What will you do for yourself in 2018? What new behaviors will serve you better? What current beliefs do you hold that aren’t working for you? How do you see yourself in a way that you have outgrown?
Behaviors, beliefs and identity are ways to model our thinking. This model helps us build, expand and improve our lives. Behaviors are often built in top of beliefs. Beliefs are often an outcome of who we are and how we see ourselves and our identity.
Each of us has a choice. However, the voice of change requires intention.
Change comes in layers. Changing our behaviors, needless to say, is easier than changing our core beliefs. Expanding our beliefs is easier than changing our concept of who we are. But if we understand at what level we are expanding in order to make our lives better, we can then apply the appropriate intention.
Survival only, please. To complicate this expansion of our experience, we have old patterns in our brain, most often in our subconscious, that are connected to our survival mechanisms and want only one thing for us. That one thing is survival. Our survival mechanisms despise the unknown and the uncertainties of life. Thus any change or expansion of our experience will activate the subconscious routines to protect us from destruction. The subconscious routines, which we refer to as NEMES or NEural MEta Structures, can only think in black-and-white. Are we breathing? Is our heart beating? Good, let’s not change a thing.
We truly believe our biases. Additionally, our brains come pre-loaded with subroutines that behavioral scientists call cognitive biases. The challenge with biases is that they don’t feel like biases, they feel very real and very true. Every year it is a good idea to see which biases impact you the most. Here is a list of biases that impact many of the traders.
Beliefs are Reality: We believe our beliefs are true and not just models of the world.
Anchoring bias: Our brains select an arbitrary value (execution price) and give it weight.
Recency bias: Our brains put more weight on a recent event than is statistically valid.
Confirmation bias: Our brains filter out information that does not match our beliefs.
Ownership bias: Once we own a position, we value it more than is statistically valid
Bandwagon bias: Our brains want to belong to a group…and thus we adopt emotional beliefs.
Loss Aversion: Our brains deliver more pain for a loss than pleasure for a gain.
Attribution bias: We take credit for the good, and blame something else for the bad.
Hindsight bias: We judge trading behaviors as if we knew then what we know now.
So, what is your intention for 2018? Let’s pick a behavior such as “premature exits.” Let’s pick a belief such as “The markets are out to get me.” And let’s pick at least one cognitive bias that does not serve us.
OK, now that you have selected several points of behavioral expansion, let’s add intention. At Mind Muscles, we use our Mind Metrics application to keep track of our progress, but you can do this on a spreadsheet. List the current state, the desired state and then mark each trade or day with how you did. Parts of your brain will resist putting your new intentions on the line. That is OK, that is their job. You can be aware of this resistance and accept it as a survival mechanism.
Make your progress visible. With this awareness and acceptance, you can now add intention for new behaviors, beliefs and biases. You can measure your progress.
2018 is the year of intention. Is 2018 going to be another 2017? Or are you going to add new intention to expand your life experience? Either choice is OK…but with awareness, you have made the choice intentionally.
A veteran broker and floor trader, Rich went from the "worst trainee trader ever", to building one of the most consistently profitable options trading firms on the Pacific Exchange by training his traders using neuroscience. Rich also holds a Masters Degree in Clinical Psychology, a B.A. in Philosophy, and is a graduate of the Gestalt Institute in San Francisco along with Master’s training in Neuro Linguistic Programming (NLP).