Trady nut, episode 200.
So visualization or imagery, mental rehearsal,
whatever people wanna refer to as is very powerful because neurologically,
the brain cannot recognize the difference between a kind of a mental simulation
and a real experience. So the neurological level, it's the same. Uh, and,
and the way of kind of making sense of that is think about a nightmare.
When you have a nightmare. It's an imagined experience, but you could wake up,
sweating, feeling the sensations of fear, heart pounding, and so on. So,
so we can use imagery to our advantage in training. And, and this is one of my,
I guess, mental training practices in many ways,
but it is useful in that way as Tom utilizes it, which,
and as I would do with my traders in terms of,
if we know the sorts of situations we want to kind of be more willing to, um,
embrace and accept and work with, we can rehearse.
The market's gonna do something. Your job is now to fight it.
The market never, ever runs away. It's always there.
That personal diary of trading will make you a much better trader than.
I could be right about the direction, but wrong about.
The trade. Don't focus on the monetary side.
Trying to make too much money on a trade is what I have seen killed every
trader.
Your losses offer you some of the greatest insight you can find into your
mistakes.
Relax, learn the process.
Candle state pattern training is a freaking trap.
Don't.
Be in a rush to become a millionaire.
Let the market tell you what the market wants to.
Tell you.
This podcast is not financial trading for investing advice of any kind.
What's up traders? Welcome to the 200th episode of the Trading Up Podcast.
So glad we got here.
Can't believe I've done 200 of these since starting trading up today.
We've got Steve Ward on the show. Now. Steve is a trading mindset expert.
He's been working with traders for over 17 years, Not just traders,
but he's been working with traders at, uh, some of the world's largest banks,
high performing hedge funds, asset managers, commodities, trading houses,
whole lot of other things, proprietary trading firms as well. So guys,
if we are in for a treat today and we go over things like the human condition,
the behavioral behavior gap, uh, the role of luck, outcome bias,
comfort versus discomfort, managing your emotions,
and fear of missing out. So guys that's coming up in the show, uh,
he's also the author of a number of books, so you wanna go and check those out.
They're all gonna be in the show notes. Now, um,
we've got a video on the channel this week that you also gonna want to check
out, which is from Louis Kelly, who's a past guest.
He did a live stream on the show last week, and it was quite a long live stream,
but there was some absolute nuggets in there.
What we've done is taken those out,
put them together in little video where you're gonna see really what drives
price and how the markets work from a smart money point of view.
So definitely go and check that out folks. After, uh,
watching this interview with Steve,
other things happening here on the 200th episode of Trading Out.
We've got the Robot Lab live.
We're basically putting the build that we've just been spending the last six,
seven weeks on, uh, into a demo account to test over the course of a week.
So we've got it looking pretty good, uh, from a portfolio point of view.
We're gonna run this on a, uh, prop trading firm very soon.
So if you guys do wanna check that out, head over there trading now,
look for the Robots link and you'll find Robot Lab Live.
You'll also find Robot Builders Club.
We're teaching how to pretty much turn your ideas into Trading Robots without
doing any coding whatsoever. So go and check that out.
Now before we get into it, two more things. The Scalping challenge, it's a, uh,
London Scalping challenge. Uh, I need to, I need to hear from you folks.
If you are keen, if you trade the London session,
if you think you're pretty good,
we're gonna do a bit of a challenge to see who is one of the best
scalpers out there for the London Open. Uh,
so if you guys are scalping the London Open and wanna come on the channel,
then hit me up, Support trading nut.com. Uh,
your final links over there at Trading Nut as well. Now, last but not least,
we have confirmed a new sponsor. It's Fidel Crest,
and they will be coming on the show very soon. So please go and check them out.
I'll put some links, uh, in the show notes description.
They'll be over there on trading nut.com as well.
So please go and check them out. Give them a warm, warm welcome. All right,
folks, here we are, episode 200. Let's get on with it. All right, folks,
here we are on trading. We've got Steve Ward in the house. Uh,
Steve is a Trading mindset expert,
and I'm gonna let you tell us all about your background and how you got to doing
what you do. Um,
but I was re you were recommended by Tom Hogar who came on the show,
and we've just said that this epically long,
but yet fantastic episode where he dove into a lot of mindset stuff.
So he recommended you.
So I could only imagine that it's gonna be like 10 times better than, than, um,
what we got with, with, uh, with Tom. Probably not. I mean, that was,
that was pretty awesome. So if it is, that's fantastic.
But do you wanna start off with, um,
telling the guys a little bit about how you got into what you do now and, and,
um, I know it is quite a fascinating story.
Yeah, sure. So my initial work in,
in the world of psychology was a, as a sports psychology coach.
So I was working with athletes and teams elite level, so Olympians,
international athletes teams in about 33 different sports all over the globe.
Did that for a number of years, and then just really through a random encounter,
uh, with somebody on a, on a a sports psychology course,
was asked to come and see if I could, um,
provide sports psychology coaching, but to improve trading performance.
This was about February, 2005, so quite a long time ago now. And the,
the basic background from their side was they were very forward thinking.
They had a, um, someone in house who was a sort of the head of performance.
He was an ex-professional tennis player. He was looking at what they,
what they were doing around trading performance. And they helped,
had great setup, great systems, beautiful office, uh, in-house,
cafeteria, serving healthy food.
All all the things that you could imagine it would be useful.
What he observed was they spent a lot of time talking about things like
confidence, anxiety, worry, fear, stress, pressure,
but they were doing nothing to train it or develop it. Uh,
and often people coming from a, from an elite tennis background,
he could see that was an obvious gap, uh, in performance. So, uh, we met,
had a few conversations and then basically invited me in.
We ran some workshops for the, for the traders initially,
I guess with a sports slash performance slant. And then we had to try and,
I guess translate that into, um, trading, uh, context. I had, at this point,
I had literally zero knowledge or experience of trading at all. So, uh,
it was very fresh for me. Uh, and in the end I was asked to, to work there, uh,
on a contract three days a week. So I did that for about a year.
That gave me more time then to, to learn about trading, to sit in on the,
on the grad training program, do some trading myself. Um, and yeah,
then developed things, I guess more specialized and, and more specific.
And then really from, from then onwards,
I think the last bit of sports work I did was probably the winter Olympics 2006.
And since then, it's all been, um, trading investing related.
So clients now are prop trading groups, commodities, trading houses, banks,
hedge funds, asset managers, energy trading firms, really the whole spectrum,
again, all over the world generally from sort of, I guess,
graduate and new traders all the way through to some of my clients who are, uh,
sort of like the market wizard level, um, you know,
real high level elite traders, um, whole spectrum. So it, um,
and then somewhere in the middle of that,
I also got the chance to do a bit of work with professional poker players on the
European Pro tour, which was a, again, it's a, a nice, um,
insight into a related field, high performance, probabilistic decision making,
risk taking, but was obviously a slightly different lens to, to view it from.
