... eventually the struggle evolves into habit as the conscious mind is melted into the same pot.

 

Does the Player give up anything along the way ... well obviously TV, the News, Religion, Politics

and "expert opinion" family and friends will never be the same again as their long lost third eye rebuilds itself from the battering it took in early life.

 

What the Player picks up along the way is to the power of ten compared to what is surrendered.

[Rande Howell 10]

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

[johnw 10]

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

 

 

Thanks Rande,

 

Adding more depth and words to the conversation adds clarity.

[jaysmith124 10]

Trade 7

 

100 shares .15 loss

 

I took a break not being able to focus. I will attempt to trade everyday.

This trade was counter to the trend. I noticed that my emotions are in check. The intensity of what I feel has mellowed out.

 

I am looking forward to tomorrow.

[Rande Howell 10]

Trade 7

 

100 shares .15 loss

 

I took a break not being able to focus. I will attempt to trade everyday.

This trade was counter to the trend. I noticed that my emotions are in check. The intensity of what I feel has mellowed out.

 

I am looking forward to tomorrow.

 

 

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

[jaysmith124 10]

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

 

I meant that my emotions have been mitigated. I still have to deal with what is there. I have started writing down current self talk, and replacing it with more accurate self talk that does not include fear, but reasoned optimism. I have only been through this once last weekend, and I will go through the exercise again this evening. I believe this has effectuated changing my state. (Mindset) But, it takes daily practice.

 

I will be trying to read and re read everyday. Accepting the current fear based emotions, and replacing them with confidence. Eventually, I should be ruminating a new mindset throughout the day without reading it first.

 

Today, I experienced frustration, as well, after I was letting trades go by.

 

I know my fear based emotions are from a culmination of past, and future, thoughts/beliefs. Understanding that mindfulness is about staying in the present, I believe, and is putting me on the right track to trading with impartiality.

Edited June 7, 2011 by jaysmith124