Master Trading Psychology in UNDER 83 Minutes with Rande Howell

0:00 What is the number one psychological problem that you've seen with all the traders that you've come into contact with over the decades? Oh, the number one by any stretch of the imagination is Randy Howell is a world-renowned author and trading psychologist. His secrets in psychology has helped unprofitable traders become millionaires. The successful trader wins by being an expert at losing. And I believe that trading is the perfect selfmastery. If you do not master the self, you are not going to be a successful trader. There, are a, lot, of, traders, out, there, who say trading psychology is What are your thoughts when you hear that? First thing I ask, are you profitable? There's a wonderful thing about trading is that most of us spend a lifetime avoiding our psychological demons. In

0:46 trading, they're going to stalk you. When you're looking at charts, you're actually looking at emotions. The vast majority are not profitable. The trading gods really don't care the success rate of a trader to become consistently profitable. 2 to 3%. And we're moving that 2 to 3% to 30. We have a brain that is about 6 to8 million years old. It's all about survival in the moment. And we bring that brain to trading. We believe that we can control outcome. We believe that we can make things happen. And then you get into trading and you find out that this is a game of probability, not certainty. Loads of people in the trading space say that we need to treat trading like a business. Would you say that's a the wrong thing to do? The truth is is that um trading

1:32 [Music] the number one podcast in the trading space, the fastest growing, and that's thanks to every single one of you. Hey guys, before we get into this episode, I just want to say this is an incredible moment for me directly and for all of you, no doubt as well. Randy How is an absolute legend in this space. When I first started trading almost 10 years ago, I used to see his clips and his lectures all over social media and YouTube, generating millions of views and impacting millions of traders across the world. So the fact that I got to sit down with Randy myself to speak to him and to extract so much value of exactly how the trading mind works and how to

2:18 operate as a trader the right way and to be profitable. It was incredible for me and a huge thank you to Randy. I'm so so happy to be able to bring to you an episode on words of wisdom on how to master your trading psychology with the one and only Randy How. Welcome everyone to the words of wisdom podcast. We are back once again as still the number one podcast in the trading space and the fastest growing thanks to all of you and our incredible guests. And we're on the big US tour still and we're on our second destination in Carolina and we've come here for one person only and that is a world famous trading psychology and performance coach. He has authored many books and you probably seen his face many times that I know I did in my the one and only Randy How.

3:06 I'm embarrassed. Thank you. Thank you. Thank you very much. Yeah, I really appreciate it. I thank you for, you know, sitting down with us cuz I know we had you gone back and forth for a while and I'm sure you get so many requests. No doubt. Um it was great to to speak about, you know, some of the trips you've done and the speaking engage. Yes, you've done as well. Well, you were really interesting. You know, it's like you you who is this guy? This is interesting. You you really got my curiosity up. Really appreciate. I'm glad we did. I'm glad we did. But I wanted to kick things off like in just straight away in terms of like what is the number one psychological problem that you've seen with all the traders that you've come into contact with over the decades? Oh, number one by any stretch of the imagination is that the brain that they brought into trading is

3:53 unfit to actually manage the conditions of trading. We have a brain that is about 6 to8 million years old and it was built for the African savas and it's it's all about survival in the moment. Okay? And it's acting on instinct. And what we do is we take that brain that is still operational. 95% of our decisions that we make on a daily basis never go through cognition. They are emotionally based from this very old brain. And we bring that brain to trading and we have built a mind. We have in this mind we believe that we can control outcome. We believe that we can make things happen. And then you get into trading and you find out that this is a game of

4:38 probability not certainty. and they come in and they come face to face with it, they get emotionally hijacked because that brain does not understand the difference between risk and threat to life. Caveman had no money to play with. What he had was survival and he was um he shared the world with saber-tooth tigers, same caves. And ultimately a threat to self is a threat to capital to the primitive brain. And you get in there and what happens is people want to not lose because to them that not losing is guess what? Getting deranged by saber-tooth tiger. At the same time, you

5:25 also want to win and you will get cranked up. Like for instance, if you're if you and eight guys find a woolly mammoth and you decide to attack it because it's going to feed the it's going to feed the village forever and all this kind of stuff, you're going to have to get really cranked up. That's a dangerous animal. People died. So, in the same way that when you see overtrading, it's the same principle going on. It's seeing the reward big news and it gets cranked up and it it blinds itself to the risk that's involved. Mhm. So out of it is the first order is that we're bringing a brain that thank God evolutionary it allowed us to survive but now we're asking it to do something that evolution didn't build. And if you're going to go beyond that and get

6:10 to where you're actually consistently profitable in your trading, you're going to have to train instinct that has been around for 6 to8 million years to accept a very different reality with the uncertainty that that you deal with in trading all the time. That's where it starts. I love that. And there's so much to unpack there. And it's so fascinating always to hear how the markets brings that fight orflight response even though there's no physical action really involved other than the that's that's as far as it goes. Yeah. But no physical action in terms of as you say that that actual risk of life, right? But there's risk involved and that risk sort of bridges between the two. But have you ever come across when you're working with people trying to help them sort of

6:57 navigate and change that mindset and be able to handle that that risk better? Would you say that you've worked with people with it not able to remove themselves from that brain that evolution? Yeah. All the time that's if you take a look at the success rate in trading you know, 95% are going to go down and another two or 3% are going to be marginal and make some money. But there's only two or 3% of people who actually generate wealth out of this. And those are the people who have been able to reorganize their mind for whatever reason. Not necessarily with the traitor psychologist, but somehow they've been able to remold the mind. And there are other people who are scared. I can't tell you how many times it's very common for me to have a guy