And, and what did you find, um, uh, easiest to find results in?
Was it trading, poker, or sports?
Uh, I think, well, I think none of them was easy to find results in,
that's for sure. I think trading for me, I find more complicated.
I think there's a lot more, there's a lot high level of uncontrollability,
you know, it's very rarely the same.
If you're a swimmer and you turn up to a swimming event,
the pool's gonna probably be 50 meters, uh, eight lanes long,
the lane to the same width. You know, you've got standardized lane ropes,
you're gonna swim. If it's a 50 meter butterfly,
you're gonna swim 50 meters butterfly,
you're not gonna swim 47.2 meters of front crew. So there's a, you know,
in some events tracks like swimming, there's a high level of controllability.
Athletes who I was working with had very common challenges,
almost not methodical,
but there was almost like a formula when people came to you,
you could kind of work out pretty easily what you needed to do. Um,
what I found out in trading particularly was there's a whole number of reasons
that can be going on at any given time, why a trader may or may not have made,
you know, a good decision or not. So, and I still find that really intriguing,
just the amount of forces that are being applied at any given time that might
sway us one way or the other. So, um, I mean,
I've been doing it 17 and a half years plus now, uh, and, and I still find it,
you know, probably out the three areas,
I still find it the most fascinating and intriguing.
Right. And, and so I mean, like,
I've actually had quite a few traders on the show that have used sports as like
a sort of way to make their trading successful. How did you,
how did you sort of tweak what you were doing with the,
in the sporting world for the trading world to, to make it relevant?
And where did you see the commonalities lie?
So I think for me, what was useful was, at the time,
a lot of the trades I was working with initially,
a large proportion either had come from a sporting background or had an interest
in sports. So there was a, a relatability,
a connection that kind of made it easier for me.
But I think themes around, I mean, obviously competition, particularly for the,
for the younger guys I was working with early on, that was really important.
Things like confidence I think is a theme across all high performance.
Then concentration focus versus distractability
resiliency, particularly, you know,
how do I deal with things when they're not going well?
That's obviously a very important skill in trading where, you know,
you could be losing, um,
or some of my best traders are losing around half of the time. So,
so I think they're probably some of the key themes that really important.
Outside of that, I'm also a big proponent of, of lifestyle, so the physiology,
how we look after ourselves. And again, that has a high level of relatability,
I think, early on. So sort of a mind body approach to it,
to improving trading performance. Um,
but then trading it isn't a sport because it is, you know, it means sport often.
You have a season and a off season, you know when the match is gonna be played,
you know, that that's the moment you've gotta to prepare for.
So trading's not like that, trading's like this ongoing competition, um,
almost 24 7 for some people. So,
and we don't know when you're gonna have to really, you know,
when it's gonna be quieter or busier when it's gonna be more volatile or less
volatile. So I think it's, there's a whole,
there are some similarities maybe in terms of some of the attributes that are,
that are useful,
but there's a whole world of difference between what's required, um, as well.
So, and that's really, I guess, you know,
the last 17 years is me being refining, starting with the base of,
let's call it performance psychology and then building upon that all the skills
required for the nuances, um, of trading, which also, you know,
is about decision making under conditions of uncertainty.
So that's really what the core of it's all about.
And that's where things like behavioral finance have been quite useful. Um,
I've used a lot of neuroscience, um, in there as well. So yeah.
So some similarities, but, but also very different. Mm-hmm. .
And, and like you say, you were sitting down with a new trader at,
let's say they're at a prop firm or something like that. Yep. What would it be,
what would be the first thing that you would be trying to find out from that
trader and how would you go about doing that?
Well, the first thing that always interests me, um,
about anybody doing anything is, is why they've chosen, chosen to do it.
So that's always my starting point, just kinda what brings you here, um,
what is it you're looking for? Why this and not something else. So that,
that's always my first point. And then, I mean, when I meet any of my clients,
we normally spend the first hour or two. I'm just curious about, you know,
kind of why they're here, um, what brought them here,
what was the kind of the path, um, their sort of biography, how they grew up,
where they went to university or if they didn't go there, what they did instead.
And that all intrigued me. So kind of people's trajectory into the markets,
uh, expectations, that was always curious for me, you know, what,
how did they expect it to be going forward. And um,
the insight I had quite early on was that for most people, the feedback was,
it was harder than I thought, and it took longer than I thought.
So people's expectations were, you know,
maybe they've come from a sports background or they've played poker or they've
been to kind of a really top through a top level academic, uh, trajectory,
and they have an expectation they'll kind of come into the markets,
pick it up pretty quickly, start making money early. Uh,
that's very rarely the case, uh, for many people.
And actually if they do start making money early, it's often a curse.
It's often one of the worst things that can happen. So yeah,
so I think that that's kind of my initial,
I guess I'm just curious about them as a person initially that that's my key
interest and then we'll maybe get into more, you know, the trading and so on.
And then the first stage is really, for me, it's more about, um,
building competence and building just general skills and knowledge more than the
psychology. Um,
that probably has a bigger part to play once people start trading live.
There's some early, early stage work to be done that's useful.
But I think for most people, they don't even understand the,
the relevance of psychology until they've been into the markets for a while,
made some money, lost some money.
And is there,
is there any sort of information you need to glean from them other than,
you know, trying to get their background in terms of, um,
giving you a starting point as to like, okay, well this guy is, you know,
let's say on a scale from one to 10, this person is a, is a seven,
so they don't need a lot, versus this person is a three, they're miles away.
Um, is there anything you do or use to, to try and entertain it?
Not, well, I don't do a lot of work cam with,
with newer traders at that level. So by time I'm seeing,
if I'm seeing someone for coaching in the last probably 10 years
plus, they will have a, they'll be,
have been in the markets for at least two years.
So I don't generally take anybody for coaching who's not got, you know,
a good level of market experience. I don't,
I don't believe that I will add massive value, um, up until that point,
if I see them in a program somewhere before that,
we're probably doing some group training,
probably some skills training or just creating some stuff around the process.
But the one thing that I do do quite early, which I think does,
which might align to your question,
is we will do some psychometric testing and we'll look at people's personality
profiles and then we'll utilize that for two, two reasons.
One is to enable them to get a bit more insight into who they are and what their
preferences might be,
but also so that as they're moving through their developmental stages early on,
we can start to maybe shape the markets that we, that they're put into.
And it might also help us to shape the approaches and their strategy so that
they align with their personality preferences. So, um,
for a lot of people that's very much trial and error. Um, I think the,
the danger for some people is, particularly in the retail world,
they gravitate towards a person, you know,
a well known coach or mentor and they try to learn it their way,
which would be like, you know, everybody gravitating towards, you know,
someone like say Sain Bolt, if it simple, we all wanna be sprinters.
