Forging a Disciplined, Patient Mind for the Uncertainties of Trading

This is a discussion on Forging a Disciplined, Patient Mind for the Uncertainties of Trading within the Psychology, Risk & Money Management forums, part of the Methods category; Originally Posted by foroom lluzers Thank you for another very informative article. What is the process in the mind , ...

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Old Jun 15, 2017, 7:01pm   #9
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Rande Howell started this thread
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Originally Posted by foroom lluzers View Post
Thank you for another very informative article.

What is the process in the mind , that makes you want to control the market , when market becomes chaotic?
Your brain was built by evolution to control environment and outcome. They are primitive drives that became wired into us as traits. So, no surprise, they show up in trading. Traders notoriously try to control what is going to happen in the markets (the environment) as a complication of this survival strategy. Winning, as most understand it is trading, is making money on a trade. This is trying to control outcome (another primitive, and successful, survival drive) showing up in trading where the rules of the environment simply don't favor it. Traders need to start questioning these drives -- moving from trying to control outcome to controlling their process.
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Old Jun 15, 2017, 11:11pm   #10
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Hi Rande Howell,

I appreciate your posts and I like your attitudes as laid out in post 6 of this thread.

I wonder if you would be kind enough to share if you have any ideas on how I could work on my problem.

I am a trend trader of the Turtle ilk, acting on end of day data and just following the trend. I often find myself quite profitable.

My problem is that I find the money comes quiet easily and I feel I can do anything. Also I believe because of this I do not appreciate that winning it was a task and an easy come easy go attitude kicks in. I feel that money gained “is the markets money, so let’s use it in the market”. This feeling is enhanced by the compound growth effect of trading.

As the account grows I take greater and greater risks out of proportion with the growth in my account. When this works out, which it often does (until it doesn’t) it just encourages my bad behaviour. So I start to overtrade and trade with bigger size. In a bad circle, which inevitably will not end well. The greater my account grows the greater the problem becomes. This manifests quite quite subtly in taking trades prematurely, going slightly over my risk per trade and being over correlated (which is particularly tempting for a trend follower)

I hope you have some ideas on how I can work on this.

Kind Regards

Jason

Last edited by Jason101; Jun 16, 2017 at 8:44am.
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Old Jun 16, 2017, 7:05am   #11
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Rande

I have been curious about the amygdala , if it is over responsive/reactive , it is not regulated or controlled.I found it tends to overreact in positive situations by overexposure based on positive sentiment ,it subconsciously(like human autopilot) takes over and place larger trades.
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Old Jun 16, 2017, 7:27am   #12
 
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Rande

I have been curious about the amygdala , if it is over responsive/reactive , it is not regulated or controlled.I found it tends to overreact in positive situations by overexposure based on positive sentiment ,it subconsciously(like human autopilot) takes over and place larger trades.
Ok I understand that our psyche is slave to the physical brain (we can't choose to stop breathing) and the amygdala is part of the primal brain. But if your so convinced that it helps trading have you considered taking drugs to dull the effect such as Propranolol or even Gamma knife surgery to remove it. It has the added side effect of increasing empathy for others, which I believe would benefit everyone.

So you talk the talk but do you walk the walk, are you willing to DO SOMETHING about a primeval part of the brain that you have no control over.
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Old Jun 16, 2017, 7:41am   #13
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Ok I understand that our psyche is slave to the physical brain (we can't choose to stop breathing) and the amygdala is part of the primal brain. But if your so convinced that it helps trading have you considered taking drugs to dull the effect such as Propranolol or even Gamma knife surgery to remove it. It has the added side effect of increasing empathy for others, which I believe would benefit everyone.

So you talk the talk but do you walk the walk, are you willing to DO SOMETHING about a primeval part of the brain that you have no control over.
My emotional brain is faster than my rational brain ,it takes over faster than I can control anything. I am trying to let it perform effectively ,for the purpose for which it is designed , rather than mess with it.Messing with it can make things worse for some ,unless there are scientific studies to prove it.

