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**Successful Day Traders – Emotion And The Traders Mind**

Understanding What’s Happening

Newsletter #1
Successful Day Traders

Successful Day Traders – Emotion And The Traders Mind.  Stop depleting your capital while searching for the Holy Grail that doesn’t exist with indicators, systems or methodologies. Start investing in yourself by learning how to trade successfully while training the mind at the same time. Change yourself mentally to function with a traders mind.

A traders mind is not comparable to the mindset required for any other business. Equating other successful businesses to a successful day traders business requires a little comparative perspective. Many successful non trading businesses for example, were profitable from the owner’s hard work. It’s not unusual for many business owners to work 12 – 16 hour days. .

Possibly they might have the ability to manage and organize work forces as a result of great people skills. Others might be driven by an aggressive alpha personality pushing them to success. Being the best at something or producing the best results/products and outshining the competition could also be a factor. Getting whatever task done to produce profit was in their control. If someone or something in their circle was slacking or equipment was malfunctioning they would find a fix, someone or something could easily be replaced or repaired. Problems that might arise always had a solution because the owners were in control.

Now imagine if the business owner lost that control. Now all of a sudden, they were dealing with the market and things weren’t going as planned. Maybe the business owner turned trader becomes upset and starts feeling disappointment or aggression, but can’t fire anyone, replace something, or give the responsibility to someone else to deal with. Without warning, management skills, hard work, or being the best at something with the best product in the best location becomes meaningless.Successful Day Traders

They quickly realize their prior business skills and previous approaches aren’t applicable in their new trading business. What they might not know is that it’s their mind’s preparation that’s the key. They might be successful in other businesses due to their ability to control their variables, but the trader needs to be in control of his/her own mind, and not dependent on outside elements. Emotional maturity needs to be nurtured and grown.

They need to relinquish and accept loss of control and accept the need to analyze for high probability outcomes. It’s not only the tools they use to trade with, like charts and indicators; it’s also the individuals themselves by preparing mentally. Until the individual is trained internally, the depleted accounts, the losses and inconsistencies will never change. Traders are most times their own worst enemies, simply because they fail to accept the problem as being them. After all, they have run successful businesses before, why should this one be any different? It logically does not make sense to them. They should by all previous standards be successful day traders.

The mind is programmed to protect and survive through evolutionary self-preservation instincts as well as learned programming since early childhood. Unfortunately this has no place in the paradigm used for successful trading. We are pre-programmed to react to circumstances that might work on other emotional and non-emotional events. Unfortunately the criteria relevant in other business applications don’t serve us well in trading.

Emotional reactions aren’t helping us when they are categorized into a “one reaction fits all” stereotype. Emotional maturity and management of emotions needs to be developed into a higher level of understanding. Only then can they be regulated, eliminating the knee jerk default pre-programmed reactions that don’t apply to trading, yet might be very successful and applicable in running some other business. They might be in control running a business but fail in coordinating trading using the same principles. They soon realize they have no control over the markets outcome.

They use an approach mentally that has successfully worked in the past yet don’t realize it doesn’t apply to the trading business. They blame the market not their own faults or approach. They don’t see that they are their own worst enemy. Self-preservation keeps their ego inflated for protection. This will not be useful in the trading arena since they focus on being right rather than trading coherently. They need to stop making excuses to justify their inadequacies as a trader and start to self-evaluate. Eliminate the “it’s not me” syndrome and assess themselves honestly. Putting in over-time, or buying a new indicator or system is not the solution and will not create successful day traders.

They need to change what’s inside the mind before they can expect different trading results. The best tool is the ability to implement mind over matter. Similar to preparing the mind for walking barefoot over hot coals, but not quite as extreme. Emotions are kidnapped by the sub-conscious mind and the unaware recipient of adrenalin due to stress is left flailing unprepared for clarity in search of desperate resolve. They can’t just pretend the emotion isn’t there; they need to acknowledge it and manage it properly. They need to understand what’s actually happening. Admission and acceptance is critical before they can seek the road to retraining for optimal emotion management a major requirement  qualifying successful day traders.

Horst

(more next week)

Newsletter #2

Successful Day Traders – Emotion And The Traders Mind – You have no enemies in the market. The only “ill will” to be found, are those that you bring on to yourself.

