How to build new neural networks for more effective trading

Building New Neural Networks


An Introduction to Mind Muscles™

The markets are the markets. There is nothing most of us can do to change them. It is difficult to change the behaviors of people we know well, let alone the masses of people who affect the market daily. But there is one thing we can change, and that is our financial decision process.

This series of blogs will look at new behaviors we can create that give us additional investing and trading choices that impact our risk and profitability. The foundation for these Mind Muscles™ is an earlier blog post that can be read at: https://blog.marketpsych.com/2009/11/golden-thread-across-canyon.html. Each post will look at a new mind skill that will give you a new positive process.

Mind Muscles™ could save your life

Imagine you are mid-flight on a business trip. You hear a loud bang, the plane shudders and changes altitude. The pilot announces with a tight voice that we have lost an engine but not to worry. “I have the manual that gives me instructions on how to land with an engine out,” he says. “I will be reading the manual prior to landing.” Notice how this feels.

Now imagine the same loud bang. This time the pilot announces in a relaxed southern drawl that the airplane has lost an engine but not to worry. “I have landed in this situation successfully over 100 times in a simulator and have practiced this procedure during flight training multiple times. We will be safely on the ground in 17 minutes.” Notice how this feels.

Which scenario will give you the most comfort? There is a reason! You know intuitively that the second pilot has built in a strong “muscle memory” (or what we call Mind Muscles™) with his repetitive behavior.

Mind Muscles™ is the equivalent of the flight simulator for traders and investors.

Recent neuroscience research validates the model that the adult brain is being continually modified by experience. We now know that we can intentionally make new neural patterns that can profoundly alter our reactions to experiences. Even artificial experiences (like the Mind Muscle™ simulator), according to the new models of neuroplasticity, can change both the brain’s physical structure and functional organization at all levels. This is because neurons that “fire together, wire together.” We can automate complex patterns of behavior.

Because of our existing complex patterns of neural connections, changing habits feels painful. Neural messages travel the path of least resistance, and these are the connections that have been used the most. New behaviors require creating new neural pathways. We literally have to consciously think through new behaviors to make them happen. It feels like swimming in molasses which takes a tremendous amount of effort.

Mind Muscles™ training reframes this traditional internal struggle by creating successful experiences that are integrated with who we are, achieve our goals and are emotionally satisfying in the moment of the new experience.

Mind Muscles™ creates simulated experiences that isolate our hardwired responses at the moment of execution, expand it (as in slow motion) to give us awareness of our process in real time and give us new behavioral options. This way our students are able, in real time, to be aware of their own impulses as distinct from market activity. Our students create new productive responses to market activity rather than the primitive, hard-wired automated reactions.

With our new models of neuroscience and our Mind Muscles™ simulator training experience, there is hope. We can build new effective behaviors that support consistent profitability. Now, let’s create some new Mind Muscles™.

The point of this exercise is to teach the experience of creating new neural pathways. If we can do it in the Mind Muscles™ simulator, isolated from other patterns, then we are more likely to complete more complex exercises where creating new behaviors feels hard.

Mind Muscle™ Exercise: Experience Building New Neural Networks

Take out a sheet of paper and pen and get ready to write. Now, instead of writing with your writing hand, switch the pen to your non writing hand. Right-handed people will write with their left hand, and us left-handed folks will write with our right hand.

Write the following sentence:

I am making new Mind Muscles™

It is very important to experience this, not just read the blog. Notice how it feels. You have to consciously tell your hand to write a straight line, make a curve, etc. Keep writing and notice how this feels. Once completed, shift the pen to your normal writing hand and make a note of the experience and how it felt, what you thought and any physical sensations.

This is the important part. That challenge is the same challenge you feel when you want to improve your trading or investing behaviors or change ANY behavior in your life. This same experience of building new neural networks will be there. Only, they will be buried out of your awareness. Do you procrastinate about a task that needs to be done? It is likely that doing the task will require the same creation of new neural networks, but we don’t experience it AS creating new Mind Muscles™, we experience it as a vague unpleasant feeling.

The goal of this exercise is to reframe the vague unpleasantness of new behaviors into a positive feeling of building new Mind Muscles™. Like going to the gym and feeling the sore muscles, you know that you are getting stronger, healthier and looking better. In building new Mind Muscles™ you know that you are building new behaviors that translate into more profitable trading and investing decisions.

In later blog posts, we will start building specific Mind Muscles™ for trading and investing. This foundational experience will translate into a positive attitude to making these new neural networks as you improve your trading decision process.