I rarely open my platform unless I have to , too many tempting trades when I open my fridge of goodies.Maybe the answer lies in avoiding the zone , the alternative is to evade your hijackings , but which is better?
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Old Jun 16, 2017, 7:52am   #14
 
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My emotional brain is faster than my rational brain ,it takes over faster than I can control anything. I am trying to let it perform effectively ,for the purpose for which it is designed , rather than mess with it.Messing with it can make things worse for some ,unless there are scientific studies to prove it.

I rarely open my platform unless I have to , too many tempting trades when I open my fridge of goodies.Maybe the answer lies in avoiding the zone , the alternative is to evade your hijackings , but which is better?
But you ARE trying to mess with it. It is there doing a perfectly good job and you are trying to suppress or remove its response to stimulus.
You are trying to stop millions of years of evolution by using your 'conscious brain' which is considerably less developed and as you say yourself 'slower' than your amygdala. Do you see the futility of the task you have set yourself. You cannot succeed.
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Old Jun 16, 2017, 1:56pm   #15
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Rande Howell started this thread
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Originally Posted by Jason101 View Post
Hi Rande Howell,

I appreciate your posts and I like your attitudes as laid out in post 6 of this thread.

I wonder if you would be kind enough to share if you have any ideas on how I could work on my problem.

I am a trend trader of the Turtle ilk, acting on end of day data and just following the trend. I often find myself quite profitable.

My problem is that I find the money comes quiet easily and I feel I can do anything. Also I believe because of this I do not appreciate that winning it was a task and an easy come easy go attitude kicks in. I feel that money gained “is the markets money, so let’s use it in the market”. This feeling is enhanced by the compound growth effect of trading.

As the account grows I take greater and greater risks out of proportion with the growth in my account. When this works out, which it often does (until it doesn’t) it just encourages my bad behaviour. So I start to overtrade and trade with bigger size. In a bad circle, which inevitably will not end well. The greater my account grows the greater the problem becomes. This manifests quite quite subtly in taking trades prematurely, going slightly over my risk per trade and being over correlated (which is particularly tempting for a trend follower)

I hope you have some ideas on how I can work on this.

Kind Regards

Jason
Jason

You would be wise to examine the beliefs that lie behind the initial "feeling good" at winning that are precursor to the self sabotaging behaviors that grow as your account grows -- until it doesn't. Fundamentally self-sabotage (that's what I calling the pattern you describe, which may not be the way you understand it) is rooted in 4 self-limiting beliefs. A sense of inadequacy, a sense of not mattering, a sense of being unworthy, or powerlessness. I suspect the worthiness box, based on the way you describe your pattern (you build things up only to burn them down to a level that is familiar pattern to you). I have seen this pattern many times over the years. It is particularly common as traders gain competence and master the initial skills needed to produce a certain level of success. Getting past that would be your next stage in your evolution as a trader.

This is a guess or hypothesis -- not the truth. I don't know you. So I can easily be far off base. But check it out and see if this explanation has validity or not. Let me know.

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Old Jun 16, 2017, 2:06pm   #16
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Originally Posted by foroom lluzers View Post
Rande

I have been curious about the amygdala , if it is over responsive/reactive , it is not regulated or controlled.I found it tends to overreact in positive situations by overexposure based on positive sentiment ,it subconsciously(like human autopilot) takes over and place larger trades.
Technically, the amygdala is an ancient part of the emotional brain that governs responses to threat -- usually fear responses. It also, interestingly enough, is involved in letting down our guards so that pro attachment kinds of behavior can occur. The amygdala (fear response) is governed by the hippocampus -- as interpreter of in incoming information related to past experience embedded into limbic memory. It is the signal from the hippocampus that activates the amygdala.

This "positive sentiment" you speak of is probably what I would call a dopamine fix associated with reward. This is more about the impact euphoria (feeling good) has on perception rather than an amygdala related event. Euphoria, while trading, leads to over trading. Trading is about managing the emotions and meanings of assessments that create the mind that engages uncertainty.

Rande Howell

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