7:43 he's I'm working with him and he's made some really breakthroughs. He's actually putting really good trading mind together to act not on winning and losing but on performance and it starts showing and that he's extracting more capital out of the markets than he's giving back in. He's really happy elated and he tells his friends and say and then he'll say you got to go you got to go see this guy. Oh no. Uhuh. I'm, not, going to, go, see, any, shrink., What happens if he finds something wrong with me? And I'm going of course there's something wrong with you. You're you're taking a brain incapable of doing what you're asking it to do and you're trying to force it and then it bucks at you and kicks you kicks you hard. So yeah, it happens all the time. Let's take a break for a minute there guys, cuz I want to tell you about our incredible sponsor, Alpha Prime, the

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9:15 risk management and resources at a professional level. You will have a salary as a trader and access to trade on live trading floors starting here in London. This is the first of its kind where a evaluation firm is finding talented traders and then backing them with live capital and creating a route to professional trading. I am very proud to be sponsored by Alpha Prime. The links for both will be in the description below. Alpha Capital and Alpha Futures. Use the code RZ for 20% off all challenges. Link is in the description below. Now, let's get back to the episode. What would you say those trades? Have you seen any sort of common traits with those people where they've struggled to make those changes? Um they really believe in winning and

10:02 they have to win to prove themselves. It's like particularly like with alphas uh their winning is not just about money. Money is representational of power, of mattering, of status. And that hooks back into our caveman stuff is that if you were an alpha and you went out and took that willy mammoth down with friends, what happens? You've got tremendous status. You had first dibs to the food. You had you had leadership qualities and you also had first dibs on the breeding stock. So your genes were going into the future at a higher rate than anything else. That's hardwired. And so people come in wanting to win, wanting to prove themselves. And if they make money, they have power, they have status, they have

10:47 all this, and they forget that the the rules of success in trading are enormously different than the rules of success in the world out there. It's kind, of like, it's, kind, of, like, Newtonian physics, large particle physics, and quantum mechanics. They're different rules. And if you try to apply if you try to force Newtonian physics principles onto microspcopic type of particles, it blows up in your face. And it's the same thing that uh alphas do because alphas blow up money man. They they really do. Is it kind of the because of the need to be an alpha and the the the traits of that personality aren't suited towards what the markets are needed? I've actually had um a guy that I worked with

11:33 a number of years ago was a very successful serial entrepreneur. When he graduated from college, he sold a bar business for half a million dollars. Now, I don't know about you, but when I got out of college, I didn't have an extra half a million dollars floating around. But then over time he had always been able to be able to size up companies, understand what was not functioning and then to build them and to sell them 10 20 times more than he paid for them. And then he uh was talking to his brother who was a trader and he found out that trading was a capital inensive business. and he said, "Oh, well," and he had just sold a position for cash that gave him multi-million dollars

12:20 worth of cash. So, he had said, "Oh I've got it. I know how to I know how to build businesses. I can do that easy. And now I've got the capital for a capital intensive thing." So, he went out four years later, he's not making any money. Wow. He's uh and then he comes to me and we start working and he became consistently profitable. One day we're talking and he says, "Randy, I want to thank you. This is the best money I've ever invested in my life. I know that I'm not going to be a trader. I'm not willing to give up control. I'm really good at control." And I've realized that I have to give up control and I have to accept that my power comes from my ability to perform. I can't do that. And I was like kind of weirded out

13:07 because my job at that time I thought was to help people organize themselves into a more powerful mind for trading. And I'm talking to a trader, very good trader, and I was telling him about this and he says, "You know something, Randy it's just a cry and shame to take a perfectly good entrepreneurial mind and try to force it to become a trading mind. It's just so whacked up." So yeah there there are traits and there are ways that when you look at it, you go something, you know, it's just not really the amount of effort may not be enough and the truth is is it is it going to fulfill you? Do you feel like there are people that really aren't capable of change just as you mentioned there that those are those alpha do you think because a lot of people when it

13:52 comes to trading that one of the big appeals of it is that anyone can do it and from anywhere and you don't necessarily need a lot of money and and and so on and so forth. But what's the reality of that look like? Is it a case where there are really are a lot of people out there probably who aren't capable of trading and even if that means that they do it for a long time they're just not capable of the change that's needed as you said relinquishing that control the power that trading is necessary uh for consistent trading. Well, I'll tell you something. In my individual work, uh, we follow a program where I'm I'm actually teaching a process, okay? From understanding emotion very differently than you probably do now to learning how to regulate emotion to being able to produce an observer where you recognize

14:38 you and your thinking aren't the same. To discovering the destructive part of the human potential and then also building an empowered elements of yourself that have been with us since the beginning. and you learn how to reconstruct the mind you bring and it's very powerful and um I have about a 30% success rate with my individual clients. Now I used to think God but I don't want to tell anybody that much less have this all over the dang universe. And then I realized a guy was talking to me says Randy if a major league baseball player hits 300 for a lifetime he's going to be in the Hall of Fame. That's great. And I realized that you know something, the success rate of a

15:24 trader is to become consistently profitable at two to three%. And we're moving that 2 to 3% to 30. And at the same time, you still you still have groups of people for whatever reason. I have uh in my file this morning, I looked in there. I said, you know, these these files have been in here for like a couple years and I've never seen them. I've actually had people pay money upfront and never show up for a first meeting. Really? What's that all about? Okay, talking about fear of like being exposed and at the same time is there's a lot of people who just are not willing to change. They they think this is the way it should be and I'm going to be bullheaded about it and I'm going to