The reality is we are not all gonna be great sprinters and there might be
somebody else somewhere else, you know,
mo farra in the marathon camp where some of us went over to him,
we would do significantly better.
So we are not all gonna be able to trade in the way that the, you know,
a certain mentor is gonna be. And this is true institutionally.
So if we can understand those preferences and where our strengths are and where
our interests are and our values and all those things align,
it can help us to maybe earlier on, get people onto sort of the right track,
therefore increasing chances of success.
Right. And, and just as a bit of a sort of side note, I mean, have you had like,
I mean, you obviously dealing with guys who have been trading for a while, they,
they've got, you know, I'm guessing most of them are,
have either been profitable or are profitable traders, you know, cuz they're,
they're doing it for a living. Um,
what's the biggest success story you've had in what you've done where you've
sort of come away going, man, I've, you know, this is something, this guy,
I saw him, he was in this, this position, and after working with the person for,
or, or even the firm perhaps for x number of months, years,
you've managed to get them to achieve this. Have you,
have you got any sort of good success stories like that?
Um, well thankfully I've got a number. I mean,
obviously I can't share them in too much detail. Yeah, of course. Yeah. Um,
I've actually had a guy recently last year, hedge fund guy, uh, young trader,
young hedge fund trader. Um, and he's,
and it ties into the personality thing cuz he's been struggling to kind of find
his way of, of, of trading and he's had a,
a senior PM working with him and they've got opposing styles.
So he's trying to find his way and he's got a particular way of trading that he
likes to, to do and where he's best,
but it doesn't align with what a senior PM thinks he should be doing.
So they've been having this conflict ongoing anyway,
during the first part of the coaching,
we managed to get enough confidence in, in the, the trader I was coaching to,
to really to do it his way and,
and take that leap of faith and just do it your way, you know,
and then see what happens. And that got a good results early on.
Therefore he got a bit more buy-in from the senior pm He had a number for the
year he wanted to make, which was a, which was a good number. Uh, which he, he,
he did multiple, um, xs of, um,
predominant is a result of just really trusting in himself,
being himself, not trying to be somebody else,
but having the confidence to do it in his own way.
This year he's continued to grow from that.
Obviously we've had some interesting, uh, market conditions. He,
in his mind has got a number, I can't say what it is,
but where he sees the very best of the best operate.
And he at the moment is a very small margin away from achieving that this year.
And again, it's multiples of, multiples of what he made last year. Right. Um,
and again,
that's been this increasing competence and growth in who he is and doing things
as, as he would do them. Um, and,
and a really strong commitment to developing
himself as a trader. So as much as we are seeing the, the,
the exponential growth in p and l embedded into that is a lot of hard
work. You know, kind of really being curious about him,
how he does what he does, how to do it better doing the work. Um,
so yeah, so that's probably been a top and tail two interesting stories. So.
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Are you able to tell us what sort of fundamental things you are able to
implement that helped make the shift for that trader? Yeah.
Well, I mean there's a drawdown is, is um,
is a term that's common for trade.
So everyone kind of knows what it is and probably everyone's been through it and
everyone experiences it in different ways and for different reasons.
So one observation, I mean, often get asked by people, you know,
kind of what's the formula for getting through drawdown or what's the formula
for, you know, holding winning traits for longer. There is some commonalities,
but everybody's unique. So the, you know,
when we experience something in the market,
we're experiencing the same phenomena,
but for different reasons and in different ways. But I mean,
some of the things I'll always come back down to are, first of all,
you've gotta accept a situation you're in. You know, so if you're losing money,
there's no point trying to deny the fact you are losing money.
And there's no point being in a situation where you're just languishing and
hoping that you're gonna start making money again soon.
So it has to be kind of an acc a realistic acceptance of the situation.
That's my starting point. You don't wanna be here, you know,
it could be pretty dreadful, but this is where you are at. So that,
that is the anchoring point they may have already done. And if not,
we might do, or the question I would ask is, what's changed?
So we'd do some reflection.
Cause if you were making money and now you are not and it's outside of the,
the normal range, the question is, well what's changed?
And it can only be two things really in simple terms.
Either the market conditions have changed,
which it is probably in nine times out of 10 situations or
they've changed, they're doing something differently or a combination of both.
So we wanna get some insights into maybe what has changed cuz that will then
determine in terms of action going forward, what we might need to do.
Is it work with the trader? Is it work around, you know, them internally?
Is it work, work around adjusting what they're doing to the market conditions.
On top of that, we've also gotta help to kind of deal with the, um,
the confidence slash resiliency of getting through, um, the tough period.
And that varies again for different people.
Some people are are pretty good at getting through these situations,
other people are less so. But the things I've been looking at is, you know,
can we, once we've accepted a situation, can we see it in a more useful way?
So could this be, it's not gonna be a period of, of, um, of earning potentially,
but it could be a period of learning and reflection. In fact,
I would say for most traders,
the majority of learning and development is done when they are in draw down or
having setbacks. Very little learning and development goes on.
Traders are doing well and making money, they're just too busy just carrying on,
hoping they're gonna keep making money.
So it's a really key period where traders can improve themselves,
make their process more robust, make them more robust. Um,
it might be there having particular thoughts and the emotions that are showing
up that might be troublesome.
So we'd also wanna do some work around how we do that.
But we're always keeping the baseline is what's the behavior that you need to do
in this moment or today or tomorrow that's gonna be effective in moving
you forward. Uh, and that's the key. So again, it's like a, you know,
each a drawdown is, is a contextual shift when you're making money,
it's one context.
So behaviors that are useful are different to when you're in draw down.
So we've always gotta be thinking about right in draw down what's important,
what do I need to focus on, what do I need to be doing moment to moment,
day to day. And we've gotta keep the focus on that.
And then what happens to many people is even if they know that it's the thoughts
and the emotions that are showing up are getting in their way.
So we've gotta be clear about what we are doing and be managing the experience
around that so that we can keep doing what we're doing ongoing.
Which for some people,
just down to the nature of the drawdown could be for a significant period of
time. I mean, I've had traders go through drawdown for, you know,
getting close to a year and,
and in some cases probably beyond before they come out of it fully.
So that's tough. That's really tough. Yeah, it's tough. It's tough for a month.
And was this traders a particular drawdown and we'll we'll sort of move on after
this. Was it due to the market having changed or was it other external factors.
Market changed, followed by his,
an unhelpful reaction on his side to try to correct it?
Right, right.
So, so, and this is, this is a key thing. You know, the,
the a market change or any kind of event that's market driven is outside the
trader's control.
So all the trader can control is how do I respond to,
and I use that word intention as opposed to react.
So how do I respond to the events that are going on in the market?