Successful Day Traders - Emotion And The Traders MindTo pass thru the doors of success you need to give each emotion a place as well as a function. You need to acknowledge, monitor, and harmonize the inner emotional conflicts. Emotions need to function with you, not against you. Recognizing and acknowledging them is the 1st step. You need to look and evaluate from the outside, similar to an out of body experience. Like an impartial observer collecting data, but yet only observing, not participating.

A great example for a better understanding can be found here in the free trial version of HEADSPACE. Like the recovering alcoholic, 1st you need to recognize and accept the fact that there is a problem. Then, and only then, can you address the issue. Honest self-awareness and evaluation is necessary before any progress will be seen or control can be implemented. Your emotions are in control of your daily decisions because that’s what you have been programming since childhood. Most of the information in your subconscious was entered when you were less than 8 years old. A lesser amount of the information was loaded when you were between 8 and 12 years of age. After 12 years, your critical filter, which is now well developed, hardly allows any new information to get into the life script area of your subconscious. Any associations and conclusions in your life script area (subconscious database) are accepted and acted on by the subconscious as fact. That’s a recipe for failure in the trading arena.

Successful day traders need to be in control of their emotions rather than the other way around; otherwise they will turn into their own worst enemy. The conscious mind processes daily data and hands it over to the subconscious beliefs for evaluation. The subconscious does nothing more than respond with a predetermined reaction that applies to the emotional responses that best fit the data gathered. Unfortunately this might not be an accurate assessment of the situation at hand. What we actually need to do is update, restructure and tweak the data input database for emotional responses.

We need to produce updated and more applicable emotional responses to replace the old defaults. Nothing will change until this happens. Albert Einstein said, the definition of insanity is doing the same thing over and over again and expecting different results. Yet the solution is simple and the results are powerful and exciting. Once awareness and understanding of what makes the conscious and subconscious mind work, it’s only a matter of reprogramming and reorganizing the existing responses to emotions with new ones.

The conscious mind occupies 12% of the minds power. The subconscious is the most important part of your mind and occupies 88% of your total mind power. The subconscious has two functions. It stores all the long term memories and associations and also controls all your bodily processes and emotions. When you were young, your view of the world was from a child’s perspective and is not necessarily correct many years later. The meaning that you assigned to experiences was assigned from your perspective and from your maturity at the time and is generally not the truth unless updated defaults have been programmed to override the outdated.

Let me give you an example. Suppose when you were eight years old, and you were saving your allowance money to buy the new thing-a-ma-bob at the store. One day you go with mom to get the blue one you’ve been dreaming about only to discover that at the cashier you didn’t have the money in your little pocket anymore. You somehow lost it walking through the mall. Now, even though you are an adult, thinking about losing money might bring on unexplained feelings of anxiety, panic or despair. This is because your subconscious acts on all the information it contains as if it was the absolute truth. For your subconscious, the thoughts of losing money might always be associated with the unpleasant incident of your childhood.

There can be a world of reasons why you react to events the way you do today stemming back with a cause originated from early childhood and never reprogrammed. Fear, anxiety, and stress can have many points of origin and come in many different patterns. Emotions can be understood, managed and retraining by exercising variations of mind over matter. Here is an outline grouping some of the items I will be discussing.