16:10 force my will upon the markets, upon life and stuff like that. And uh the trading gods just kind of laugh at that stuff about us us uh being able to control the will of the markets. And so there's a lot there's there's lots most I wish there were an evaluation tool that would allow uh traders to really find out before they start sinking a lot of capital, a lot of uh their their interest into it whether or not they actually have um what it takes to begin to shape that. Mhm. I really That would be an interesting thing. It definitely would be. I'm I'm actually talking to uh a guy who used to be in one of used to work with me and is now running a goodsiz organization where he's saying, "Randy I would like you to start teaching at in

16:56 my group. And what I would really like to do is offer this instrument that that helps helps us to decide whether or not we're going to actually work with these people, whether or not they actually we can, at least, get, in, more, narrow, about whether or not they have a chance Yeah. of doing this because it's it's a hard business to Well, that's just it. It's not really a business. There is a business aspect to it, but it's a it's it's a mindset problem of where you're actually having to remold a mind that to and get it to do things that it truly was diametrically opposed to by evolution that has been hardwired into an instinct. Yes. So very it's very hard in terms of business. One thing you mentioned there it's like it's like a business because I've heard loads of people, especially

17:42 cuz there's a couple things we can touch on, but we'll start with the business element, which is loads of people in the trading space say that you need to treat trading like a business. Would you say that's a the wrong thing to do? Good luck. Um obviously trading is transactional in that you're you're extracting capital you're putting back in capital, and at the end of the day, you're finding out uh what your return on investment is. Okay. So, and you're going to have to pay taxes on that. So yeah, there is an aspect of it being business. But to think that I'm going to take the mind that I use for business, winning and not losing, being competitive, and if you think you're going to produce the mind that's going to be able to execute and recognize that you're going to be

18:29 losing a lot okay? And you're going to have to you're going to have to become an accomplished loser. Okay? I mean accomplished in order for you to be able to wait for the moments when things work out well and that guy hits target and then you put a leader on it and just goes into orbit and you make a lot of money and get a thrill. The rest of the time what you're doing is you're you're protecting your nickels and dimes and you're you're you're making your losses as small as possible and that that's not a business model that very many people know about that it you know it's true. You know it's true. One thing that we did mention in terms of people not being capable of of trying to change and they get kind of stuck of

19:15 like I don't want I don't believe that I want to stick with this way. Do you feel there is an element of especially nowadays but even throughout your career no doubt there was still mentorships and guidance but rather than social media and being so readily available it was probably more so in seminars and things like of this nature. But regardless, do you think a lot of people build a lot of limiting beliefs that they get really stuck to and sort of really put into their foundational uh beliefs even so that it becomes so difficult for them to break them because of the maybe even a pedestal that they've put this particular trader on uh that they're learning from or someone they look up to or someone they want to mirror and that's the message they're providing them. So then when let's say someone like yourself is telling them no

20:01 you need to think in this way or put these practices in place and they're saying, no, no no, well, I've, learned, from so and so or this person does it this way. Is that a do you think that's something that definitely happens? Oh all the time and it it really it really boils down to um that all of us are born into a world and I don't know if, you've, noticed, but, we've, been born into an incredibly broken world. Okay. And it just so happens your brain's function is to adapt you to survive in that world whether or not you're a wilderbeast or whether or not you're a human being. And unfortunately, what happens is it adapts you and your brain. Most other animals u bring at birth.

20:46 They have they have ancient systems already set up. A giraffe can run in three hours. A chimpanzeee can walk and hang out. Human infants, I don't know if you've noticed but they are born remarkably undeveloped and their brain is developing livewired in the moment to the environment around. And what happens? It's going to pick up the rules, the beliefs in that family system, in that in that culture, in that community. and they're going to become so solidified that you would never see that you're looking through those beliefs and we all bring those beliefs and it's not rocket science. That's the whole thing is it's about mattering. If I make a bunch of money, I'm going to matter.

21:33 If I make money, I'm going to have prestige. If I make money, I have I'm going to have a worth. And a lot of people find out that they have a a sense of selfworth that deeply limits their ability to make money. They have low they have a monetary worth that gets just snagged. I had one guy who grew up in a bluecollar family in Detroit. His father worked in the automobile factories and he just railed at these executives who have made too much money. Nobody's worth a million dollars. Well, I met this guy. He's working with a high six figure uh account and every time he goes over into seven figures, a million dollars, he loses back down into the high 600s. When I met him, he had been doing that for 10 years. And you're seeing that he didn't

22:20 know that he had a self-limiting belief that had been absorbed at the dinner table of a perfectly fine family. Okay. And the other one is that you have this sense of worth. You have this sense of uh uh competency. I'm not good enough. That's I can't tell you that happens all the time. I'm not good enough. I'll never make it. Blah blah blah blah blah blah. And a sense of belonging and a sense of being lovable. And I want to really get on I have a friend um an enormously successful trader. I I know for a fact uh he's made between two and $300 million in the last several years. Incredible. He's Yeah, he's he's he's of this generation. And um he never used trader psychologist. He never did anything like that. And I said, "Mitch, how did you do

23:07 this?" Because when guys do that, I you know, I want to know how they did. And he says, "Randy, I'll tell you exactly what happened." He says, 'You know, um I carelessly blew threearters of a million dollars in a day back when for me threequarters of a million dollars was a lot of money. And it it was it was rocking financially what was going to happen in the home. And he hadn't told his wife yet. And he finally came to the moment he says, "I have to do that. I have to tell my wife." And he comes and he tells his wife. and he thought for sure that the wife was going to be very angry and leave him and all the catastrophic thinking you would imagine. And what happened when told what she did is she went over held him and they cried together. They cried for 15 20 minutes.