And over time,
what I'm trying to do with my clients is essentially a bit feel like a playbook
of, in all the different scenarios you might fail, find yourself in,
in the market.
We want a playbook for responding effectively that suits you as an
individual in that situation. So that as they progress through their career,
whether they are having, you know,
a a a long extended winning period can be equally as dangerous as a long
extended losing period. You need a playbook for both. Uh,
when volatility suddenly increases, what's the playbook? You know,
what are you gonna do that's right for you in that situation?
It's gonna be different for all people,
but each individual trader needs to think about the context they're gonna
encounter in the,
in the markets and what their own individual response is gonna be to that in
terms of behavior, what thoughts might show up, how I'm gonna manage those,
what emotions might show up, how I'm gonna manage those and so on. So,
and I think that's what experience gives you,
providing you to have that experience is, um, combined with intention,
reflection, and development.
Mm. And and I speak this why people reach out to the likes of you to,
to try and get their external view on what they're doing. Cuz they just can't,
you can't see the word for the trees, you know, if you were at the coal face,
right?
Yeah, it's difficult sometimes, you know, there's a, there's a lot going on and,
and the reality of trading as well, um, ironically,
and some of my clients sit on trading floors of another 150 to 200 people is it
can be very lonely. So when, when you're having a really tough time, you know,
I've got most of,
I would say probably most of my clients won't be talking to their partners at
home about it.
They won't wanna be talking to friends outside of their trading social network
about it.
Very often they don't wanna talk to their friends within their trading network
about it. So that, so a lot of people don't have, um,
a person who understands what they do and the
challenges and who they can open up and say,
and this is how I'm feeling about it, this is, you know,
I'm struggling with this or I need some help with this. Um,
it's getting easier for people as certainly from 2005 to now, um,
it's a lot. There's probably more people available,
but trading inherently is still quite a, a lonely, um,
occupation for many people. So it, um.
Yeah. So, so reaching out to someone like yourself is, is a way forward now, um,
let's, we've had a few examples of individuals and you know, how, uh,
people you've dealt with have overcome their, you know,
trading psychology and mindset issues.
Let's dive in a little bit more around sort of the general approach of,
you know, trading, uh,
mindset issues and how to resolve them and why we have them.
And maybe starting off with like, for example,
the human condition and what is wrong with us? Why can't normal human, uh,
behaviors or emotions help us be successful in the markets from the,
from the outset?
Well, nothing's wrong with us. I think that's a starting point. Uh, you know,
all humans are fallible. I think George so talks about fallibility. So,
you know, we're all fallible. Um, and I, but, but, but, but we are humans.
So I think, I think the starting point is we have,
we have to accept the fact that we are human. Uh,
and there are some great things about that. Um,
and of course I think there's great, there are some challenges to that as well,
which we have to learn to, to manage and navigate.
So human condition really is about the, um,
the events and circumstances happen to us in, in sort of the,
the journey of life saying we're born at the end, we die.
And there's all the stuff that goes on in between that learning highs, lows,
good, bad emotions, thoughts, sensations in her body,
all of that is part of that human condition,
which essentially we could also kind,
I guess micro package into probably the trading condition, which is a, you know,
there's a,
I start trading the birth of me as a trader at some point I give up trading the
death of me as a trader as such. And then there's all the highs, lows, emotions,
thoughts that come with that. What happens in the,
um, trading condition, particularly as a reflection of human condition,
is that when we are taking risk under conditions of uncertainty,
often many of the ways in which we would want to think that would be
useful for us may not be what comes natural as part of the human condition.
So for us, in evolutionary terms to survive and to thrive,
we also adapt ways of thinking and feeling that biologically primed are
useful for us. And often lots of those core instincts, um,
and behaviors are not the same ones that are gonna be helpful for us in the
markets.
And that's what I think behavioral finance and behavioral economics has really
kind of been useful in urban kind of to, to understand. Um,
so what it means is, uh, much as in life as we go through life of humans,
people need to shape how they think to perform well in their, you know,
as partners, as sons parents. Uh, in our roles in trading,
we have to do the same thing. You know, as you go into the markets,
you are bringing in your current set of beliefs, your, you know,
your mindset and how you do things.
And some of those actually based on your prior experiences.
So I've had one trader,
I worked with a young trader who was a phenomenal trader from a very early part,
had played chess to a high level as a youngster and had played poker,
uh, through university to a very high level. And what happened was,
as he came into the markets that shaping in his early,
in the early life with two different tracks had enabled him to come into the
markets with a mindset that already enabled him to understand
lots of what was required for success was kind of already in place.
Other people are coming in with none of that at all.
So we all gonna come into it not just as humans, but as different humans.
So we're gonna find something easier and or harder.
But then as we go through the markets,
the goal is to really start to understand yourself as a risk taker
and decision maker under these conditions of uncertainty. And then to try and,
I guess grasp hold of some of the common themes and, um,
approaches that can be useful for all people,
but also to understand your more individual nuances.
And essentially the goal is to shape a mindset and a set of behaviors
that enables you to perform well under market conditions.
And there'll be some commonalities and some differences amongst people, um, as,
as you go about doing that.
Okay. Okay. I think, I think that sort that answers the question. Now,
interesting.
You say somebody who plays chess were from a young age was able to be quite
successful. I mean, I've heard that before where there's,
there was another podcaster, um, quite a famous podcaster,
I can't remember his name off the top of my head, but anyway,
he was a chess sort of genius when he was a kid.
Ended up working for a hedge fund then like,
became sort of semi-famous and started podcasting. What, what,
what do you think it is about people being very good at chess that allows him to
be a, you know, have a better chance of being successful at trading?
I'm not saying chess per se, um, but I think, you know,
chess is a strategic thinking game where often you are also thinking
about 1, 2, 3 moves ahead of the games and not just what's gonna happen right
now, but I think the idea of strategy of thinking ahead, you know,
you're playing against another person,
you're trying to understand that person and what they might do if I do this,
what are they thinking they might do this and what will I do in response if you
think about it in the markets? Yeah,
and I think Paul Truda Jones talks about this a lot. You know,
if you think about the markets as a collection of people and if, you know, if,
if, if the market is thinking this, what will the market do? Not just,
here's what I wanna do with my strategy, but you know,
who else is in the market? How are they thinking about price?
And if they're thinking about price like this, how are they feeling?
If they're feeling this, what might they do?
And therefore where will price go and what does that mean for me?
I think once you get into that type of thinking, that's really useful. But,
you know, chess is a, is a, it's a cognitive thinking strategy game, you know,
which I think if you align it into some forms of trading, gives you an edge. Um,
some traders don't need to be super strategic. Some traders are very feel based.
Um, so that, so I don't think all chess players make great traders,
but I think chess can give you some skills that will enable you to be a good
trader. But chess combined with poker,
which is a risk taking game where you are making decisions and there is some
uncertainty and you are thinking about probability and essentially in poker you
are losing a lot.