  • Understand the emotional process and sequence of events. Knowing what’s actually going on inside you.
    1. Chemical secretions are triggered proportionally to the levels of emotion being subconsciously calculated
      • secretion of Cortisol feeds anxiety lows, while testosterone triggers euphoric highs
        • Cortisol responsible for fear of losing, uncertainty, hesitation, defensive anger, confusion
          • Moving stops/targets, late entries, over-trading, revenge trading, fear of trading, poor management
        • Testosterone/dopamine responsible for greed, over-trading, moving stops/targets, revenge trading
          • Removing/moving stops/targets, over-trading, revenge trading, poor trade management
  • Recognition of a triggering event and the awareness of the emotional onset. Forewarned is Forearmed
    1. Notice early stages of emotional kidnapping and understand where you are likely headed without intervention
      1. Breathing quickens, sweating begins, muscle tension increases, blood vessels constrict, heart pumps faster/ harder to push more blood to hands and feet in preparation for fight, flight or freeze
        • The closer the heart rate gets to 145 beats per min the closer the trader gets to losing their cognitive reasoning ability. There is a 90 sec. window to intervene before facing 60 min average recovery period.
  • Know where your normal level of calm is and use it as your benchmark to take internal emotional readings. Being at 0 stimulates a higher brain function.
    1. 0 = Normal
    2. +++++0 = Incremental Levels of Cortisol
    3. 0+++++ = Incremental Levels of Testosterone
  • Short Term Measures of intervention used to prevent the emotion from escalating to higher levels. Initiated upon awareness of the emotion approaching.
    1. Short term training solutions/exercises of breathing properly with deliberate awareness
      1. Focusing on breathing will entertain thoughts other than the trigger.
        • Slowing chemical secretions allowing more time for intervention.
      2. Rerouting the thought pattern, changing the topic, stepping outside the emotion and observing impartially
        • Mini Meditation rerouting emotional traffic while observing without participating
  • Longer term measures of correction. Changing old habits will become automatic in 6-10 days and permanent after 6 months!
    1. Retraining of subconscious mind to re-categorize outdated default responses for specific events.
      1. Emotions are just thoughts and with a strong mind power, you choose to accept, refute and control them
      2. One default response does not fit all and the subliminal database needs updating
        • Re-frame a difficult situation default setting into a peaceful comfortable one
        • To bring any change, alter your attitude from within
        • Believe that you want the change to happen by altering your attitude and believing in yourself
  1. Meditation helps achieve desired levels of mental focus and concentration so that you can gain cognitive power.
    • Instill thoughts that you want your subconscious mind to derive out the possible solution to the problem
    • Meditate regularly and be in touch with your inner, subconscious self
    • The subconscious can easily be reprogrammed by repeated reaffirmations introducing new beliefs
      • Enables you to focus on the present, while keeping the trading perspective of past and future relevance
      • In trading you need to focus on the only thing you can control, the NOW
      • Can’t change past or anticipate future right this min.
  1. Repeated visualization is extremely effective in training your subconscious mind to enable you to accomplish goals
    1. Imagine the end objective on frequent basis like thrice a day or so.
    2. Accept the visualization as a part of reality and you will start working to achieve the set goals.
    3. The mind can unlearn what we don’t want to think and can retrain itself to think what we want it to

1st Recognize and acknowledge the emotion; rather than ignore it or pretend it isn’t there. Re-channel it into compliance and manage it. It’s still there, but now it will be manageable. Recognizing what feels normal (self-awareness) and pinpointing emotion as anything above or below normal in incremental values. The subconscious has already been preprogrammed to react with x emotion, all you need to do is channel z emotion in its place and let x run its shortened course without participating in the event, only observing. After all it takes two to tango. Plain and simple, just train yourself to not participate and only observe from the outside the emotion. The key is recognizing the onset of these feelings before the emotion arrives. There are brief introductory videos below.

You need to reroute the invitation that signals you by means of thoughts and suggestions to participate in that emotion. These invitations are always sent as urgent or top priority. Don’t fall for it. Implementations of preventative measures are essential for bypassing participation and focusing only on observing these thoughts as a spectator. This is where we need to focus and apply mind over matter. We need to have the power and ability to determine and choose which mind will be making the decisions, the frantic emotional mind, or the relaxed, easy going, clear thinking mind. You do have a choice.

Once you understand and regulate your emotions, only then can you champion the trading mind by re-channeling the emotional levels of participation. What if you made a video of yourself while trading, would you be able to spot the change in your physical behavior as the emotions scale up? Do you look and act like successful day traders? It’s imperative to notice the transition from normal calm to increased anxiety escalating into warp drive. If you suspect emotional hijacking, make a point of making this clear to yourself. You might feel emotions escalating; it would be interesting to see what your body language actually looks like during this transition period. Do you start out looking and feeling confident, and then deteriorate? Even if you don’t make a video of yourself, at least make a mental note of what’s happening. What’s your body language communicating to you, confidence, fear, or cocky overconfidence?

