The Winning Traders Mind Set
How to improve your mental trading state
Understand conscious and unconscious thinking - This involves identifying parts, understanding their positive and negative intentions, and fostering a relationship between the “Self” and these parts to unburden them. Your “parts” are: Managers who plan and prevent, Firefighters who react when things go wrong. and Exiles - Past wounded parts of you. Those who do not want to experience the pain again.
Your managers and firefighters are protectors of the exiles, and they work hard to protect them from pain, whether it is physical or emotional. Trading IS emotional pain. So when you better understand your protectors and exiles, you can better plan your trades, and better planned trades creates confidents in your trading strategy.
Control instincts and emotions - Instincts are innate, inherited, and automatic behaviours directed toward survival goals (e.g., flight response when the wick just took out your stoploss or vomit responce when you see minus for P&L), while emotions are internal, conscious, and often learned feelings that signal changes in mood (e.g., fear of missing a trade or the joy of the candle crossing your take profit line). Instincts provide the action, whereas emotions provide the feeling and motivation. To control instincts and emotions, we must first work out which instincts are fighting each other and which emotion shows as the outcome. Once we have worked this out, we can then get to grips with secondary gain and self-sabotaging patterns.
Secondary gains are, as I describe, a special type of self-sabotage pattern. They can be quite a big obstacle to process. Secondary gains are sections of your mind that are conscious motivators that reward you in emotional or physical ways for holding onto your problems and blocks.
“Imagine a little boy whose parents work all the time and never really give any love, because they’re working all the time to give him the life they never had. Except for one situation when he falls over in the playground and scrapes his knee, resulting in a reaction from his father, who runs up to him to give comfort and love. What happens now is that the child associates the pain he received from the fall as the only way he can receive love from his father. The child now falls over or hurts himself all the time just to get the love and affection he doesn’t normally receive, resulting in a secondary gain. Physical and emotional pain share significant overlap in the hormones and neurotransmitters they release, as the brain often processes them through the same pathways. So, what he has subconsciously done is associate that pain he received as a child with love, binding that pain to an emotion. Meaning to feel love from his father, it must be from a place of pain. This emotion and instinctive imbalance will affect every decision he makes throughout life, including his trades.”
Buy contolling their instincts and emotions allows them to accept the pain that comes with trading.
Command hormones and neurotransmitters - Your emotions, instincts and mental states act as a "conductor," triggering the brain to release specific neurochemicals (e.g., endorphins, serotonin) or signals to glands to release hormones (e.g., cortisol, adrenaline). Trading can be very stressful, and when you are stressed, your body undergoes an immediate, automatic, and complex "fight-or-flight" chemical reaction designed to prepare you to face or flee from danger. This response is driven by the nervous system and the endocrine system, triggering the release of key hormones and neurotransmitters, including adrenaline (epinephrine), noradrenaline (norepinephrine), and cortisol. Cortisol, the primary stress hormone, acts on the brain to manage acute stress by boosting alertness and energy, but high levels can damage brain structure and function. It shrinks the hippocampus (memory centre), reduces prefrontal cortex function (impairing decision-making), and increases amygdala activity, which can intensify anxiety and fear.
By understanding “when” and “why” these chemical hormones are released when seeking reward, experiencing discomfort and hiding from pain can help you command the difference between decisions made between the medulla (instincts) and the frontal cortex (logic) to help make logical decisions instead of fearful ones. I combine this with Neuropathway rewiring to rebalance their brain hemisphere, which in turn rewires their neuropathway and nervous system. Helping to separate the difference between pain and reward, emotion and instinct. Eliminating fearful market analysis and creating confident traders.