So, I found your website and purchased Access Your Psychological Capital, which then led me to devour books on emotional intelligence, mindfulness, neuroscience, and sports psychology. During this time of self-reflection, I combined my life experiences, education (Masters of Divinity in Biblical Theology), your workshop and group meetings, and many other resources, and applied them to arrive at a greater self-awareness. I’d like to share the journey of becoming acquainted with my echo with you—a journey that has led me to greater emotional understanding, less impulse trades, and no more door punching.

Your E-Learning Course introduced me to another stage of trading development: what is going on inside of me. For the first time I took responsibility for what was happening while I was trading. I realized who the enemy was—me. Why do I do the things I do? I’m a mess. Where do I start according to what Denise teaches?

I began by focusing on my body before, during, and after a trade with no self-judgment. Before getting in a trade I felt anxious, sat on the edge of my chair, and breathed heavily. After I finally pulled the trigger, I was in the trade at a less than ideal location and trying desperately to seek new information to reassess the trade. During the trade, my chest felt heavy, I clenched my thumbs, making a fist, and prayed I wouldn’t get stopped out. At this point I had no idea what other traders were doing—I was completely consumed with myself. Then, sure enough, I would get stopped out on a pull back or exit after only a couple of ticks, afraid that it would come back and I would lose what little profit I had. Even two ticks profit felt like a loss to me especially after watching it march on without me, reminding me with every tick that I just lost an opportunity. . . DAMN IT, SHIT, I lost!

I was so angry that I got upset at a simple question from my wife or the noises my kids were making, blaming them for my bad trade—as if I had lost because they were distracting me. Well, after experiencing this a number of times, I knew I had issues. It was not my wife’s or my kids’ fault, and after apologizing to them, I admitted to myself that I was afraid to lose, and didn’t want my family to think I was a failure.

But I noticed my fear of failure was just as strong when I risked only $50 as when I risked $200. So I asked myself: “What do I feel and believe about myself when facing risk?” I turned my focus from my physical response to my emotional response, for emotions reveal my true beliefs about who I am and how I relate to the world around me and, in particular, how I relate to the market.

I realized that when facing risk, I feel fear, and my earliest memory of fear happened at four years old. I was sitting on my Mom’s lap in the front seat of the car while my Dad clutched the steering wheel and peered through windshield wipers that were frantically trying to clear the window of the indefatigable rain. Lighting bolts were everywhere. Thunder crashed around us. I cried and held my blankie tight. My Dad yelled some disparaging remark about my being a baby. I felt embarrassed and ashamed.

Sitting with this memory and the emotions of it, I realize I have heretofore associated fear with being a baby and losing the affection of my dad. Looking back, I see that whenever I hurt physically or emotionally, I tried to prove to myself that I wasn’t a “baby” by rebelling against my instinct to cry and instead doing dare-devilish stunts on four-wheelers and snowmobiles, tight narrowly escaping paralysis and even death a number of times. I now know I was trying to prove to myself and others that I was fearless. Early in my trading days, I took some crazy, risky trades. I won a few and lost a bunch. It didn’t take long before the losing trades hurt, and I knew I couldn’t control the market like a motor vehicle. In front of my computer screen, I started to experience real fear, and I was angry because it reminded me of feeling like a baby, as if the market was my dad saying: “What’s wrong? Are you scared? You must be a baby!” My response didn’t help; I’d make another impulse trade, another trade out of regret and another loss. Another failed attempt to prove, to my father or myself or whomever, I’m somebody.

I realized then that part of my echo was, “I can’t have what I want because I’m not as talented or strong as everyone else”—I’m just a scared baby. I was afraid of screwing up a trade because losing meant I wasn’t strong enough or talented enough to deserve acceptance or love from those closest to me. When trading, I felt like a timid kid playing against confident giants, so I had a tendency to get out after only a couple ticks because I felt as though it wouldn’t work out. I was sure I wasn’t going to get what I want, so I better get out NOW.

This feeling of “I can’t have what I want,” was further reinforced by 1) my parents pessimistic view of adversity in life—you will never win, everyone else will come out on top, because they are stronger/more talented than you are—and 2) my parents frequently complimented other kids who were talented musically or academically, yet rarely paid me compliments about my talent in sports. Since I felt my parents were always comparing me with others and there was an absence of affirmation towards me, I felt that I had to perform in order for them to be proud of me.

I think my fear of not gaining the affirmation of my parents was most strongly imprinted on my mind when I quit taking piano lessons in 9th grade. I hated piano and, as my wife will testify, I am basically tone deaf. Yet, because the children of my mom’s friends were talented musicians, I HAD to take piano. The day I told her “I quit,” my mom blew up, cried and then tried to convince me that playing piano was “good for me,” regardless of the fact that I hated it and wanted to put my time into athletics. Her reaction communicated to me that in order to gain her acceptance and love, I had to do what SHE wanted me to do. I was only acceptable if I played piano, which was pure misery for me; therefore, I believed I couldn’t have what I wanted—success, love and acceptance in something that I wanted.