Personally speaking, when I trade now, I am totally aware of my body language. I find myself most comfortable and relaxed sitting in my chair feet up on my desk (L-shaped). My left hand is behind my head, right hand alternating between my mug of tea/coffee and my mouse on my desk. Almost all my trades are taken with this relaxed posture and body language. It just feels right. When my feet touch the ground and I sit up (if I’m in a trade), I know instantly, like sirens going off, that the enemy might be approaching and it might be time to circle the wagons and regroup. Forewarned, is forearmed. Those who know that something is coming are better prepared to face it than those who do not know. Next I take readings and monitor my emotional levels on a progressive scale.

A great video on the meaning of Body Language can be seen below. What does yours say about you? I was pleasantly surprised to learn what my most comfortable position while trading really meant in body language.

Horst

(more next week)

Newsletter #3

Successful Day Traders – Emotion And The Traders Mind – Can you really trade, or are you just going in circles?

Successful Day Traders - Emotion And The Traders MindRecognizing emotions early on will enable traders to regulate the chemicals being released into their bloodstream. They can then delay progression, and de-activate triggering to higher levels of the chemical’s secretion. Intervention needs to be hasty before these released chemicals incrementally increase emotions to extreme levels whereby making them more difficult to re-channel. Many times levels reach that point of no return, and chemically driven emotions take over all thought control and force involuntary reactions and impulses. There is a 90 sec. window to intervene before facing a one hour average recovery period. It starts with a flush feeling, the breath becomes short and shallow, and the heart beat quickens, the chest pounds, the sweat pours, the knees shake. I’ll talk about trader emergency first aid techniques for this in upcoming newsletters.

As all this is happening, the trader is losing blood circulation to the brain, and cognitive reasoning is suddenly compromised. The body’s chemical secretion of Cortisol feeds anxiety lows or to the other extreme, testosterone triggers the euphoric highs. Either one at their moment of release will throttle emotions up way past normal, making it difficult to think and trade calmly and clearly. Of course emotional responses can vary per the individual, but fear and anxiety can cause blood to be drawn away from the brain and routed to the extremities of feet and hands preparing for fight or flight responses.

This sequence of events with emotions will trump intelligent thought. If the track record of the trader at the subconscious level hasn’t been proven and there is no evidence that they actually can trade, they might “fight to be right” (ego). They might put anger into the mix, rather than believing in themselves and their trading skills to fend off that emotional reaction. They might curl up in the fetal position (mentally) hoping the trading gods favor them that morning. To get rid of the fear and back to a normal level of comfort, they get out of the trade completely.

Failure to launch many times stems from an eagerness to participate in the market before the appropriate trading skills are developed. A little knowledge can sometimes be a dangerous thing. Imagine an ambulance driver reading a few books and taking a class on CPR, then deciding to hang out a shingle calling himself a cardiovascular surgeon. Unqualified traders use this logical approach every day. Impatience can cause them to blindly qualify themselves as traders way before they have acquired the proper skill set needed. By opening an account they can fulfill that desire by buying their trading credentials. Once that account is open and the shingle is up, they see no reason to not invest real money. The probable losses from unskilled trading is devastating to their emotional database. This creates confusion with the root of the problem being buried deep within a mix of intertwined emotions that are now difficult to separate.

Not knowing how to trade and venturing into the live cash market causing repeated bad experiences can devastate a person emotionally. Not knowing how to trade but having enough capital to keep going is not much of a game changer. In fact this postponed recipe for disaster is even more devastating. The larger the account size, the longer it will take to deplete, and the more ingrained this emotional turbulence will become. Fear and uncertainty will be programmed repeatedly until it becomes the new default. The real underlying reason most likely is being caused by ego which is also an emotion. It’s not me, its my system, my indicators, my money management skills, the market is biased, and so on and so on.

Often they focus on preserving their capital thru money management. Delaying the inevitable if you will. Hoping that somewhere along the way before they run out of money things will turn around. Just because they have a million dollars in their account doesn’t mean they will preserve it by managing it properly. If they don’t know how to trade, they simply don’t know how to trade. They need to stop fooling themselves. They will lose it all just like the guy with the 5k account. The only difference is that it will just take them a little longer. Money management is crucial, don’t get me wrong, but you need to be able to trade first.