23:54 And what Mitch came out of that came out of that as is recognizing come win or lose he still loved. M and he said it was there that I no longer I just thought of this as you know I'm I'm taking different sides. I'm doing my best job performing but whether or not I win or lose I'm okay. That is what freed him from being an adequate trader to being this this this phenomenon. Mhm. So yeah, the those are the basic self-limiting beliefs that if you're human, they're there and they're they are the beliefs that you're going to have to heal with compassion, not with tough guy but with compassion.

24:40 And out of that, what happens? You start growing new beliefs about your ability to manage uncertainty. But if you're trying to prove your worth, if you're trying to prove you're mattering, trading is a really terrible terrible place to force your will against something that you can't really comprehend. Do you feel when you are working with someone who has limiting beliefs, what's the sort of process you go through is one of the first processes making them aware of that limiting belief, helping them to observe it for themselves and accept that limiting belief? Yeah, but I I I take it a step further than that. I again I teach a process and people have no idea what an emotion really is. They have no idea. They don't grasp that

25:27 all thinking is emotional state dependent. It is your emotions generating your ability to produce explanations about what's going on out here. And so the first thing I'm doing is I'm educating people that you don't have emotions. They have you. And that until you wise up and put down all the the barky sounds of being a tough guy, the emotion is still going to overwhelm you. It is more powerful than you ever imagined. Your body is part of that emotion. The way you breathe, the way you hold tension is part of that emotion. It's the arousal element. And once it hits a particular threshold it's taking out the mind. It's taking out the cognitive mind. So I'm teaching first of all I'm getting people to understand that they really need to

26:13 change their opinion about emotions. It's not like you can do live without emotions. The only time that you don't have emotions is when you're dead. However, you can develop freedom of emotion so that you actually become the spearhead of being able to develop an emotional cocktail that thinking arises out of that allows you to perform really well in trading. That's the that's the fir the second part is that you have to regulate the emotion. And the first part of the training with me, you're learning how to breathe diaphragmatically as you trade. You're also having a mirror or a video camera on you to see all the tenseness and see that you're not breathing, which means you're accelerating the emotions sent to take

27:00 over mind, hijack mine. And then I teach when you do that I also teach mindfulness of where you recognize that you and your thoughts are not the same. That again you don't have thoughts they're having you. They're creating your stuff. And most likely it's history coming right through you and continuous creation. Like for instance I come from a family that lost generational wealth the the generation before me. Wow. And it was always the McMillan's getting the money back from the Okconors who stole it from them. It was just, oh it was crazy. And I found myself um always trying to get the money back. And even into adulthood, I found myself in one business. I would do something would

27:46 happen, I would want to get the money back. That's what I knew and understood. If I was going to have power, I had to get the money back. Then it occurred to me that you know something money is actually a transaction. It's really more about um it's the grease that makes things happen. It's not a good way to measure your inherent worth as a human being. And in the time that I finally learned to change that belief to where now um capital is really more about an exchange of values, exchange of what people see my worth, my work is worth. And since that has occurred, uh it it's we have done we've done really well financially. Before I was always trying to get the money back

28:31 completely different mindsets. It's those kind of beliefs that once you begin to develop the empowered elements of your potential that you can actually bring to bear and you can turn toward the self-arning belief and you can actually identify it much more easy because now you're realizing oh my god I as a human being have been given this gift of being captain of my own destiny. I can build the way the mind engages the challenges of living and the way that I'm currently dealing with it is not working well. That's why people come and work with me. Don't know where the market's going next? Stop worrying about your trading. Just get informed on exactly what's happening in the markets and what to expect. From Forex to futures to stocks to crypto, be on top of it all. That's

29:18 why tens of thousands of traders are subscribed to Market Journal, a free newsletter that allows traders to keep up to date with the markets every single week. Remember, an informed trader is a profitable trader. It doesn't matter if Trump tweets AI stocks are pumping or if Bitcoin drops out of the sky. Market Journal has you covered. Join for free today using the link in the description below. Let's take a break for a minute there, guys, cuz I want to tell you about our sponsor, Tradezella. Tradzella is the number one trading tool for all traders. Doesn't matter whether you're a crypto trader, a futures trader, or a forex trader. Whatever trader you are all you do is connect your trading platform directly with Tradzella. It automates and makes your trading journaling so easy. If you want to be a profitable trader, you need trading edge. And that is exactly what Tradesella does. It allows you to identify edge, maintain your edge, and

30:03 optimize your edge by automating your trade journaling, in-depth analytics back testing, bar replay, and so much more. Now, W gets you 20% off your yearly subscription with Trade Zeller. So, use W for 20% off your yearly subscription or RI 10 for 10% off your monthly subscription. The link is in the description below. Now, let's get back to this episode. What would you say in terms of let's say someone was entering trading? They're a few months in, they've just found their interest as someone to put on their radar like to help them make that, you know, to help them as much as possible in the beginning of their journey. What would you say to them? First of all, find a good teacher a good method teacher, and learn that

30:50 method to the point where on paper you can you can make money. And then uh what happens is then you're going to need to learn. And it may be that you just go from paper to real cash and everything's hunky dory. I I don't deal with people like that. At the point where they start actually risking real capital, they turn on the ancient brain. And that is the time where you need to be learning how to what psychology of trading is and how you go and intervene in emotions and build emotions. So what I what I basically say is that once you come to the moment where you turn over, get really small, go to micros, do whatever you can so that you're not blowing yourself up

