This thread is intended to be about behavior modification. It's not a place for debate. If you read these ideas and think they are hogwash there is no need to comment. If you have interest in these ideas or have your own ideas feel free to contribute. Also - if you try any of the techniques please post your findings. I'm not claiming to be an expert here but I have spent a ton of time working on this stuff for myself. A lot of what I will say and write isn't quantifiable. It might be complete bullshit. Lastly - because I've spent a lot of time working on this I won't always be able to give proper credit to all of these ideas. None of these ideas are mine. I didn't originate them and all credit goes to others. I think we need to start from the beginning and identify the problem. Traders are aware of fear and greed but I think there is something deeper at play. We are conditioned from an early age to strive for perfection. This in itself isn't a bad thing - but when we tie our self-worth to the results we have problems. I believe that the biggest emotion that holds us back is shame. Most people are terrified of shame. This leads to self-deception and a desire to "put on a face" for others. We repress this more than any other emotion. We don't mind showing anger (men) or sadness (women) but we will avoid feeling vulnerable at all costs. My favorite poem of all time is "The Love Song of J. Alfred Prufrock" by T.S. Elliot in which he says: And I have known the eyes already, known them allâ The eyes that fix you in a formulated phrase, And when I am formulated, sprawling on a pin, When I am pinned and wriggling on the wall, Then how should I begin To spit out all the butt-ends of my days and ways? And how should I presume? I think he captures that feeling of being frozen by what others might think. There is a difference between shame and embarrassment. Embarrassment is when we feel humiliation because of our behavior. Shame is when we identify the behavior as ourselves. It's not "I did something stupid" - it's "I am stupid". This can be crippling especially in trading where you are guaranteed to be wrong fairly regularly. It causes us to deceive ourselves and others. If every time you make a mistake your entire self-worth comes into question you are going to avoid admitting mistakes - especially to yourself. What is the antidote to shame? As cheesy as it sounds it's love. At a fundamental level we all need to believe that we are fundamentally deserving of love. Most of us have felt the opposite of this many times in our life and it causes us to build defense mechanisms to avoid feeling vulnerable. Vulnerability is when you allow others a peak behind the veil. You are saying - here is the icky ball of mess that is really me - take a long look. Being vulnerable is one of the scariest things a person can do. It is also where meaningful connections can happen and big changes can take place. Have you ever been at a party and gotten involved in a conversation with someone who can't help but work his personal achievements into the conversation or list all of the important people he knows? We instantly recognize this as inauthentic and label the person a bore. Have you ever been to a party and gotten involved in a conversation with someone who is completely vulnerable? We recognize this as real and often find the person compelling. We also tend to share more of ourselves with this person. It's easy to find examples of this in trading journals. One trader says, "I've been at this for 10 years, I've really struggled, this is the hardest thing I've ever done. I haven't lost my desire to succeed but I'm feeling beat down and can't even tell which way is up. I need help." The other trader says, "I've been at this for 10 years, I know everything there is to know about trading. I've read all the books and talked to tons of famous traders. I'm not making money because no one makes money doing this." Which trader is being authentic? Which trader is going to get more help? So if we have identified the true problem (shame avoidance) and a possible solution (vulnerability) where does behavior modification come into play?
Behavior modification is basically reverse engineering solutions to emotional problems. If you are chronically unhappy you will move your face and body in certain ways (frowning, head down, shoulders slumped etc.) Behavior modification is accomplished by using our body and face to change our emotions. If we can force ourselves to smile, hold our head up and keep our chest proud this will in turn change the way we feel. http://www.ted.com/talks/amy_cuddy_your_body_language_shapes_who_you_are In this video were are given two techniques that we can (and should) use immediately. Putting a pencil between your teeth forces you to use the same muscles as smiling which leads to a happier mood. Power posing for two minutes improves feelings of confidence. We also learn that testosterone and cortisol are the hormones responsible for all of this. There are other ways to increase testosterone and reduce cortisol levels substantially. 1- Reducing belly fat increases testosterone. (Weight loss in general also helps) 2- High intensity exercise increases T. 3- Strength training increase T. 4- Reducing sugar in your diet increases T. 5- Consuming healthy fats increases T. 6- Taking zinc and vitamin D increases T. Cortisol is known as the stress hormone and reducing it will help us manage our stress levels. 1- Meditate 2- Sleep more and more deeply 3- Regular exercise 4- Avoid sugar 5- Take magnesium and vitamin C 6- Stop drinking coffee (I know) Still tons more to come...