From that moment on, I feared that pursing things I enjoyed meant risking my parents’ acceptance and approval. So, I put pressure on myself to perform perfectly in basketball and football, thinking that maybe then they would accept and love me for me. I thought: “if they see how good I am at sports, piano [or whatever else] won’t matter so much.” Then when my performance wasn’t perfect, I blamed myself for BOTH my poor performance AND the fact that my parents didn’t love or accept me. This line of thinking led me to believe that their lack of love and acceptance was “my fault.”

Interestingly enough, any time I pursued something, my parents said, “Well, if it doesn’t work out. . . . ” As a kid, I interpreted that statement to mean my pursuit will fail because I’m not good enough, which will result in failing to gain my parents’ acceptance. Consequently, the fact that they don’t accept me is MY fault. . . . If only I’d just worked a little bit harder. . . .

So, when I trade, my self-worth is dependent on whether I make it or not. When I take a bad trade, I realize my full echo is, “I can’t have what I want because I’m not as talented or strong as all the other traders out there, and, the fact that I’m not as talented and strong is ALL MY FAULT!” If I don’t make it, I risk losing the love and acceptance of those I care about because I project my parents’ line of thinking onto them. The greatest revelation came one day, when after three bad trades, I just started saying, “I’m sorry, I’m sorry.” At first, I had no idea to whom I was apologizing. I was apologizing for having failed and disappointed everyone important to me. I was telling them that I was sorry for not being “good enough” and, ultimately for not making it as a trader. That is a reality I dread.

After walking, wallowing, and writing, I am finally able to name my hindering emotions: fear that I can’t have what I want because I’m “a baby,” anger and regret over the fact that I’m not “good enough,” and despair over the fact that this is all my fault. Now that I’ve named my emotions and beliefs, I’m free to channel my psychological capital towards what other traders are doing by using market profile and order flow. I have finally given myself permission to succeed and I am confident when I trade.

Ok

1. Markets are only human

2. The numbers are only a clue

3. The brain knows it

4. The brain believes it is in the jungle fighting for survival

5. The brain knows how to survive and uses all kinds of mechanisms to do so

6. It’s language is FEELINGS. Period.

7. Consciousness is feelings. Perception is feelings.

8. This makes the ultimate market data one of feelings – yours and theirs. Everything else is a proxy.

9. Because it is the jungle, it is a fight for survival.

10. This makes it emotionally intense.

11. Emotions have good info and can also be fueled by memories projecting an expectation.

12. The ultimate goal is to tell the difference.

13. The only way to do that is to get as good at reading your own feelings as you are at the charts.

14. It ought to be easier actually – as you are in total control.

15. It feels harder.

16. It won’t be if you put in just 50% of the effort.

17. You STILL need a game plan.

18. But it is the skill – SKILL – in executing it that will determine the winners.

19. Skill is different than robotics.

In pursuit of becoming more consistently profitable, typically traders will either tweak their system (Oh if I just look at the market this way) or read a book. Trader faves when it comes to books can run the gamut from sports psychology to the current Deep Survival. Nobly, everyone is trying to understand the market and their reaction to it. In fact, many traders work harder at trading than they have ever worked at anything.

Nevertheless, there are a couple of secrets lurking out there that aren’t well publicized…

#1) The first impulse trade you take is meaningless. In other words, you can totally #&$*)@ -up, ONCE and it means almost nothing to your end of the month.

#2) It is what you do next that makes all the difference.

#3) The most profitable action you can next take is to resolve the immediate emotional/feeling dilemma. If you made a really stupid mistake, you are in BIKB – or but I know better…. and you are likely to punish yourself with more losing trades. You are mad at yourself without putting that feeling into words, you will act it out but taking it out in your account.

#4) The least profitable thing you can do at this point is to intellectualize or intentionally try to control your emotions or feelings.

How can this be? Doesn’t every book on the shelf say “control the emotion” and take ALL your signals. Yes I think almost every book does. (I don’t read them anymore but this is what people tell me).

See here is the real secret, no one can say for sure how we make a risk decision (despite books like How We Decide) but the contours appear to look something like this. If it isn’t LITERALLY mathematically precise – if you can’t solve for X, then our brains use context, senses, and feelings to evaluate what action should be taken. No one can tell you exactly how the brain uses context, senses, and feelings to assess, but the experimental evidence is mounting to the point that top neuro-researchers are willing to say “It is not enough to know what should be done, one must also feel it.” (Camerer, et. al. Journal Economic Literature)

If you turn that around it means that every single thing you do has a feeling associated with it.

Where does this leave us in relationship to consistently good trading decisions? The simple (but not easy) answer is all you need to do is understand the feelings - preferably both macro level (what you expect of yourself and echoes from your past) and micro or in the moment reactions to the result of a trade or price movement.

Every time you truly understand what you feel in the moment – you will make a better trading decision. The feelings may be ugly, they most likely are at least a bit uncomfortable but if you research and analyze them, well… as the Men’s Wearhouse hawker on local NYC TV says, “I guarantee it, you are going to like how you look“.

PS You will also automaticaly know when you feel clear and calm enough to venture back into the jungle of uncertainty that is trading.

http://traderpsyches.com/selfdirected.php

A more complete description and the download of an introduction is available here.

Merci beaucoup for inquiring – DKS