The Invisable Hand That LImits Your Trading

Rande Howell

Member
51 7
"There seems to be an invisible hand that is guiding my trading, and I don't seem to have much say-so in the matter," a trader laments to me. She continues, "I do not understand why I keep on doing the things that I do, when I know what I am supposed to do. But it is not what I'm supposed to do that I do. Rather it is what I'm NOT supposed to be doing that I do.

I hold on to trades too long in both directions. I know what my rules say about my stops and my targets. But I'll be there one second, then my evil twin takes over my mind. And I do things that I know are not good trading. It's almost like I get possessed, and when I wake up from the trance, all I can do is kick myself for not following my plan.

What's going on? Don't lecture me about discipline and putting my emotions down at the door of my trading room. I've heard all that, but this invisible hand seems to creep in and all the discipline I have in other areas of my life seems to vanish in the mist."

The Elephant in the Living Room

Have you ever experienced what this trader is describing? She knows how to trade. She has a deep background in finance and accounting. She doesn't experience debilitating fear in her trading. And she is a moderately successful trader. She makes money. But she recognizes that she is hitting an invisible glass ceiling that is stopping her from moving to the next level. And she can't see what she can't see. She suspects that there is an elephant in her living room, that if she only had the eyes to see, she would be able to see what is limiting her and her trading.

Trading, History, Biology, and Mind

Taking a step beyond quick fix, short term, solutions to self limiting patterns is the first step. Understanding emotion as far more than feelings is the head knowledge that you will need to cultivate. Fundamentally emotion is about the way the organism you are builds predictable responses to the uncertainty of adapting to the circumstances of life.

The brain is what directs this process of adaptation and it is emotion driven. Feeling is merely the subjective experience of an emotion. It is like seeing an iceberg -- the vast majority of it is below the surface. Feeling is the tip of the iceberg. If you remain ignorant of the power of emotion, then you put yourself in the same situation that the Titanic found itself.

It is the genesis and stability of neurally wired patterns of responding to environmental cues that is at the crux of understanding (and managing) emotion. In essence, your brain is a pattern-making machine that is mandated to avoid threat. And your brain cannot separate uncertainty, worry, and fear from one another. This is exactly what the trader quoted above is stuck in.

Now, let's add one more element to our trader's dilemma of her invisible hand guiding her trading. She's right. She was born (actually her brain) into a soup of beliefs, biases, and perceptions (called her family circumstance) and her brain incorporated these "stories" into a narrative that became "her". This is the environment into which her brain adapted her. And it happened long before she could think or question the assumptions that organized the way she perceived her environment. This became her "invisible hand".

In her world, she organized herself into a narrative that avoided uncertainty. It was what her family did and "what monkey see, monkey do". The assumptions became her beliefs. Until she got into trading, there was no reason to question these assumptions turned beliefs in her brain/mind. Life was pretty good.

Her trading has forced her to bump up against her comfort zone (known as a perceptual map to the neuro-science minded). Now the internal guidance system that was so successful in producing adaptive survival is no longer functioning effectively in this new environment called trading where working with uncertainty is a required operational skill.

Now her job is to de-construct the old money/risk narrative that she was born into and adapted to (her invisible hand). And she will need to construct a new narrative where the brain adapts to uncertainty as an element of her environment to be embraced. And mastered.

Biology Meets Mind

Our family histories get embedded into our belief systems in the organic substrate called your brain. Your job as a trader is to become the designer of the beliefs that drive your trading. Otherwise you will stay stuck in the self limiting beliefs that your brain adapted you to -- designed for a different environment and a different time. The Invisible Hand will remain a force that drives your trading until you develop the mindfulness and the skills to "re-develop" the narrative that you confuse with "your thoughts".

Those thoughts are not yours. They own you. They are the histories of family narratives getting wired into your brain. They become your blinders. You see only what they allow you to see. Breaking out of this invisible prison opens you to see a new kind of freedom. A freedom to " become". A freedom to become the beliefs that drive peak performance trading.

With this in mind, what were the stories and narratives about uncertainty, risk, worry, and fear that you were born into? How did they shape your world? And how are these long hidden narratives embedded in the neural pathways of your brain impacting your trading today?

Rande Howell
 

kathreeds

Newbie
3 1
I hold on to trades too long in both directions. I know what my rules say about my stops and my targets. But I'll be there one second, then my evil twin takes over my mind. And I do things that I know are not good trading. It's almost like I get possessed, and when I wake up from the trance, all I can do is kick myself for not following my plan.