31:35 and start seeing that the moment you add money to the equation, everything changes. And then that's when trader psychology becomes really interesting. They will never believe you if uh if you say you're going to need this. Oh no, I'm just going to get this system, man. My teacher knows how. we're gonna just be ming money, blah blah blah blah, blah., No., Get, there, and, all, of a sudden have feel the potential of loss or the potential of making a bunch of money and what happens is that the emotions just blow you out and you're back in ancient caveman time and your thinking brain has just been relegated to the caboose of a of a train. Is there any uh exercises that you give to traders you know that they that they

32:20 can do on their own to try and you identify things? The simple ones are breathing. What I what I in almost all my work particularly when I'm presenting do my little presentation my dog and pony show. What I'm asking people to do is not to believe me. Get a mirror. Get a camera. Point it at yourself while you're trading and notice how much tension is in your face in your shoulders, in your fists. And notice that you're not breathing. And once they grasp that those are parts of an emotion and what they've just done is they've just kicked it up to fight flight. When you feel all that that's that's fight flight ready to act and at fightf flight thinking is just hijacked. So the first thing I do is I have them do that simple exercise and it begins to

33:07 wake them up. And I've also I get a lot of uh people who will write me and in fact one Doris read while we were coming over here where this guy is just taking these really simple exercises that I'm not necessarily intending to help people grow themselves into a better trader. I want them to come through me. And what they're doing is they're finding greater levels of success. That's just from breathing. And the other element is that uh everybody can start practicing mindfulness and recognizing a great truth is that no just because you hear voices in your head doesn't mean you're crazy. But you are crazy to ignore the voices in your head. There are some there are some

33:52 destructive elements in there. There are some highly empowering parts of the self. But in mindfulness, you begin to be able to start sorting out uh all this cacophony going on in your mind and actually recognizing that it can be ordered. And what's going to happen? the observer, the CEO of your company needs to wake up from its deep sleep and recognize that the committee of the mind uh is in a mutiny and that you have to decide that I'm going to learn to put this mind together so that it is empowered and I'm leading not from my fears, not from my greeds, but I'm leading from discipline. I'm leading from impartiality. I'm leading from patience and that you can read my book

34:40 you can read you can watch the videos you can that stuff's constantly out there and Dolores and I get feedback about how people's lives have changed just from that. I love that. I love that. In terms of emotions when it comes to greed, is there like somewhere that that that stems from or like why traders seem to be a very common theme when it comes to greed in particular? Well, first of all there in the background of this, we're we're labeling greed as bad. It's not. If you didn't have greed, you wouldn't find the motivation to go do things and make things happen. The deal is is um is that is that greed in

35:25 conjunction with a number of other emotional programs that allow the greed to give you the motivation to seek better and and particularly what you're doing is you're saying I there is a in my work I actually use uh a heart rate monitor and an app that aligns the heart rate within within certain parameters that are indicative of a good trading mind and a a deteriorating trading mind and a get the hell out of this trade trading mind. Okay. And you know ultimately uh greed uh is just something that needs to be managed like any other emotion. You know it's like uh you can be compassionate all you want but if you just give away everything you end up poor at the end.

36:10 So compassion has to be managed. the courage, you know, we want to have courage to act, but we don't want to do really dumb, stupid, suffic. So to me, greed is that, yeah, sure, it gets in the way because we have this idea that if if we had money, that would solve all the problems in the world. I used to work with really wealthy people when I was a therapist. And what I found is that the wealth was so great that they could insulate themselves from having to change. they could just send attorneys and ultimately but if you're actually in a honest God feedback relationship with your environment you're looking at greed going it has some really it has some

36:56 good qualities to it. The thing is is we need to start defining how those qualities are going to activate because if you really have a belief of scarcity you want to make money and you're greedy to get it and that greed starts dominating the committee of the mind rather than having a balanced part of that mind. And so ultimately it's not it's not that greed is bad. It's just you don't know how to use emotions intelligently. Your EQ your emotional intelligence is low. But as you develop that EQ, you begin to see that. I mean, even shame, understand shame has a bad rap. If you want to change, you're going to have to employ shame. Shame is an emotion that says

37:42 the way you're currently organized is not working for the good of the whole. You need to reorganize yourself. And what it does is it starts the party disorganizes you, and the brain flips out. and it wants everything in the world not to feel that again. So, it shuts it off. But if you really find the courage, um a number of years ago, um, my wife le I led my wife into a business debacle that cost me couple million dollars. Wow. Okay. And I felt nothing but shame at that time. I was this guy who thought I am I am so cool. I am so great. and we were living this high life and then a recession happened. The business started

38:28 failing and we were financially underwater and I was deeply ashamed. I was a failure. You know, I wasn't the man that I purported to be. And I I said, "Dloris, you can leave. I know you're, going to, be, leaving.", And, she, has a temper, but boy, she she really got angry. And what she got angry about was that she that I thought that her love for me had anything to do with the abundant success that that that I was claiming. And out of that though in the in the dissolution of that organization itself what we discovered is that the one thing that I really wanted to be and wanted to do with my life is I wanted to help people grow as I had been able to grow and get

39:14 out of the um confinement of the self-limiting beliefs that I was born into and had executed. So the greed ended up reorganizing me into much more higher functioning. So if you have failure in trading, that failure it's just it's not saying there's something wrong with you. There's it's saying the way you're currently organized and your competency needs to be looked at and changed to be able to match up with the requirements of trading. So like even shame, guilt, all that they are they are they are there because they were integral parts of our survival as a species. So even even fear the same same element is that there are benefits to it. Failure failure fear