And this is one of my key insights is what poker players are good at is they're
good at losing or good poker players are good at losing, they're good losers.
Yeah. And this will tie into what, you know,
what Tom talks about with his book and I'm sure came out and the podcast about,
you know, the best loser wins. You've got to be good at losing. And in fact,
I literally having a conversation yesterday, uh, with a,
with a hedge fund client and um, we'd been together, uh,
with some other people from the firm on an offsite recently.
And he was saying about how it was interesting that lots of people he was
talking to on the offsite, um, colleagues of his who had come from, um,
high level sports backgrounds or those that have played poker,
his insight yesterday as we were talking about dealing with losses was they had
an advantage cuz they'd had years and years and years of,
of learning how to lose,
how to deal with the loss and how to kind of get back in the game after the
loss. And he and he,
he kind of had this realization that having not come from a poker or a sports
background, if he could have changed something about his life,
that's one thing he would like to have had was that opportunity to learn how to
be a good loser before getting into the market. So I think, you know,
chess poker combinations quite interesting.
We could maybe add sport in there again now anyone on their own doesn't
determine that you'd be a great trader.
There's still many nuance skills to learn,
but I think they can give you something useful that might just give you a little
bit of a head start. Mm-hmm.
. And I think with the,
the other thing with poker is obviously you're losing money as well,
so it's almost exactly.
Your own money. Yeah.
Often. Yeah, exactly. So, um, what about like, I mean there's a sort of common,
I suppose issue with, with people coming into,
into trading is that they know what to do, they've been taught what to do,
but they don't seem to be able to do it.
So there's that sort of gap between the two. I mean,
can you talk a little bit about that?
Yeah, so I think, I think everyone who's traded,
you can think of multiple times where in a given situation, you know,
you know you should stay in the winning trade or you know, easy, you know,
you should get out of a losing trade and for whatever reasons you don't. Uh,
now there are some times when actually, and this is true for skilled traders,
where you wouldn't do what you originally planned to do so you would flex and
then it gets even more difficult cuz now you've gotta work about when do I stick
and when do I flex? But for most people at the basic level, uh,
there can be a number of reasons why that gap exists.
So for some people the gap actually is just competence and knowledge. So they,
they, they know what they want to do,
but actually that knowledge isn't well founded enough to really for them to kind
of trust in or believe or act upon it. So,
so there's not a high enough level of competence, uh, to really act on it. So,
but let's assume once you've got some level of competence,
you've got some level of strategy, which is, which is effective. Um,
why are we not sticking to it often?
It's because there's some kind of change in our state when it comes to actually
make the decision. So, you know, mentally or emotionally or physiologically,
physically, um, our state is changing and therefore makes it harder,
um, to do the behavior in the reality. Uh, and we see this all the time here.
We see in sport, you know,
taking a penalty on the training ground is different to doing it in a World Cup
file in front of a hundred thousand people in a stadium and whatever, 20,
30 million watching it on tv. So, you know, when we get these changes in our,
in our physical, mental emotional state,
it does change changes our perception of what we're seeing.
It changes how we feel, uh, it changes how we might then react. If we go into,
uh, if we feel threatened and we go into fight flight response,
that's gonna change our reactivity and what we think we might want to do,
then we've gotta layer into that things like ego, which can start to play a,
a role, um, so that, you know, uh, our, our mindset,
the thoughts that might show up in that moment, um, as well as emotion.
So a whole number of forces can be applied that now make it more difficult. Um,
and I think in experienced traders they learn to manage that
more effectively and they're used to it. You know,
if you have a a constant stress, you can buy exposure,
familiarity become, you know, conditioned to it.
So it's often harder for newer traders, but also, you know,
if you're taking huge amounts of risk greater than you would feel comfortable
with, then all of that response becomes increased, makes it even harder.
If your risk is more moderate, if the consequences are lower,
you're gonna have less stuff showing up that you've gotta kind of work with.
So it's really, again,
it's about acknowledging that it is gonna be a part of the trading experience,
that quite often there are gonna be times when you will know what to do,
but for thoughts, emotions, sensations in the body, urges,
impulses are gonna show up and you need a toolkit to be able to manage it when
it shows up, essentially what you wanna do is reduce how much stuff shows up.
That's where you need a good process. You need to be competent,
you need to manage your risk well, kind of good solid trading behaviors,
a bit like a funnel.
So reduce what shows up and then be skillful in managing what shows
up and what a lot of people try and do is they want to get rid of or they want
to avoid, um,
what shows up rather than try and almost like embrace it and work with it. And,
and for many people the attempts to avoid or control what shows up in these
moments is more problematic than what shows up. Um,
and that's often cuz people have been mis misled, you know, things like,
you know, trade without fear, these kind of things, um,
which I personally don't believe is a, is a useful, um, paradigm.
I think people should embrace that, you know,
anxiety and fear are gonna be a part of the experience and then just learn to
manage it. Um.
And so, so what sort of example would you give to,
to somebody your coaching around trying to embrace this, uh,
thing that appeared at the wrong time? ?
Yeah, well, well the thing for me that is, there has to be a willingness.
If you're gonna go into trading,
we'll do a metaphor first and we'll get back into trading. If I want to,
to start, if I wanna run a marathon for example,
it's 26.2 miles. And if I'm not, if I'm not, you know, a trained runner,
I've gotta do the training to get to the point that I can run 26.2 miles,
then I've gotta run the 26.2 miles.
Now anybody with any sense of what that takes will know that it's gonna be hard.
It's gonna take a lot of dedication and commitment and it's gonna be massively
uncomfortable and at times quite painful and miserable. So you've got to have a,
a kind of a combination of commitment to want to do it and the willingness to
embrace what comes with it. And that's the same in trading. You know,
once you get into trading and you've been in it for a while and so you
understand a bit better,
you have to have a point of real realization which goes, this is how it is,
you know, it, it, it, i, i dunno many traders that like losing that some are,
some are better at losing than others in terms of they can deal with it better,
but I dunno, people that like it or want to do it,
so stuff is showing up. Um, holding onto winning trades equally as difficult,
you know, getting the sizing right, uh, pulling the trigger after a losing run.
You know, all these things are quite challenging.
You've just gotta get better at them. Um, but if you try and avoid them,
you can't get better at them.
So the only way to get better at them is by doing them.
So that's gotta start with a commitment to,
I'm gonna put myself into these situations and I'm willing to do that.
And almost like, um, for lots of my clients as part of their preparation,
they'll do a piece where they'll go, Okay,
what am I willing to experience today in order to trade at my best?
And that'll be okay. I need to be willing to, um, have to maybe manage my ego.
