Rich brushing up on trading psychology in the Nevada desert

Combat Trading: How combat training teaches trading psychology

A lesson in Combat Trading

How does a boot camp that teaches small arms combat, help traders develop a master trader’s mindset?

I just spent four days in the Nevada desert in an intense small arms combat training camp with live fire. I returned after a long hiatus while building the Mind Muscles Academy. I have often said that the challenge of a trading career is second only to combat. I had four days under the Nevada sun to again fully appreciate the value of this assumption.

Why did I do it? Many of my friends are going to be shocked to find out that peace loving Richard Friesen, who is known for his empathetic coaching, attends weapons combat courses and even co-wrote a paper on the psychology of self-defense training. Over the last two decades, I have been slowly adopting the practice of less ideology and replacing it with more direct non-judgmental experience. As a result, I have been able to step into many different worlds and experience them from the inside. Each world I embrace expands my flexibility and gives me more creativity and options in my own life’s choices.

What does this mean for you, my readers, students and clients? Small arms combat and trading trigger the same primitive survival brain reactions that sabotage our results in both arenas. In the heat of the “battle” on the field or the markets, humans not only miss the best choices for peak performance and response, but often make the worst choices available.

Do you repeat the same trading errors over and over again? There is a reason, and it's not your fault.

You see, your trader training is created with your higher level cognitive brain. Most “self-defense training” is learned under ideal “laboratory” conditions. However, the fight or flight response takes over when we are seriously threatened in combat and these self-defense skills are then lost when we downshift into our fight or flight response. The same thing happens when we are trading.

Why does trading trigger our survival mechanism? Because we have loaded a lot of expectations to our trading success. For some of us it is a dream of financial success which can be an obsession. For others it can prove to our family and community that we are capable after all. For some, it may even come down to a test of our worthiness as a human being.

Trading and combat can trigger the same survival mechanisms. I know it doesn’t make sense, but the survival brain experiences just black and white...survival or death. And because we load up our trading success with a critical importance (it can even feel like a life or death struggle), our survival brain hears this loud and clear and goes into action when required.

So, with this in mind, what can combat training teach me as a coach about our training process?

First, here are excerpts from a paper I wrote a decade ago when I first started self-defense training. (The full paper is in the “Inner Circle” library for our members). After you read this excerpt, I will then apply them to a trader training methodology that we are creating at the Mind Muscles Academy.

“In order to design effective self-defense training, we need to train in situations that are as realistic as possible. Martial arts or firearms marksmanship training often miss this essential ingredient.

No matter what level of self-defense training you have had or even if you have had none at all, we encourage you to ask yourself the following questions when selecting self-defense training:

  • Is this training geared to my real risks?
  • Does this give me the experience of being in a realistic situation such as I might encounter?
  • Will I experience the same physiological and emotional responses in training that I will under assault?
  • Does it take me through what feels and ‘smells’ like a real experience one successful step at a time?
  • Is it simple to learn and easy to repeat?
  • Can I gain substantial effectiveness in just a few sessions?

The more the training is able to answer “yes” to these questions then the more safe and secure you will be after you train."

The training I experienced last weekend was precise. Precise to the point that every part of my body and its positions were defined to maximize peak performance. The retired Armed Forces trainers had been there and done it. They had been through combat for real. And their job was to create the simulations that would give us the same experience.

Posture, finger placement, muscle movement, focus, timing, weapon position...you name it...it was precise.

Every possible action was defined in detail. The instructor’s job was to start slowly and build the absolute best practices and processes without error. The theory was that if you start sloppy, muscle memory takes over and it's very difficult to break the bad habits that inhibit peak performance.

Every little behavior that was “off” was corrected immediately. And then the demand was that we speed up. With enough repetition these minor little movements and positions started to instill themselves in our “muscle memory.” Needless to say four days was not enough, in fact, not nearly enough to create the complete muscle memory that I would need in actual combat. However the process was enlightening.