This is important, very important. You need to be honest with yourself and determine whether or not you actually can technically trade before you blame emotions on your issues. Genuine emotional fear is warranted if the trader can’t trade. This legitimate fear is incurable in terms of regulation and control until the triggering mechanism is identified and eliminated. The perpetual onset of this emotion will always be lack of trading skills. The emotional problem can’t be fixed, until the cause is fixed.

On the other hand, misplaced fear which is an unwarranted emotion, can be regulated and controlled. There is no reason for it to be there in the first place other than sheer habit from past categorical placement. This type of misguided, misplaced, emotion is initiated due to error. This can be regulated and controlled. There is an emotional problem, where there should be no problem. This can be fixed.

The left brain is your conscious mind, while the right brain hosts the subconscious. Your subconscious mind or right brain triggers to emotion any time you leave your comfort zone. Any time a familiar established life pattern is interrupted, emotions are initiated. Uncertainty and confusion trigger emotions. All traders face uncertainty, but, a trader that has no prior successful trading records vouching for his credibility, is probably cynical of his skills to to begin with. Skilled traders that have proven they know how to trade, have eliminated that area of self doubt and uncertainty. They are able to differentiate between trading malfunctions and emotional malfunctions. Trading maturity and emotional maturity are 2 different animals, even though they love to play together.

If firstly a trader can’t comfortably double a demo account, they most likely are misdiagnosing their physiological side of trading if they are using emotion as their scape goat. They possibly have not achieved that level of understanding in trading yet and aren’t aware of the real issue, lack of skill. Blaming emotion in this scenario would be putting the cart before the horse. Unfortunately many traders will never reach that level of trading consistency to initiate concern about the real emotional diagnosis. Imagine someone blaming emotion for their failure if they haven’t mastered technical trading yet? Can you imagine how hopelessly frustrating this would be? They are unaware that they are unaware to why they are unaware.

Once my students have graduated and they now know how to trade technically, they should be able to comfortably double their demo accounts consistently. They should be able to double a 5k account trading 1 contract, or a 10k account trading 2 contracts every 6-8 weeks over and over again, effortlessly. That’s the recommendation, but I stress that they make it the rule. If they can’t, they have no business trading cash yet. They are no where near a successful day traders status. Proving to yourself that you can actually trade on demo gives you credibility when addressing the subconscious mind. If you experience any misplaced emotion in your trading, you can now demand to know why, because there is no reason for it.

You have proven that you really do know how to trade technically. You have proven this by practicing, over and over. You can now grab the subconscious by the collar and tell it to back off. You now have a leg to stand on when making your case. The highly intuitive subconscious has witnessed all your accomplishments. You are not just defensively covering up a skeptical track record with self serving excuses. You can’t fool the subconscious mind. It knows when you’re bluffing and will cause confusion and uncertainty if you are. This type of emotional uncertainty creates an impasse.

Not knowing how to trade or not proving to yourself that you can trade leads to technical trading confusion which needs to be rectified first. You might think you are a successful day trader, while yet, you are not. This element needs to be taken out of the equation altogether otherwise this emotional switch will always be set to on. It will give bona fide cause for uncertainty, which leads to fear, which leads to chemical releases, which leads to unbridled emotion. To be a true emotion that can be regulated and controlled it needs to be unsubstantiated and unwarranted. Lack of trading skill is a HUGE substantiated an warranted reason to expect uncertainty which will result in emotional fear.Successful Day Traders - Emotion And The Traders Mind

You need a proven trading system to help mature your technically skills. Once confident that your system truly gives you the edge with understanding and proven probabilities you might find yourself at a crossroad. Some traders are able to take their set of trading skills and skip merrily down the road to self-fulfillment as traders, while others jump out of the frying pan and into the fire. If the struggle seems to be stemming from emotions, you need to be aware, that you need to be aware, of your beliefs and emotions. Once you can identify them, you can communicate with them to find resolve through meditation, retraining, visualizations, or nurturing affirmations. You’ve developed your trading skills, now it might be time to develop your physiological skills to train your brain.

Emotions are triggered anytime we find ourselves venturing outside of our predetermined comfort zones. Prior to the emotions taking hold, they need to be re-channeled before the decision making ability is compromised and foolish trading choices are made. These chemical secretions causing emotions will over ride intelligent thinking and logical reasoning. You might possibly think someone else has been trading your account rather than you, while re-evaluating the trades later on. It was the emotional trading demons performing, not you. The pressure of uncertainty released these chemicals that fueled these emotions that forced these bad decisions.