I'll have to be willing to manage the doubt that might show up when I wanna put
on a trade. I might have to be willing to, um, deal with, um,
the fear of missing out that might show up today. So I think, you know,
starting the trading session almost with a reminder that, okay,
it's like an athlete, you know, if I'm gonna do a hard run today,
I would start off with this is a, you know,
a five mile fast paced run at maximum heart rate close to it.
It's gonna be really painful.
Do you know what I'm willing to experience that in the service of moving
closer towards my goal and being the athlete I wanna be.
And I think traders need to have that same mentality.
If we're willing to experience the discomforts that come with trading,
we will put ourself into those situations so we can learn how to cope with them,
which is massively powerful.
But also we start to change our relationship to what shows up.
We start to change our relationship to the thoughts that show up to the
emotions,
to the sensations in a way that enables us to actually manage it and navigate it
more effectively and over time to be more consistent with what matters,
which is the behaviors underneath all of that.
Because it's the behavior that makes or loses you money,
you've gotta press the trigger or not press it. That's the behavior.
The thought or the emotion doesn't make you or lose you any money.
It's what you do while you are having the thought or the emotion.
So that's what we need to learn how to manage. So, uh, yeah, commitment,
willingness, some acceptance, and then just learning to manage, you know,
some of the sort of the finer techniques would be about how,
how we manage the thoughts and emotions that show up.
But you gotta be willing to accept it and embrace it. You've ch to my clients,
I go, Look, you've chosen this. No one's making you be a trader.
You've chosen this profession and you knew, you knew it was gonna be tough.
Therefore be willing to accept what comes with it, embrace it.
It's interest. Yeah, it reminds me of what, um, Tom was talking about when,
and I'm pretty sure he talked about it on the show,
about visualization around before going to a trading session. So like, you know,
sit down, visualize this situation, you know, the trades going against you,
you're in draw down, um, or you're in a winner, you're holding onto the winner,
you're keeping it and it goes against you and you take the break even,
all these sort of things. Yep. Do you,
is this something that you're a proponent of in terms of trying to get the
people to that point of embracing something as opposed in a quicker manner
as opposed to just having to go through the experience and I suck it up,
which would take a long, longer amount of time, I guess.
I'm guessing. Yeah, definitely. So, definitely yes. Um,
so visualization or imagery, mental rehearsal,
whatever people wanna refer to it as is very powerful because neurologically
the brain cannot recognize the difference between a kind of a mental simulation
and a real experience. So the neurological level, it's the same. Uh, and,
and the,
and the way of kind of making sense of that is think about a nightmare when you
have a nightmare, It's an imagined experience, but you could wake up, sweating,
feeling the sensations of fear, heart pounding and so on. So,
so we can use imagery to our advantage in training. And, and this is one of my,
I guess what mental training practices in many ways,
but it is useful in that way as Tom utilizes it, which,
and as I would do with my traders in terms of if we know the sorts of situations
that we wanna kind of be more willing to, um, embrace and accept and work with,
we can rehearse them.
And what that does is we can speed up the process of exposure
and skills training because it might be, let's say for example,
there's one situation a day where I kind of feel uncomfortable.
So I'm gonna get five practices a week, 20 over the course of a month,
but via visualization,
I could do five practices a day or 10 practices per day.
I could get 50 done this week so I can speed up.
Because every time we visualize, as long as it's intentional and focused,
we get a little dose of the physiology of the experience. So we, we, we get,
we, we feel it in the body,
it's visceral and that it's a bit like an inoculation.
It just gives us that little dose of it that we can start to inoculate ourselves
against it.
But we also get to rehearse the behavior we want to do whilst we're feeling it.
So now neurologically we're building the mental,
the neural pathway to enable us to do the behavior while we're having the
feeling.
The key thing about visualization is many people wrongly
visualize, um,
being in a situation that's uncomfortable and they see themselves being icy,
cool and calm and doing the behavior.
And what happens then is in the reality they're not icy,
cool and calm and they don't do the behavior because what you need to visualize,
you need to visualize it as it's going to be.
So if I'm in a situation where let's keep it simple,
I need to take my stop loss at a certain level,
I need to visualize the market moving against me.
Price is coming down towards my stop loss. I need to visualize,
I need to imagine what's gonna be showing up in my mind.
I need to imagine what's gonna be, what I'm gonna be feeling in the body.
I need to make it real.
I might then also practice how I'm gonna cope with that so I can practice my
coping skills in my visualization and then it ends with me exiting
the trade. But if I just visualize price moving down, everything's good.
I'm not worried about it at all. I feel cool and calm and I,
and I get out of my trade. That isn't the connection.
I'm now practicing the wrong experience. It's not gonna be that way way.
So we want and we want to rehearse the discomfort for, um,
realism and transference,
but also cuz that's where we get this little dose of exposure.
We get more familiar with the discomfort and we started to getting more
comfortable with feeling uncomfortable. And one, one trader I coached, um,
two years ago, a massive turning point for him, um,
was when he had this realization that, Oh,
discomfort is normal in trading. And I was like,
perfectly normal. And he is like,
I've been trying to avoid it for like seven years And he is a good trader. Yeah.
I mean now he is a phenomenal trader. Yeah. But so, you know,
just that realization, this is part of the experience in itself. Yeah.
Perfectly normal. You know,
if you've got a big position moving against you that's gonna feel uncomfortable,
it shouldn't fit. Why would you be icy, cool and calm about it?
It makes no sense. This is about understanding, you know,
I'm a human in this situation.
A lot of what shows up probably shows up for most people who are human and who
are traders and therefore is probably normal.
And then I just need to work with it. Can't avoid it. You can't, Well,
you can avoid it. You can avoid it by not trading. Mm. That's how you avoid it.
Yeah. Um, but that's not useful.
Yeah. Yeah. All right. We'll go through a couple more, um,
things here before you wrap up. So what about the, the role of luck in trading?
And I, I saw this in one of your videos and I didn't get around to watching it,
so I'm interested to hear what you've got to say on that subject.
Well, the, the formula for trading as it is in, in any, um,
point in most performance sports, I would say sport is a performance activity.
Sport would be the same. Poker the same is skill plus luck equals outcome.
So when you get an outcome on a trade, you, you know, you win or you lose,
that is gonna be a, um, result of your skill.
Um, plus, um, any, um, luck, which is,
um, essentially, you know,
events or circumstances which either gonna go in your way or go against you, um,
outside of your control, which are inherent in the markets, you know,
randomness, um, you, you can't remove it. There's, there's luck in sport,
there's luck in poker, there's, there's luck in trading, there's luck in life.
And, um, Annie Duke talks about this I think in her book, um,
thinking in Bets where, you know, she says the only two things, uh,
that kind of determine how your life turns out are, um,
luck and the quality of your decisions. And the, you only control one of those.
And I would say that's completely the same as well.
She obviously got hers from poker, which is her background.