We broke every action down to its essence and repeated it over and over again. Just like in trading, there is a set up scenario. They used a color coding today note a continuum from safe to immediate danger. And in each of those states you presented a different mindset and set of behaviors. There were multiple evolving set ups each of them requiring a different response.

They taught decision process. How do you make a decision in each of these scenarios. There is the set up, and then there is the decision process, and then there is the execution. Once the action is completed they had a series of action after action drills to make sure the world was back in a safe space. We were graded on everyone of the processes involved from the set up to the action the after action drills. 

By day four of the training some of the processes were to be completed in under two seconds. In case something went wrong, we had malfunctioned drills. We rehearsed those until my hands were so sore I could hardly move them.

COMBAT

Strategy Training

  • Years of experience honed into best practices
  • Absorption of tested best practices

TRADING

Strategy Creation and Testing

  • Comparing trading strategies
  • Selecting strategies that fit our personality
  • Absorption of tested best practices

Threat awareness

  • Color coded
  • Internal and external awareness
  • Full peripheral vision
  • No assumptions
  • Pattern recognition
  • Rifle at “Field Ready”
  • Safety on
  • Finger off of trigger
  • Relaxed physiology

Market Mood Awareness

  • Market type
  • Broad awareness of market activity
  • No assumptions
  • Pattern recognition
  • Finger off of mouse
  • Finger off of mouse
  • Relaxed physiology

Threat Potential

  • Rifle at high ready
  • Scan for threats
  • Finger off trigger
  • Safety on
  • Review potential actions
  • Deep slow breathing

Setup Potential

  • Hand on mouse
  • Scan for market action
  • Review for potential actions
  • Deep slow breathing

Threat Confirmed

  • Rifle at fire ready
  • Safety off
  • Finger on triggers
  • Breathe out
  • Confirm target and environment

Setup Confirmed

  • Finger on mouse button
  • Breathe out
  • Confirm setup

Execute Shot

  • Decision process complete
  • No second guessing
  • Smooth trigger pressure
  • Breathe out
  • Surprise trigger break
  • Hold target in sights
  • Breath slowly and deeply

Execute Trade

  • Decision process complete
  • No second guessing
  • Breathe out
  • Smooth mouse click
  • Breathe slowly and deeply

After Action Drill

  • Move
  • Cover
  • Survey for additional threat
  • Return to “Threat Awareness” mindset
  • Check internal mindset

Post Execution Drill

  • Survey broad market activity
  • Confirm target and stop
  • Survey for unanticipated threat
  • Check internal awareness (S.E.T. scores)

I was one of the two oldest men in the group of forty. As a result, my physical flexibility, speed and memory retention was just not competitive with the younger men, some of them with previous military or law enforcement experience. I had to play a continual game of catch up. But for those who know me, it is the challenge that gives me a charge.

The simulations created significant pressure. Of course, the stress was not nearly as great as real combat, but in this model of training, if you repeat over and over the best practices, when you are under stress they will be automated. We were given real world stories of how this worked and failed.

So on the long drive home, I begin to think, what about this training process applies to trading? This is the process I want to expand with our clients and community.

What if, imagine what if we as traders did not have any destructive or unhelpful processes that we had to undo? What if, just imagine what if, from the ground up, each of us had a mentor that created all the details of a traders mindset and supported us in bringing those forward one step at a time. What if we were to create simulations that tested each of those beliefs and behaviors while under pressure and continually invited the trader to come back to peak performance?

What if we built into muscle memory all the peak performance processes that those of us who have been through the trading wars have refined and developed during our lifetime of trading?

My passion is continually bringing the best practices of peak performance to the Mind Muscles community. Would you like to expand your own unique and creative performance? Let’s talk to see how this can best be done. With our online courses, Mind Metrics application, Master Mind groups and private coaching, let’s find what works best for you. Please email to request a no obligation creative conversation. rich@mindmuscles.com

About the Author Rich Friesen

  • Jerru Riddle says:

    Interested ,mentorship is a necessity I feel. You may have a trigger id like to discuss more with you on.