Rande Howell
This potentially is a problem because there will be many occasions while trading, your entrance does not head in the anticipated direction. The time tested rule of ‘cutting your losses’ would be most applicable
 

Rande Howell

Member
51 7
This potentially is a problem because there will be many occasions while trading, your entrance does not head in the anticipated direction. The time tested rule of ‘cutting your losses’ would be most applicable
If they were able to remain disciplined and impartial under fire, few traders with proper methodology training would have problems. The problem in the midst of uncertainty and risk, fear takes over -- and they can no longer follow their rules, even if it is time honored. It is the capacity to emotionally regulate the brain/emotion/mind that is missing.

Rande Howell
 
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Splitlink

Legendary member
10,850 1,233
This potentially is a problem because there will be many occasions while trading, your entrance does not head in the anticipated direction. The time tested rule of ‘cutting your losses’ would be most applicable
Maybe you could plan ahead and place an order to do the work?
 

DashRiprock

Experienced member
1,650 482
Has anyone ever seen Randy Howell and Joe Ross in the same room at the same time?
 

Rande Howell

Member
51 7
Has anyone ever seen Randy Howell and Joe Ross in the same room at the same time?
I just finished speaking at the Dallas Traders Expo, so if he were there -- then you might have seen us in the same room. I certainly did not see his name mentioned as a presenter though. And I teach psychology, not methodology.

Rande Howell
 

DashRiprock

Experienced member
1,650 482
I just finished speaking at the Dallas Traders Expo, so if he were there -- then you might have seen us in the same room. I certainly did not see his name mentioned as a presenter though. And I teach psychology, not methodology.

Rande Howell
You're right Rande... if he (Joe Ross) had been in the same room as you while you were speaking at the expo, and someone had seen it, then said someone would have seen you both in teh same room at the same time.

:rolleyes:
 

Rande Howell

Member
51 7
You're right Rande... if he (Joe Ross) had been in the same room as you while you were speaking at the expo, and someone had seen it, then said someone would have seen you both in teh same room at the same time.

:rolleyes:
DashRiprock

A dashing comment. Have no idea of your intent. Simply went right past me.

Rande Howell
 

StupidCow

Active member
196 0
The real problem is that most traders have not learned how to mind meld with the market. They have not yet learned how to glare at charts and figure out which way the wind is blowing.

Look, if the price is going up, then its going up, what more do you need to know. Of the price is going down, then its going down - that's all there is to it. Just follow price because the trend is always going to be there. The trend is your best friend in all the world. See prices making higher highs, the price is going up - what more do you need to know. See prices making lower lows, then price is going down - jump in and make some money.

I don't know why people don't spend more time glaring all day long at their charts. Instead, they spend all that time mentally masturbating over the next great indicator, as if somehow indicators had anything whatsoever to do with trading success. Everybody knows, especially the Big Boys don't use indicators. The Big Boys use price action to make their decisions. They just sit and glare at their charts all day and wait for price to make some kind of action. When that action happens, well the Big Boys know what to do. That's why they are Big, and we are so small.

All this X over T minus Y with the regression factor in permanent stasis along the arctic circular region of the lateral axis oblique angle stuff, is for those who have been duped and blindsided by the lure of the Holy Grail. Study price action. That is, when price make an action, then that's your signal to Buy, or to Sell - depending on the price action.

No need to over complicate things - geeepers. Sorry, for going ballistic but I keep reading about people who suffer at the hand of technology, looking for that next big indicator savior that will rescue their woefully inadequate trading and carry them to the land flowing with milk and bid prices that are always in agreement with their best wishes and caviar dreams. I am so sick of it. Just follow the trend. You really don't need to do anything else and I'm living proof of that fact.

The trend will never ever hurt you in the long run. Indicators are for those with caviar dreams and no real plan on how to get there from here. Just give me some good old fashion support and resistance lines and some pivot points and a single moving average and I'm good to go. I don't need all that other crazy nonsense. I'll just Martingale my way to where I need to be financially in life.

Heck, just some good old fashion Martingale and some S&R lines, and I'm like a pig in slop. Just as happy as I can be.


------------------
A Truly,
Stupid Cow
 

wolf7050

Junior member
34 0
Hmm...sounds as if Rande and Joe could be one in the same....
 

wolf7050

Junior member
34 0
The real problem is that most traders have not learned how to mind meld with the market. They have not yet learned how to glare at charts and figure out which way the wind is blowing.