As mentioned earlier, the pre-programmed subconscious mind has categories that are set with default responses. Any new closely matching abnormal or unexpected events or situations similar to the older events will produce default emotional reactions. Many years of subconscious programming since childhood make these default responses and reactions to new events seem acceptable. Many traders fear the unknown, and as a result they don’t focus on the known. They focus on past losses or future needed profits, but not what’s in the here and now.

Pre-programmed emotional reactions from the past which have been set as default, are ready to spring into action should a similar event categorically seem to fit the paradigm. Past experiences are categorized in a general sense rather than a precise manner and can many times be wrongly grouped without specifics producing inaccurate channeling. One size does not fit all. You are experiencing off the rack responses and once allowed and deemed acceptable in trading situations, they will influence same like future responses. Even though they are now outdated and improperly and unknowingly categorized, they were the default reactions. Past emotional experiences influence future similar emotional experiences. It’s a never ending vicious circle of exaggerated responses to the unaware trader.

Once the conscious mind is influenced by an emotional environment that’s been mislabeled, it will stay mislabeled until updated and changed. New emotional data from the new trading environment might find a category in the old emotional database of what’s an acceptable behavior and set this as the default response using an outdated irrelevant emotion. There are fear emotions induced by past bad experiences as well as euphoric emotions from past good experiences, both taking you for an emotional ride. The key is focusing on the present and rejecting invitations to revisit past experiences tied to past emotions. Future needs are tied to anticipated goals and dreams which also produce undesired emotional thinking. Let me repeat this since it’s of utmost importance. The focus needs to be on the present here and now and to reject any interference from any feelings that will manifest into emotions resulting from past events or future expectations or desires.

The only thing you can control is the current, the now set of feelings, emotions and results. Successful traders understand the mind needs to live in the present where they have full control of their decision rendering, emotionless faculties. They know they have no control over past so they don’t dwell on it. In summary, if a trader really knows how to trade, and can maintain an emotionless atmosphere, they can make intelligent decisions void of any deviation due to emotional influences outside of the here and now.

To rid yourself of your internal trading demons, it’s essential to sharpen your emotional awareness and retrain the subconscious to eliminate emotional kidnapping of intellectual reasoning. Only then can you focus on the current data present in front of you in the now, and give you the unbiased cognate abilities to manage unknown variables using probabilities for best trading results. This will allow focus of concentration on managing technical probabilities of the trade in the here and now rather than anticipated results or outcome from past or future. Only then will the trader bring with them the mind required for successful trading. The technical skills of high probability trading have already been mastered giving them the technical edge. Now it’s time to understand and manage the mindset required giving them the mental edge. This harmonious combination will produce a byproduct of success, while opposing mergers will produce conflict.

Horst

(more next week)

Newsletter #4

Successful Day Traders – Emotion And The Traders Mind – First Aid For Run Away Emotions

Successful Day Traders - Emotion And The Traders MindOn one end of the emotional spectrum, successful trading can push the limits and can also result in increased chemical production of testosterone and dopamine. This drives an emotional euphoria that if not harnessed properly can result in invincible thoughts of grandeur. If a little reward for the risk feels this good, why not go for more? The testosterone level for a rational normal mind is then overridden and substituted by emotions of euphoric anticipations.

These emotional extremes caused by the body’s chemical secretion into the system alter the normal state of mind and deters us from intelligent logical decision making. It feels great so you see no harm whatsoever because we don’t recognize it as a harmful emotion. It compromises the ability to properly manage risk and one disappointing trade later you’re not managing proper risk/reward parameters any more. You will push it to the limit riding the emotional euphoria into a wall by over trading and usually resulting in revenge trading, chasing trades, moving/removing stops, and targets. You will fail to see risks as relevant and will possibly ignore their potential harmful consequences.

Euphoric testosterone/dopamine highs teaming up with greed can make you lose touch with reality on the feel good end of the spectrum. Instead of fear causing revenge trading it’s the euphoric highs trying to maximize profits with feelings of invincibility this time. Once again the need to understand and recognize this is also a part of developing emotional understanding and maturity as a trader. If you don’t understand what’s happening, you can’t fend off that emotional impulse and its consequences.