And I would say that's the same for traders.
The only things that we can control in trading is the quality of our decisions,
which essentially I would say is what trading skill is. You know,
So it's the process of making good quality decisions on a consistent basis
under conditions of uncertainty. That's the skill. Then there's the luck,
which is the variance which will lead to the outcomes you get.
And I think if we don't acknowledge that,
then psychologically it's unhelpful because we might start to become over
confident that our results are purely down to us.
And also I think on the downside we have to realize that sometimes, you know,
you will get, um, outcomes that you, that you don't want, um,
that are only a result of luck and variance and randomness. You know,
and this is why in poker, you know, the variance is so high. It's a guy, um,
Russo and Shoemaker wrote a book called Winning Decisions.
I have this really nice little matrix,
which essentially very simple is win and lose are the top two,
and then good process and bad process. So on that matrix,
all decisions are, I did a good process and I won, or I lost,
or I did a bad process and it won or it lost.
And the goal in trading and in poker is to do good process.
But some will win and some will lose and some will lose because there's
variance. And in fact, um,
a company called Eccenture Analytics recently did some research with fund
managers. And I think in that study something like only 80,
No,
18% of of the people in this study were winning more than
50% of the time. And the most skilled successful fund manager,
who is a phenomenal performer, was winning 55% of the time.
So that means 45% of the time he's having trade aways doing the right thing,
but losing. So, and that's the role of, of luck, randomness,
outside factors and so on. So we have to be mindful of that and, and again,
accept it.
But we also have to be humble enough to accept it when we maybe are getting
winning trades and appreciate that sometimes we are getting winning trades or
winning runs. And then there's an element of, you know, um,
luck randomness that's playing a part in that as well.
So we just have to acknowledge it.
And then I think what it means is we have to understand then that that piece we
do nothing about, but we've gotta fully invest ourselves into what we can do,
which is the skill piece,
which is process of making good quality trading decisions under
conditions of uncertainty on a consistent basis. And that's, you know,
if we think about in sport,
we can probably think about a sport and we know what the skill part of the sport
is, but sometimes we don't define really what the skill of trading is. And if,
but if we don't define what the skill is,
then what do we go away to practice to get better at? You know?
And we've gotta think about, you know,
the practice of getting better at trading. So what is the skill,
what are the elements of that? And then how do we go about improving them?
Yeah. There's, there's actually a quote at the start of the show, which, um,
goes, the market's gonna do what the market's gonna do,
which is essentially the lack component of what you're talking about. Um.
Yeah. It's, it's the outside, you know, with things that we can control,
things that we can't control. Yeah. Yeah.
You can't control what the market does,
but you can control how skillfully you respond to what the market does.
Yeah. I mean, for me it just reminds you of things like, you know,
the professional footballers or soccer players depending on the world,
you're part of the world you're in, who,
who managed to shoot this ridiculously unbelievable goal, like, uh,
his latter and against England's like six,
seven years ago where he did this weird bicycle kick.
He's never gonna do that again. But it's all Yeah. Down to the,
the skill added to the luck that it actually, he actually pulled it off and,
and you know, and, and it happened. Um, and then golfers getting a hole in one,
they're always going, you know, they're always going for the hole,
but they don't always get a hole in one cuz it same sort of thing. Um.
A lot of outside factors. Yeah, exactly. Again, the more skill for you are,
I mean, you can get beginner golfers who get a hole in one Yeah.
In some of the earlier rounds and you get some pro golfers that never had a hole
in one. Yeah.
Yeah.
Exactly. So, you know,
but we obviously know if we have to bet on one or the other to win a round of
golf, we know who to put our money on. Yeah.
If we have to bet on who's gonna get a hole in one,
we might bet on the pro because they're the pro we expect them to get more.
But the reality is, you know, a relatively, you know,
as long as hit the ball far enough,
even a beginner golfer could get that hole in one.
Yeah. Or, or yeah. Yeah. Or digressing here. But I mean,
if you play a round of golf on,
on say a course that Tiger Woods has played on and you know that he beed a hole
and you pared that hole, you in fact, you would've beat tiger on that hole.
Yeah. Maybe not that day, but anyway. Yeah, yeah.
Yeah. Right. The other thing about,
so I think it's important is this is also true for trading because a new trader,
beginner trader could, like a beginner golfer get a hole in one. Yeah.
Could get, you know, early in their trading experience with very little skill,
but with a huge amount of luck,
get some either a particularly big winning trade or sequence of winning trades.
And that unfortunately can be, um, turn into a horror story.
Cause we can start to, um, misplace, you know, kind of, I guess we can, um,
construe that as skill or knowledge when actually we just got very lucky. Uh,
and I've seen that a few times actually, even in professional trades.
We've had kind of a,
a good run of luck early in their careers and it has problems further down the
track. So again, we have to be mindful that, um, for newer trades,
just cuz you are making money or you made money have some good trades,
it may not be down a reflection of your skill level. Um,
in fact early on it's probably more,
you probably a little bit of skill and quite a bit of luck as you get better and
better,
there's probably a greater amount of skill at play and then luck kind of,
you know, creating the variance on top of that. So, um,
I think that's quite important just to remind ourselves of.
Okay, we're gonna dive into like a,
I suppose a very niche element of trading mindset and then we'll,
we'll wrap up here. So how, how would you get somebody through managing, um,
problems with having a fear of missing out on getting into a trade,
um, taking trades and that sort of thing?
Yeah, it's an interesting one. Fomo. It's, um, so I think I,
I think one of the things about fear of missing out is one,
we need to accept again that it is a part of the trade. In fact,
it's part of life. Life, you know, it's inbuilt into us in life. You know,
it's a Friday night and all your friends are going out and you don't
really fancy it,
but then you hear that everyone's going out and they're going to a certain
venue, it's very hard.
Then even if you really wanna stay in and have a quieter night in,
it's really hard to stay at home knowing that everyone else is out.
They might have a great time,
they're gonna talk about it over the weekend and you weren't there. So,
you know, and, you know, being part of the, of a, of a community and, you know,
um, and not being isolated is kind of all kind of ties into that. So it,
we gotta accept in human condition and in trading condition,
it's there and, and it's normal.
It's not like some abnormal a thing that happens to people. It,
it's part of who we are. Um,
so I think the first thing is accept the fact that it's part of the experience
and be willing to experience it as part of your trading.
Secondly, it can be useful. So fear of missing out is it's, uh,
it's a, it's a bit like a threat based state cause we've kind of got this fear,
but it's a future fear.
And so I think we need to count that, you know,
we need to kind of reframe it to try and manage the, the threat. And I think,
you know, if we've got the belief,
and I had this actually with a client last week who'd been working on this.