Look, if the price is going up, then its going up, what more do you need to know. Of the price is going down, then its going down - that's all there is to it. Just follow price because the trend is always going to be there. The trend is your best friend in all the world. See prices making higher highs, the price is going up - what more do you need to know. See prices making lower lows, then price is going down - jump in and make some money.

I don't know why people don't spend more time glaring all day long at their charts. Instead, they spend all that time mentally masturbating over the next great indicator, as if somehow indicators had anything whatsoever to do with trading success. Everybody knows, especially the Big Boys don't use indicators. The Big Boys use price action to make their decisions. They just sit and glare at their charts all day and wait for price to make some kind of action. When that action happens, well the Big Boys know what to do. That's why they are Big, and we are so small.

All this X over T minus Y with the regression factor in permanent stasis along the arctic circular region of the lateral axis oblique angle stuff, is for those who have been duped and blindsided by the lure of the Holy Grail. Study price action. That is, when price make an action, then that's your signal to Buy, or to Sell - depending on the price action.

No need to over complicate things - geeepers. Sorry, for going ballistic but I keep reading about people who suffer at the hand of technology, looking for that next big indicator savior that will rescue their woefully inadequate trading and carry them to the land flowing with milk and bid prices that are always in agreement with their best wishes and caviar dreams. I am so sick of it. Just follow the trend. You really don't need to do anything else and I'm living proof of that fact.

The trend will never ever hurt you in the long run. Indicators are for those with caviar dreams and no real plan on how to get there from here. Just give me some good old fashion support and resistance lines and some pivot points and a single moving average and I'm good to go. I don't need all that other crazy nonsense. I'll just Martingale my way to where I need to be financially in life.

Heck, just some good old fashion Martingale and some S&R lines, and I'm like a pig in slop. Just as happy as I can be.


------------------
A Truly,
Stupid Cow
Even though I would never use a martingale system of money-management. I couldn't agree more. Price action is where it's at...Your a brilliant woman...NOT!! a Stupid Cow..

regards and good trading

wolf7050
(y)
 

Rande Howell

Member
51 7
Rande, you make me randy.

And that's not a good thing for you.

Seriously, you're Joe, aren't you?
You British... Actually I was named after my father's best friend who died flying a B-17 from GB into Germany during WW11. Ironic that I would be named after a guy dying while flying trying to save GB. But there again, what's in a name?

Rande Howell
 

market_bull

Active member
188 6
The real problem is that most traders have not learned how to mind meld with the market. They have not yet learned how to glare at charts and figure out which way the wind is blowing.

Look, if the price is going up, then its going up, what more do you need to know. Of the price is going down, then its going down - that's all there is to it. Just follow price because the trend is always going to be there. The trend is your best friend in all the world. See prices making higher highs, the price is going up - what more do you need to know. See prices making lower lows, then price is going down - jump in and make some money.

I don't know why people don't spend more time glaring all day long at their charts. Instead, they spend all that time mentally masturbating over the next great indicator, as if somehow indicators had anything whatsoever to do with trading success. Everybody knows, especially the Big Boys don't use indicators. The Big Boys use price action to make their decisions. They just sit and glare at their charts all day and wait for price to make some kind of action. When that action happens, well the Big Boys know what to do. That's why they are Big, and we are so small.

All this X over T minus Y with the regression factor in permanent stasis along the arctic circular region of the lateral axis oblique angle stuff, is for those who have been duped and blindsided by the lure of the Holy Grail. Study price action. That is, when price make an action, then that's your signal to Buy, or to Sell - depending on the price action.

No need to over complicate things - geeepers. Sorry, for going ballistic but I keep reading about people who suffer at the hand of technology, looking for that next big indicator savior that will rescue their woefully inadequate trading and carry them to the land flowing with milk and bid prices that are always in agreement with their best wishes and caviar dreams. I am so sick of it. Just follow the trend. You really don't need to do anything else and I'm living proof of that fact.

The trend will never ever hurt you in the long run. Indicators are for those with caviar dreams and no real plan on how to get there from here. Just give me some good old fashion support and resistance lines and some pivot points and a single moving average and I'm good to go. I don't need all that other crazy nonsense. I'll just Martingale my way to where I need to be financially in life.

Heck, just some good old fashion Martingale and some S&R lines, and I'm like a pig in slop. Just as happy as I can be.


------------------
A Truly,
Stupid Cow
This made a whole butt-load of sense to me. Thanks for this post! (y)
 
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