40:01 oh I tell you failure you know the brain does not learn from success. Success hits the dopamine button and it it it more hardwires the pattern. Yeah. And it'll get you in a lot of trouble. Failure is forcing the brain. That's the way the brain learns if you look, at, failure, and, all, of a, sudden you're going, "Okay, it's not about me. It's about my competencies." And you learn to reorganize yourself to do better. Uh Ray Croc McDonald's uh he was famous for having the words uh I failed my way to success. Yes. Okay. And it's the same thing is that uh if you're if you're afraid of failure oh my god, don't step out the front door

40:46 much less start trading because in trading you have this thing of where let's say you take loss. I teach my folk to do this is one is this a method mistake and let's say that no you executed your you know your your method, was, fine, and all, that, that doesn't need to be looked at reformed. Is this a psychological mistake? Let's say that no, you actually performed quite well and you did exactly what your rule said and you still lost. So what happens? You realize that loss is just simply probability. You're not going to learn from it because it really wasn't a failure. I actually consider that to be success in trading. But if there's a psychological mistake there, it's exposing it so that it can be worked with. If there's a method mistake there, the same thing is

41:33 it's exposing it. So you can decide whether or not that method, that rule actually is delivering the goods or whether or not you're growing past that methodology, those sets of rules. So no all the emotions are built for you to be able to survive as a group and uh they get kind of they can get skewed but they don't have to be. What processes would you give to traders as they're actively trading? Is there things that once they've entered a trade or executed on a trade or the trade has given its result as you mentioned like you've asked for example did that fit your plan etc. Uh but are there processes that you're when you're working with someone that you're tracking you're keeping on top of you're asking them to do and getting feedback from them? It depends on how well

42:20 trained they are. And my and again my process is that first of all they're going to be uh I use these forms that basically take all sorts of information about physiologically what's happening to you because I know that the physiological aspect of yourself cannot be separated from your emotions from your cognition or your spirituality for that matter. and you're looking at this all in place and you're saying, "Okay, if I'm watching that and I'm and I'm seeing my breathing and stuff like that, I can regulate that and I can maintain the kind of mind that I need to trade with." I also teach that you should be setting alerts every 10 to 15 minutes so that the alerts just sitting there saying you need to check in to uh is your mind still in the right place? And you should

43:06 be able if you're working with me, you should be getting to a point of where you know what it you know what the the empowered mind looks like, feels like when it's present. Okay? And so you're you're having you're setting up an alert. And I also have people uh take breaks about every hour. And the truth is is that um trading is a massive drain on your cognitive system. the amount of glucose, that's the fuel. Uh when you're looking when you're looking at trading, it's like a 1965 muscle car GTO stomping it and you're sitting there stomping it and you're seeing the gas gauge go. That's pretty much what the high

43:53 activity, the cognitive activity that you're doing in trading, that's what it's doing. I don't care who you are, is that after about an hour, hour and 15 minutes of that kind of load, uh you're going to start running out of glucose and all of a sudden your mind's going to get dull. It's not going to be sharp and you're going to start making mistakes. So there's a there's a process of taking care of yourself. But when it really comes down to it, what I'm teaching a person to do is to find what I call the ruler living within them. And that ruler exemplifies discipline, the ability to maintain order under pressure. And what happens with most people, they discover that their ruler goes awall.

44:41 You know, they get all cranked up about the orphan wanting money. Yeah. Yeah. Yeah. Or the inner critic saying, "You might as well give up. It's never going to work. It's never going to work." And what you're looking at is saying, "Is ruler present?" Because you know ultimately if you do not have discipline everything else is for not but emotional discipline is a requirement and if you develop like for instance with me it is uh it is a Roman centuran and I have a fascination of Roman centuran since high school I took a lot of Latin and in the second third year you're reading texts and I read a book by Julius Caesar called I came I saw I conquered and what it was was a life the life of centurans. I fell in love

45:30 and that that centurion symbolically just stayed with me for ages to the point where this almost became a conversation where I finally asked this part of myself, um, what is it you need from me? And in this hallucination I'm talking about, that centurion looked at me and says, I need the sword back. The one you dropped on the ground and never picked up again. I did that with a stick that I used as a sword to play king. And uh I threw it down one time because I I grew up in a profoundly crazym home and I gave up and I threw it down and I didn't pick it up for about 30 years. And that part of me, as weird as it may

46:17 sound, that part of me was sitting there waiting for me to get to a moment that he could wake up and come become part of me again. And I claim that all of us have those kind of heroic qualities living within us. And a lot of them get pushed down for us to learn how to survive in an environment. And if you're going to become a uh a much better achieving human being and a better trader, you're going to have to find you're going to have to find those qualities. Again, they're there. They're part of the genome. They're part of uh group survival of our caveman things. And you're going to have to learn to build that into a very different committee of the mind that can engage life's challenges. Life changes

47:03 radically when that happens. I went through a heart transplant where I was I was on death row for a couple years. Wow. And I had to maintain this uh this empowered part of myself. Um cuz it it it was bleak. And yet at the same time, I now look at it as probably the best thing that ever happened to me. Really? Oh, it just opened my eyes. And now I'm at a point where I realize I'm 73. And sooner or later, you know, I really should retire quarter kind of maybe soon through it. But I what I want is I want a systematic programming that people can see years after I'm gone and work with and learn how to find that power within

47:48 themselves and to grow it and to take their God-given gifts and manifest them is doesn't sound like trading, but it can start with trading. No, definitely. No, but I can see where it intertwines though. And in terms of in terms of that like making a systematic approach, is there any element of your work where you're looking at uh personality traits of individuals? I tend to look um I don't look at personality traits. I look at um I used Carl Young's archetypal system and where there are 12 different archetypes and they are they are personality traits like the ruler is discipline the uh the warrior is courage the caregiver is self soothing selfassion I've heard of these yes