And I think if we can come up with some kind of belief along the lines of,
you know,
the market will always give me another opportunity or something like that,
if you genuinely believe, you can't just say it to yourself,
but if you can say it with meaning based on experience,
cuz you've seen it and it's, and it's much more, um, ingrained in you,
if you genuinely believe that the market will always give you another
opportunity, then I think it, again,
it takes off some of the pressure to have to be in the move in the moment,
but also if you do miss out, it reduces the impact beyond that. So I think,
you know, the, the acceptance is key. I think having at the mental level,
some sort of mental framework that recognizes, um,
that you will get more opportunities.
I think you also need to be very clear about what your trading process
is. To have clarity about what is a trading opportunity for me.
Because sometimes FOMO comes from not just you worrying about missing out on
your trade, it's, you know, other people are on a trade or, you know,
obviously social media now, you know, you're seeing things on social media,
so it's nothing related to you what you, maybe not even the markets you trade.
And I see this, you know,
traders are jumping into markets they've never traded before.
Nowhere is it written on their process, anything. Um,
and that's where we need to be cautious is about being pulled away from our
process, what we do well and so on.
So being clear about that and being committed to that is also really important.
And then in the moment, this is true for all emotions.
You need to recognize emotions when they show up.
So you need to be able to notice and often emotions a bit like ripples in a we
on the, on the ocean,
they start small and then they sort of start to build and build and build.
So FOMO might start as a small thought and then it might become this kind of
really powerful urge. So you need to be aware of, of the feeling.
And one of the most useful techniques for dealing with emotions in trading is
not to try and get rid of them or not to try not to feel them,
but it's to notice them when you are having them and to label them.
So you might notice that you're having fomo and you might even say to yourself,
Oh, I'm noticing that I've got the fear of missing out here.
Now once we start to label and we start to name the experience we are having,
it actually reduces the intensity of the emotion.
It gives us a bit of distance away from the emotion such that we are not as
reactive to it.
And it allows us to maybe just consider our response,
um, before we either do or don't, um, engage. So, so yes, I think, you know,
um, accept it, um, form some kind of belief that's useful around,
there's always more opportunities be clear about the process. And then I think,
you know,
in the moment it's just about being aware of what you're feeling and notice it,
name it, label it. Um, and then again, focus in on,
now I know how I'm feeling, what behavior do I wanna take in this moment?
You know, what's the effective behavior?
That's a, that's a.
Great,
except that the emotions not driving the behavior you are having the emotion of
fear of missing out and at the same time you're deciding what the effective
behavior is within that context. Yeah.
Yeah. I like that. I like labeling the emotion when you feel it comes through.
Which I think a lot of people just,
that's probably the biggest issue is the emotion comes through and they never
get to the point of knowing what to do with it. Even if they do notice it,
they'll still let it just flow through and, oh,
I'm now controlled by the emotion.
Well, what a lot of people want do is if it's a,
if it's an uncomfortable emotion, like a fear and anxiety,
an irritation or frustration is they don't want to feel it.
So when they notice it,
they don't wanna feel it and they'll try and get rid of it in some way.
And that's, you know, for example, um,
if you've got the fear of missing out and it's uncomfortable,
people will jump into the trading opportunity because then by jumping into the
market in the short term, the fear of missing out goes away.
So now in the short term, you feel more comfortable,
but you might end up now with the worst trade than you,
than you would've had otherwise. So in the long term, there's a consequence.
Yeah. So there's often a payoff in trading when it gets uncomfortable between,
I can choose to feel more comfortable now in the short,
short-term by doing this behavior, by not taking my stop loss.
So now I'm not inner losing, you know, I haven't, um,
taken the loss so that feels more comfortable, but the market goes against me.
And then further down the line, I feel more uncomfortable.
Or I can take the stop loss now,
or I can not get into the trade now with my fomo,
which in the short term is more uncomfortable, but in the long term,
uh, makes me more profitable. And I think there's a, for a lot of people,
they have to ask us themselves a question,
Am I trading to be comfortable or am I trading to be profitable?
And the reality is, if you're trading to maximize profits,
you also probably need to be willing to be uncomfortable, uh,
more of the time than you might normally like to be.
And that's kind of the payoff, um,
as it is in many things that are worthwhile doing. So. But the but the labeling,
the emotions came from a guy called Matt Lieberman at ucla.
He actually put people into brain scanning machines, FMRI machines,
and looked at what happens in people's brains when you try to resist an emotion,
suppress it, or when you, when you acknowledge it and, and label it, naming it.
And when you try and suppress an emotion,
a bit like holding a beach ball under the water, it takes effort.
And of course if you let go of the ball and he found that in the brain,
they were seeing increased neural activity in the emotional circuits when people
were suppressing, when people acknowledged how they were feeling,
there was a reduction in intensity. A bit like a messenger coming into the door.
I take the message, Thanks very much, message delivered.
That's a nice calm process as opposed to messenger coming my way.
I don't wanna receive that message. I shut the door in your face.
They wanna give me the message, they push the door open.
And now we're struggling together.
And a lot of traders spend a lot of time struggling with their emotions rather
than going open the door, What's the message? Thanks very much. Okay,
now what do I want to do?
Awesome. Brilliant.
And that's where I try and get my traders to, you know,
it's working with the emotions and not struggling with them.
It's awesome. Well look on,
on that fantastic little tidbit there at the very end. Um,
what's the best way for traders to get hold of you?
Uh, professional traders institutional traders, uh,
performance edge consulting.com uk. Um, if you are Retail trader based,
then trade@yourbest.com.
Brilliant. Awesome. Well look guys, um, uh,
we'll put a link in the show notes to Steve's, uh, uh, sites there.
So Steve, thank you once again for coming on. Everyone do remember, um,
hit subscribe, hit like,
click on that notifications bill and click all and we'll see in next video,
video or podcast radio folks that you have at the 200th episode of Trading Dun
and Dusted. So, uh, guys,
if you do want to go and check out that video we shot with Lewis Kelly, uh,
it's, well, it's not a video we shot, he did a live stream.
We've cut out the best bits of it,
piece it together cuz it is a great little bit of educational content out there
to understand smart money, uh, trading and what they do, uh,
to influence price and how you can benefit from it.
So go and check that out on the channel there. Uh, other things to remember,
we've got the scalping challenge. So if you scout the London Open,
you wanna come on the Trading Nut channel, then this is your chance.
Hit me up@supporttradingnut.com.
And the other things we've got is the Robot Lab live. We're basically into the,
in the process of putting that on a demo account, um,
we've got a portfolio that looks pretty good,
we're gonna chuck that up and see if we can confirm whether or not we decide to
go on a prop Trading firm challenge with that bot.
So go and check that out over there.
And if you're looking to automate anything that you do,
then check out the Robot Builders Club. You get the Robot Lab live with that,
and I'd love to see you in there. All right folks, enough from me.
We'll see you in the next episode.