    Jerry

  • Mitch says:

    Great post. While reading it I thought about the guided vizualisations I use from Mind Muscles. By continually listening to them, it has prepared my mind for the same situations as discussed above. In a heat of the moment trading situation, I stay calm, slow things down, narrow my focus on the necessary information, place a limit order and assess the way orderflow is moving holding the mouse to click cancel. Once I am in the trade I am continually reading the orderflow and other information and if there is a threat I place a limit order to get out. While this is happening, the guided vizualisations I have been doing, are guiding me to stay calm and focused and kick in everytime a fight/ flight response is surfacing and short circuit it with reasoning.

  • Bill Hess says:

    Your comments are quite helpful. No need for me to reinvent the wheel when you have already done it. Thank you !!!

  • Rich Friesen says:

    Bill, glad to hear from you again. Yes, it helps to adopt best practices that have been honed. And then from there you can take what works for you.

  • Rich Friesen says:

    Mitch, I am so delighted you have created a process for bringing yourself to the Master Trader’s mindset. The guided visualizations were designed for just that and I am glad they are useful. Keep up the process of building your “highest self.”

  • Rich Friesen says:

    Jerry, please set up a time to talk here: http://rich.ycb.me I look forward to a creative conversation.

  • Jim says:

    Interesting post. I like the concept of building muscle memory (practice) to build performance and eliminate bad habits. However, in my opinion, the source of the stress that all traders feel is fear of loss. Losers get no love. Just knowing this is what you are really worried about will calm you down. While combat is one metaphor for trading, to me trading is like stalking prey — not as a hunter with a high powered rifle, but as a predatory animal that has to evaluate every possible kill in terms of how much energy it is going to take and what the risk of injury is. And, they have to be very, very patient and very, very persistent. They have to be able to wait for the perfect setup and they have to tolerate a low level of successful stalks. Many prey show up, but for one reason or another the stalk must be abandoned.

  • Rich Friesen says:

    Jim, excellent observation. One theory on loss is that in our hunter/gatherer stage, it took far less energy to KEEP your hunt, than hunt again. So our brain delivers an extra shot of pain if we lose our game to encourage us to spend energy keeping the results of our hunt.

    In trading, like hunting for game, we only are successful some percentage of the time…and our brain reacts like a hunt…giving us a shot of pain if we lose. There are exercises that create work arounds, such as a coin flip game with a slight edge that can help create the muscle memory that traders need.

  • Rogerio says:

    Great article, Rich! One of the best I’ve read lately.

    Loved the side by side comparison between Combat and Trading processes. Right on!

    On a side note, it’s delightful to see your open-mindedness approach to life. It really inspires me to let go of my old set of beliefs and replacing them with more direct non-judgmental experiences. Something I can apply to my trading for sure.

  • Ben Letto says:

    Good shooting there! And I definitely see the parallels you mentioned. We learn that so many sports are reliant on “proper form” (physical positioning, weight distribution, movement flow, etc)…and trading has similar processes

  • Rich Friesen says:

    Ben, excellent point. So many traders start out without the “proper form” and that gets built into their trading habits or as we at Mind Muscles say “NEMES” or neuro meta structures. These habits then become a problem because it is difficult to know what behaviors keep us from the goals and we have a problem of we don’t know what to change or improve. What if we were to start with best practices, down to the details? This has a lot of potential for rapid growth.

  • Rich Friesen says:

    Rogerio, I think the critical aspect of what you said is “let go of my old set of beliefs and replacing them with more direct non-judgmental experiences.” The more I am able to allow direct experience, the more creative and open I am to what actually IS! I have been moving from one ideology to another most of my life…and as I let go of them I find myself more creative and at peace. This works for me in trading and my larger life. Thanks for pointing this out.

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