48:34 so they they there and but the thing is what I Carl Young when he studied what he discovered is these traits were in all human beings no matter what culture you came from they were common from our uh from our our African experience. And the deal is is that I'm more interested in naming him from that perspective because I'm looking for their purest form to pull forward. You know, I don't need u a guy who already is um having a very big strong problem with his greed uh manifesting a powerful ruler that becomes a tyrant. I'm I'm looking for I'm looking for a person to be able to pull a ruler out of themselves that has

49:20 the highest good um that I believe that a human being can strive for. And so and my favorite saying is by Thomas Jefferson, the guy who envisioned the United States. He said, "The price of freedom is eternal vigilance." And what I hold is that we can build a mind but that's not enough. We have to maintain it to be able to engage the challenges of our life and to do something with them that no other animal has ever been able to do ever. Yeah. We are this is like u we are literally conscious creation. And by the way, I count creation as the big bang

50:05 and the organization that came to where life and the way it evolved into where one animal ended up starting having consciousness. I consider that to be a miracle that is unexplainable. And if you have a empowered committee that you have developed, it's much easier to actually take responsibility for that kind of mind and to develop it. Are you going to fall off the wagon every, once, in a while?, Oh, yeah,, of course we our job is to strive and to build that. And I believe that trading is the perfect selfmastery is that if you do not master the self you are not going to be a successful trader. That's a big line. That's a big line, but it's so true because trading

50:52 is almost as you do with some of your exercises, it's putting that mirror in front of you. If you want to succeed you have to be able to look very clearly and detailed manner and almost objectively at that mirror and not be as you said earlier like not feel shame even though shame has its positives. Not feel shame for what you see. Yeah. Not not feel toxic shame. Toxic shame. You become a character flaw that nothing can be done about at that moment. Let's take a break for a minute though guys, cuz I want to tell you about our incredible partnership with propfirmtrader.com. Majority of you out there are prop firm traders. You're using prop firms to leverage your trading skills to be able to get more capital and to be able to absolutely change your life. So what's important to you to be able to find the right challenge for you with the best firms and most of all the best prices.

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53:14 will automatically be entered every single week. The link for propertrader.com is in the description below. Now, let's get back to the episode. In terms of uh a trade like someone you may have worked with in the past for example taking a heavy loss you know a significant loss more than the usual sort of loss and it really is you know playing on their mind maybe even impacting future performance. Absolutely. You know what do you do in those circumstances? Well the first thing is that when you take the loss you're going to have emotional chemistry in the body that you do not want. And the very first thing is you exercise. You want to burn that chemistry. And then, you know, from my standpoint in teaching people what to do, what you're doing is you're going back and reorganizing yourself around something that I call inherent worth.

54:02 I I believe inherent there is a section of us that is inherently worthy of being loved, of being respected and stuff like that. And for me, we keep pushing that inherent worth away and we keep looking for performances to cover that making money. And you know, ultimately this isn't about making money. Look, in two generations, um, a very wealthy man is going to die and nobody's going to remember him. He may have a foundation name, but the the the thing is is what do you give like this guy Mitch, you know, he's building a foundation for God's sake. He's teaching people and funding them

54:47 okay? Uh within his system of trading and he's he's not doing anybody. He's taking people who are financially really challenged, which is uh uh I probably wouldn't do that myself. That's that's a whole another, you know, working with money conversations that people have about what the meaning of money is. He's doing that. Um, he's altered the way he perceives money, the way he believes in money, and he wants to help produce a better potential life for others. That's to me um um I'm hoping that that's the way that people they will not remember be my name but they will remember

55:34 somehow that they became much more equipped to deal with the challenges of living. Definitely. How important is that do you think the beliefs around money because the amount of people obviously everyone I say obviously but loads of people get into trading more so focused on the money element. Oh yeah, right. But unfortunately, a lot of people come to trading with very little money to begin with. And in my opinion, that's a very bad recipe because the a lot of the messaging they're getting is that trading brings easy money. Y it's easy to get rich from uh from from trading and therefore they bring this very little money sometimes with no money already and they might be going into debt to try and trade which is a whole different conversation. I've actually had that happen where the guy

56:21 was telling his wife that yeah, we I'm doing great. Everything's fine. And then the first thing she knew that there was trouble on the horizon when they got the foreclosure messages. I can imagine. And yeah, he they lost their house. Wow. So yeah, it's it's easy. Well, so what how much of that is important to a trader in terms of like those beliefs around money and being able to change those perceptions around money? huge is that understand if you go back to the notion of cavemen. This is these are guys living 100,000 years ago. The concept of money just was irrelevant. If you dumped a truckload of money in front of them, they might use it as uh tinder to to light to but they would have no concept of it.

57:07 Yet at the same time the brain is going to produce explanation. it's going to produce symbolic representation. It that's just what brains do. And the connection between uh money as a source of uh safety, as a source of power, as a source of status uh became embedded into um your whole sense of power, your whole sense of trading. If I have money, then this. And uh it's interesting. You go into a trading community and the guy asks you to sit and just watch people talk and stuff like that. And uh what I know is that only two or 3% are profitable. And yet when you listen to this crowd of people talk, you would think every one

57:53 of them are just tunning it. What happens is they they're in they're living in selfdeception. And as long as they're living in self-deception about their money beliefs, then they're stuck with the performance level that they're in. is that in trading it's not about winning and losing. It's about performing. Is that your job is to perform and execute your plan every time regardless of what happens. And if you do that you, extract, more, capital, out, of the market than you put in. What happens is so easy though when you see something and that thing that thing's coming near your stop and all said, "Oh no, I can just give it some more room." Blah blah blah blah. You're gambling at that moment. The moment that you decide to give it more room, you're gambling. A