This level usually happens after a trader is more technically advanced and is capable of trading profitably. It’s much easier to correct and manage euphoric emotion rather than a fear and negative feeling with cortisol driven emotions. But still, if unrecognized and unrestrained, it can cause just as much harm to the account. Self-awareness once again is the key factor here.

Being able to monitor your emotional thermometer and keeping it at 0 is vital. A professional trader knows he must maintain this emotional status quo or suffer the consequences if left unchecked. Being impartial either way and maintaining a 0 emotional scale will reward the efforts with profitability. Once again self-awareness is crucial to disciplined emotions.

If you are unaware, you can’t monitor and manage them to keep all in a delicate balance. Any excess emotion on either side of the scale is dangerous even though the euphoric will feel great and fool many. But this testosterone dopamine combo inflating the ego will also take its toll if not kept in balance. Zero is my hero.

Effort is not enough… Effort to eliminate emotion during trading is not enough. You can’t just think it to make it happen. It’s not quite that easy. The subconscious mind which is in charge controlling emotions can’t be over ridden or reprogrammed at the drop of a hat. Emotions are linked to and equated into habitual preprogrammed patterns. There is a default response to anything outside of normal surroundings or circumstances.

Normal is 0 and any fluctuation plus or minus sends signals to the endocrine system which is the internal chemical secretion system. Once chemicals are released the state of emotion is activated causing a plus or minus from normal. Anywhere above or below zero, the brain thinks and makes decisions differently relative to the amount of chemical that was released.

As mentioned earlier, the subconscious mind has preset default levels preprogrammed since childhood and is programmed not to be reprogrammed. To change the default settings the subconscious mind needs to be rebooted if you will. It needs to be re calibrated to accept new default settings for zero. If someone doesn’t understand this concept nothing will ever change in the reactions column as to what’s currently set as the new default, so it will continue to use what’s available in the old database of reactions.

First u need to establish your normal calm happy place. Anything outside of normal will generate an emotion and produce a release of internal chemicals. What is normal?
Let’s call normal 0 emotions on a scale, of calm and tranquil.
If we were to ratchet up 0+++ (levels of testosterone/dopamine)
or ratchet down +++0 (levels of cortisol)
There needs to be an adjustment back to 0 where normal breathing  and heart rate will promote cognitive abilities.

Cortisol produces stress and anxiety preparing the body for fight or flight responses and reactions. Testosterone and dopamine cause euphoria, along with visions of grandeur. They all have the ability to compromise the cognitive state of mind and logical thinking by taking away or adding to what’s normal or 0. Most importantly at this point you need to be aware and be able to determine your +++0 reading or your 0+++ levels and incrementally readjust as necessary. You need to train yourself to be aware of your emotional temperatures and realize that your participation in trading is being compromised should you not be at 0 emotions and therefore accept the probable consequences.Successful Day Traders - Emotion And The Traders Mind

Once you know where your 0 level of emotion is, your “happy place” as I call it, it’s your duty to keep your emotional level there. If you feel an incremental slide one direction or another, the emotion center of the brain called the amygdala, is triggered and we need to deactivate it. We need to instead activate emergency measures to get the reading back to 0, otherwise we are set for fight/flight/freeze.

Deep breathing exercises have an amazing power to rectify any misguided chemical releases. Shallow, quick breathing is the breeding ground for emotions on steroids. When we begin feeling stressed, we have a tendency to also begin breathing faster and shallower causing the increased volume of carbon dioxide in our blood. Next our blood vessels begin to constrict, causing our heart to pump faster and harder to push more blood to hands and feet and less to the brain in preparation for fight or flight response.

The imbalanced ratio of Oxygen (O2) and carbon dioxide (CO2) in the bloodstream results in feelings of anxiety. It’s a vicious circle. The closer your heart rate gets to 145 beats per min the closer the trader gets to losing their cognitive reasoning ability. What we are in essence trying to accomplish is to break this vicious circle and bring the heart rate back down to normal as soon as we notice a deviation from normal. Of course the better shape your cardio vascular system is in, the faster your body can recover and return back to normal. A well rounded trader is in shape physically as well as mentally.

