Carl Richards makes it simple. Carl Richards has an uncanny way of taking complex financial issues and putting them in simple compelling sketches. You can see samples of his work at: https://behaviorgap.com.
This is one of my own, and was inspired by his work. Some time ago, I received a sketch in his newsletter on financial decisions and willpower. I believe that this graph represents success and will power in all areas of our lives including day trading.
The more we rely on willpower, the lower our odds of success.
We don’t need any willpower to do the things we want to do. For example, we don’t need “willpower” to eat that chocolate cake, flirt with that handsome guy or girl, receive praise from a job well done. NO ONE needs will power to do the things we want to do.
We only need willpower to do the things that “we” don’t want to do. This is because a part of us wants to save for retirement, cut down our debts, put in that stop loss with the trade AND, another part is putting its foot on the brake.
So, the traditional answer has been to discipline ourselves into doing the “right thing.” But as we know, very few New Year’s resolutions are kept.
Here is what is going on. From an evolutionary model, our immediate survival takes precedence over everything else. The survival instinct or what we call “Security Guards” at the Mind Muscles Academy, care about one thing only…survival. Are we breathing? Is our heart beating? If so, it is doing its job. It really doesn’t know anything about love, meaning in life, greater purposes, job satisfaction etc. It just cares about our immediate survival.
The Security Guards have just one job. This doesn’t make sense. I mean this really doesn’t make sense because the “Security Guards” aren’t rational. In fact, they may have associations to survival that were learned early in life that no longer apply. Yet they still respond as if we were seven years old. Client after client has been surprised when they uncover these “irrational” connections. I mean clients who are grown up, mature and successful.
So, we want to change our trading behaviors. Is this a threat? It could be depending on how associations were wired. Change is a potential threat to the Security Guards and they spring into action. If they perceive that the change you want to make may be a threat they grab your behavior controls in the moment of decision. Because they are attached to your perceived survival, they will win every time.
No matter how much discipline you impose, they will win.
Now, the question is, how do we change behaviors that the Security Guards fight?
Here is the reframe that makes all the difference.
The Security Guards have a positive intent for your life. Even thought this positive intent may be misguided or misinformed, it is driven by a positive intent for you life.
Your job is to discover the positive intent.
Mind Muscles (of course) has a laser targeted exercise to work WITH your security guards. We first give them a voice. We assure them that they won’t lose their job or get demoted. In fact, we are going to give them better training to do their survival job even better then they are doing it now…a promotion! We first understand what they need to protect us, and how we can give them better distinctions to do this effectively.
Here is an exercise that can pay big dividends in your trading and your life.
The next time you try to discipline yourself to a new behavior, look at the graph. There is a better way. The next time you “find yourself” with a behavior that no longer serves you, stop and name the part that is putting on the brakes. For example, the part might be “Fear of losing money” or “Just do something” or “Getting Bored.”
Now ask, “What is your positive intent for my life?” Once you have named that part or voice that is creating or stopping behaviors, then you can ask that part this question.
Listen carefully for the answer. It might be to keep yourself from shame or embarrassment. It might be to keep you from being wrong. It might be to keep you from losing money. It might be to keep you from risking your dreams and keeping them alive. Whatever it is, it is OK.
I invite you to accept this answer without judgment.
I have now described the first two “Golden Keys” of behavioral change.
Awareness is the first step to ending the internal struggle you are experiencing when trying to be disciplined.
Acceptance is now possible once you are aware of the survival voice.
Next you can start creating new behaviors that serve you better. You can start the process of working with your survival mechanism, your security guard. The Mind Muscles Academy expands this process in its online courses, private coaching and group support that creates a path to trading behaviors that feel better in the moment, support your values and move you toward consistent profitability.
I want to support you as you progress to your trading goals. For a creative conversation, please set up a time to discuss your issues and goals. Email me with a bit of your trading background and we can set a time to describe a path to success. Email “email@example.com” today.
PS: Frustrated with your trading strategy and want more strategy confidence? Click here to learn how the Mind Muscles Academy is opening new doors to strategy success.
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).
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Rich, I wholeheartedly agree with your first two steps, self-awareness is a ‘superpower’ that many do not possess. The good news is that it can be cultivated! Also, acceptance will breakdown the stuck energies of resistance. Acceptance does not mean ‘to condone’ or to give up, but as you say, when we have the courage to listen to those inner parts of ourselves – that might be that 7-year old self – and come to understand where these limitations come from without judgment, we can then begin to shift our brain/mind to a new path of thinking. This is what the concept of neuroplasticity is all about if used in a constructive manner. Thanks for an interesting post that ‘strikes at the root’ of self-sabotage and is sage advise for self-empowerment.