58:40 friend of mine, uh, David Deetay, is um enormously successful trader. Uh, and when I first met him, he was an intuitive trader. He had been he was a market maker. He was just all that stuff. And he runs his own runs his own group now. and in his group uh you have to be at an elevated level to take his intuitive trades because he's not going to let people who are just getting into the business do that. And one day he said this is this an intuitive trade we're getting in and only a certain group of people could do it. They got in and what happened is that once David's in he has certain markers that is going to tell him whether or not he's going to stay in that trade or not. It didn't hit those markers and he got out at small loss. Next day his buddies come up and say

59:26 'Oh man, did you make all that money too? And it was the biggest thing this month. Blah blah blah blah blah blah blah blah blah. And then they started saying, "Why didn't you do it?" And he said, "Because it was an intuitive trade and it didn't it didn't meet my criterion once I got in." For him, it was nothing. That's just the way you did. Everybody else though gets seduced by the idea of money of power, of the prestige, and you know look at me. So that's you know money uh is all involved in that and everyone is going to have to change those those beliefs and particularly scarcity thinking you know um scarcity thinking is thinking that what you have will be taken from you

1:00:11 and it just so happens that if you happen to have a mortgage you're already primed for it. Yeah it's true. Okay. Very true. Yeah. So, you're looking at it that way and you're realizing that I also have to work through the scarcity that there's never enough or it will be taken from me and those beliefs are going to impact your trading phenomenally much less if I make a bunch of money people are going to like me and stuff like that. That that just gets all the other stuff. What about in terms of striving for perfection? Do you find that a lot of people come into trading and they're trying to be perfect? trying to be they assume that there is something they may learn or something that they can gather that will allow them to never lose and never really have any significant losses

1:00:57 and only really win. Oh, that's the perfectionist. That's a that's actually a personality type I talk about. And the perfectionist believes that if you do everything right, you won't be wrong. And if I want my engineer, the civil engineer who built the bridge I'm driving over, I want him to be a perfectionist. Of course I want the accountant I work with to be a perfectionist. I want the airline pilot that's that's taken me through the sky to be a perfectionist. However, if you take those traits and put them into trading, you're going to lose. And so, the thing is is that perfectionism truly has to die. Perfectionism is really about anxiety that you're going to be wrong and you're trying to make sure that you prove you're right. And the truth is is that it's not about being right or wrong. It's about whether

1:01:42 or not you learn and whether or not you perform your plan. And um the perfectionist believes if I just do a little more. Mhm. And then they miss the trade because they're just trying to accumulate accumulate more data to be able to make a better better read on the market. Yeah. Entry time and stuff like that. So perfectionism that's that's just um sorry about that. That just that just doesn't work. Definitely. And you mentioned discipline earlier and obviously the ruler. In terms of discipline, is there certain things that you will advise traders to do in order for them to be more disciplined? Get rest, not do stupid stuff like uh drink way too much uh sugary drinks and

1:02:27 don't don't all that stuff, but ultimately it's really more about training. And I I use a technique that is fairly simple. It's um it's symbolic representation where I'm looking for you to find something in the world that has symbolic representation to you of discipline of maintaining order under pressure. The Roman centurion. Uh other people may find Winston Churchill. Other people may find a lion. Other people might find an owl. It doesn't really matter. It could be a person or not. Um but what you're looking at is going you could even use like Gandhi. He was highly disciplined you know, he and he beat he beat the British, you know. Um, but what you're doing is you're finding the essence of that in

1:03:15 something that resonates with you. And out of that, you learn to feel that in the body. When you when you move that when you take that movement from seeing an object as a symbol to where you can activate the emotional program and feel it that feeling is the emotional chemistry in the body altering the way you perceive reality and in acting it's called method acting and I teach it I teach it uh and that's that's how initially I start people going you know you need to find and by the way guys the hardest they generally have is the caregiver self-compassion. They want they believe that beating themselves up is going to help them become a better

1:04:01 trader. And I'll ask them uh well when is that worked? And they say never. And at the same time, if you were to uh like the easiest one to quickly get to is like Mother Teresa, you know, uh I understood that she wasn't really understand she was pretty mean, but uh the thing is at other times other people will find something that was compassionate toward them. In my own case, it was a dog. the dog that I grew up with is the only thing at that time that really had deep compassion for me and would do anything for me right? And I actually look at his the dog's name was Bullet. I actually think about you know, it's really funny the who I am today, the reason there was a space

1:04:49 there for healing and growth was because of a dog. I'm sure it is for a lot of people though, you know, and they just might not realize it. Yeah. But what would you say in terms of let's say if you were to give an exercise or like what would be the easiest thing that traders can do who are struggling with their psychology? What would be the easiest thing you could say to them? It goes to breathing. Breathing in the presence of challenge and diaphragmatic. And what you would do if you really wanted to take another level have a have a heart monitor sitting there measuring and find out your your um your your heart rate at rest. Mhm. And then as you're breathing, as you're trading, you're looking over there and what initially when you first start doing this exercise, you're going to see

1:05:34 it bouncing around a lot. I mean, it'll be cracking a hundred. It'll be and you know, just really crazy undisiplined untrained type of stuff. But over time particularly as you look at that, look at the monitor and watching your heart rate and recognize that that heart rate and your breathing rate approximate one another. Mhm. And as you come to the diaphragmatic breathing, you will actually see the uh the heart rate go down. Um when I used to when I was a therapist, it was very

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