Echoes, Emotional Architectures & Performance Patterns
The arguably most famous and respected trading psychologist on the planet makes a point that we are not and should not be trading for personal development. I respectfully disagree.
Playing the game wherein the object is to take money out of the hands of very many other smart people who are also pouring enormous resources into taking your money may very well be the most difficult endeavor on the planet. How can something that challenging NOT be a journey of personal development? How can playing a game where every nanosecond provides a declaration on your skill and success NOT challenge the ego?
I personally don’t think it is possible to separate the two. And actually I don’t see any reason why one must. After all, isn’t personal development one of the greatest joys in life – to try, to fail, to get better and then learn to succeed… and then learn to succeed MORE?
In any event, this post is really about something else. It is about how we unconsciously create patterns in our trading that reflect our ways of being that we laid down much earlier in life. Yesterday I spoke with someone who trades much better when they are already down money. As we tried to unravel this mystery, we discovered that this person also always did better on college term papers when they left them until the last minute. If they tried to write one in advance, the paper would be mediocre at best. We talked about how that felt then and how it feels now.
And it is in that analysis of those constellations of feelings, that both the trading progress and inseparably, the personal development lies.
We in this day and age still falsely believe that most of what we do as adults we do out of our intellects. In reality, we act out of how we feel. I have said it before and I will say it again, a team of the best neuroeconomists and game theorists in the world (Colin Camerer, Lowenstein & Prelec) says “It is not enough to know what should be done, one must also feel it.”
Inverting that means there is a feeling associated with EVERY action.
Digging deeper one finds that the feelings associated with trading often mirror, reflect or echo feelings we had earlier in life in challenging or stressful situations. The markets tap into our core self-image and ways of being. (“emotional architecture.”) How could they not with their tick by tick assessments?
This doesn’t have to be detrimental to our P&L. If we know it and we learn to be aware of it, we can accomplish two things – make more? money and “personal development.”