For those of you unfamiliar with Phantom of the Pits - here is a link to his e-book... http://www.earnforex.com/forex-e-books/forex-market/phantom_of_the_pits.pdf In the preface he states, "Most traders think the important element in success is knowledge. In my trading career I have found that correct knowledge and the ability to change behavior are the most important parts of successful trading. Correct knowledge without behavior modification projects improper execution of an otherwise perfect trading plan. " POP has a ton of good information about behavior modification (which I am reluctantly going to start calling "BM"). I encourage anyone who is interested to read the section on BM in the link provided. I will highlight a few key points. You need to develop a routine. Just like Superman dons a costume you need a ritual that signifies to yourself - I am a trader. If you are at home, wake up in the morning, throw on some sweatpants and plop yourself in front of your computer you will most likely fail. Athletes are good examples for this. Michael Jordan on game days would get in a particular car, listen to a particular play list and drive a certain route to the stadium. He would put his UNC shorts on under his uniform, he would go through a certain routine to warm up etc. All of this put him in the right mindset to perform. So a routine must take enough time so that your mind has time to get into character. You might get up (at the same time every day) and shower and get cleaned up, check your computer to see where the market is at, put on your "uniform" (be consistent), meditate for 20 minutes, do a high intensity workout for 5-10 minutes, have breakfast and make coffee, unplug your phones and then sit down to trade. This is especially important if you trade from home as you need time to get into trading mode. When the trading day is done you turn off your platform, take your uniform off and plug your phones back in. This is also a part of the ritual. It probably should be explicitly stated but all the behavior modification isn't going to make you successful unless you also have a trading plan to follow. I'm going to stop now for today. I have plenty of other ideas to share but this is a lot to absorb and my fingers are getting sore. I'd love to hear some people's thoughts and whether any of this is helpful and clear.
Great idea, G.G. My only question is, if behavior is a by product of our thoughts, then do we need to dig deeper?
This is a very astute question. First I don't believe behavior is just a by product of our thoughts. Emotions can overwhelm all thought and cause unexpected behavior. We are hard wired for pain avoidance and pleasure seeking so most of us have a knee-jerk reaction to our emotions. If something feels good its "MORE" and if something feels bad its "run away". I believe our thoughts are mostly just a mechanism to blanket our emotions. Most of us have unfocused thoughts all day - one after the other. It's mostly ego chatter. Behavior for most people is just repeating the same patterns over and over again. BM helps to short circuit this pattern and allows us to construct a pattern more in line with our goals. I do think digging deeper is essential if you want to make lasting changes in all aspects of your life. BM is probably sufficient for trading but it depends how messed up someone is.
You may want to think about whether you want to modify the behavior or eliminate it. If the former, once one has determined the behavior he wants to modify he should find the stimulus that triggers that behavior. He can then desensitize himself to the stimulus and thus short-circuit the response, or he can expand the behavioral options from which he can choose to respond to that stimulus. All of which amounts to building a cage around emotion rather than dissipating it. Another option, which also modifies behavior, is the approach described in the Zen thread. I don't see that it's any more work than behavior modification, and the results are fundamentally different.
I always assumed everything originated from our thoughts. I have been aware of something lately: I can be going about my day, doing a task, and all of a sudden (so it seems) I will start worrying about something. There was no outside stimulus (that I am aware of) basically not being in the now moment, worrying over past/future. I also noticed that the perfectionist side of me and trading doesn't mix very well. Opps, I just got a call from Vanna saying I have used up my weekly allotment of a certain vowel. Ammo, just replace I with it, so you don't go crazy reading my post.
I couldn't agree more but some people will refuse to do that sort of work. Perhaps you can link to the Zen thread as it's hard to find these days and I never bookmarked it.
Actually it's two different kinds of work. Are you interested primarily in modifying -- reinforcing or extinguishing -- a particular behavior via positive or negative reinforcement? Or are you interested in determining the stimuli which trigger certain -- assumedly undesirable -- behaviors in order to avoid the behavior by altering the stimulus or by increasing the range of behavioral choices to that stimulus? The second, of course, is "deeper". But the former requires a pretty controlled environment. That's a big reason why the market is so good at the former, particularly when the reinforcement is intermittent, i.e., something positive happens to you one day, such as riding a trend, so you try it the next day expecting the same result and get screwed. So you vow never to try to ride a trend again, and that's the day when you get a 100pt cascade, most or all of which you miss. So the next day . . . That's why I found Zen to be so much easier and more effective.
The foundation of my approach to this is a meditation practice. I supplement this with a morning routine, a healthy diet and regular exercise. They are different approaches but I've needed both - maybe I started more messed up than most. One of the first books I ever read (on poker) was Zen and the Art of Poker. It appealed to me instantly. The rules are great but few can read these rules and apply them. Self-awareness is a work in progress and all the book reading pales in comparison to 20 minutes actually meditating each day. Some people are completely put off by anything that seems "spiritual". For them BM might be the way to go.