There is a breathing exercise called “combat breathing” to aid in getting you back towards 0. Begin by breathing in through your nose for a count of 4 making sure you extend your belly slightly pushing oxygen way down there first. Hold your breath for a count of 4. Release breath through mouth for count of 4 as belly goes in. Hold empty lungs for a count of 4. Then breathe in again for a count of 4. Repeat as long as necessary. No worries you can’t over do this.

When you take a deep breath in, your diaphragm stimulates the nerve in your brain called the vagus nerve. This nerve runs from your brain stem all the way to your internal organs including the heart. The vagus nerves carry a wide assortment of signals to and from the brain, and they are responsible for a number of instinctive responses in the body. When the vagus nerve is stimulated it releases chemicals into your heart and tells it to slow down. When heart rate decreases, breathing rate decreases, sweating goes down, muscle tension lessens, and your PH levels are back to normal which is the first step in helping keep these emotions at bay.

Once back at 0 the trader can make decisions based on technical probabilities once again without interference. Taking 60 seconds to do 3 or 4 repetitions, will usually help drive emotions back to normal and help you calm down quickly. Performing this exercise will also temporarily deter your thoughts from the original trigger impulses, giving you the opportunity to refocus or as I like to call it, “regrouping”. Repeat as needed, but keep in mind this is only for quick first aid. This will get you back to zero where you can begin to re-channel your thoughts/emotions, but stronger measures must be taken for proper awareness training.

Horst

  • Learn To Daytrade Proficiently
  • Step By Step Guidance
  • Trade Only 30-60 Min At Market Open
  • Futures Are Very Liquid
  • No 25k requirement to day trade like stocks
  • Keeping It Simple Makes It Easy To Understand
  • Spend Months Not Years Learning
  • Finally Experience Consistency
  • Eliminate Uncertainty & Confusion
  • Average 4:1 Trade Risk Reward Ratio
  • Average 60% Return On Investment Daily
  • Trade From A Subconscious Level
  • Understand What Is Happening On The Charts And Why
  • Accurately Predict Market Movements Before They Happen
  • Know Probability Of Trade Success Ratios
  • Know Whether You Are Pivoting Or Trending
  • No Unreliable Feel Good Trade Signals
  • Step Away From The Crowd Looking For A Free Ride
  • Gain Control Of Emotions And Trade Mind Over Matter
  • Free Data – Never Pay For Data Feed Again
  • Free Software – Never Pay For Charts Again
  • Trade Anywhere You Have High Speed Internet
 
RISK DISCLOSURE / DISCLAIMER.... U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Futures and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This document is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. If you decide to invest real money, all trading decisions should be your own. There are no guarantees or certainties in trading. Reliability of trading strategies are in probabilities only. Trading involves hard work, risk, discipline and the ability to follow rules. If you are looking for guaranteed income, trading is not for you. Most people lose money with trading. A system can help you become consistent, but you have to stick to the system, AND develop your skill as a trader. The ability to be disciplined and control your emotions is even more important than any technical indicators a trader may use. Neither ("Horst") the EMini Tutor, nor its principals, officers or employees are registered investment advisers, or brokers/dealers. By engaging in any material produced by ("Horst") the EMini Tutor, you agree that the information contained within is for educational and/or informational purposes only and is to be never construed as trading or investment advice. No claims as to past, present or future profitability of our services or other EMini Tutor systems are made, and there is no guarantee that the system will provide any profits to traders using the system, and may indeed cause such traders to incur losses. CFTC RULE 4.41 - PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS, AND THIS DOES NOT GUARANTEE PROFITS OR PREVENTION OF LOSS. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE SIMILAR PROFITS DEPICTED IN ANY PRESENTATION OR PERFORMANCE REPORT. CFTC Required Disclaimer: Hypothetical or simulated performance results are used, these have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have been under- or over-compensated for impact. No representation is being made that any account will or is likely to achieve the profits or losses similar to the examples shown. Use caution and seek the advice of qualified professionals; check with your financial advisor, accountant, or attorney before acting on any of this information. Using any of the material developed by ("Horst") the EMini Tutor presumes you have fully read and understood the risks involved in trading futures/commodities as set forth in this disclosure. Testimonials are not indicative of future success and have not been independently verified.
 
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