W: Fear constricts possibility. It locks you into predictable patterns of thought at behavior. This is the comfort zone that you bump up against in trading. And this fear cannot distinguish between biological threat to life and the psychological discomfort of risk management. I'm paraphrasing - but according to Rande, diaphragmatic breathing can halt the biological chemical response of fear by slowing the heart and thus slow the chemical cascade that hijacks thinking. This is step one of peak performance trading. Mindfulness is the second step in peak peformance trading. You become an observer of your thoughts - vs just riding along with them wherever they want to go. Mindfulness is observing the thoughts thus disempowering them. Mindlessness is the state of not even being aware of the thoughts - the trader becomes a blind victim of them. -We trade our psychology - our biases and beliefs about ourselves, our worth, ... our power to affect the world. -In trading there is no place to hide from our deepest fears. -Developing a traders state of mind can be called a redefinition of the self - or a reorganization of the self. (this is profound shit here) -This is the process of knowing oneself and conquering your fears. -It begins by equiping yourself to embrace your deepest emotions and fears that manifest in your trading. WIth an open mind you become what you were born to be and trading is your teacher. A: All of these concepts make so much sense - and also explain the importance of both being able to bring yourself back from the chemical overload brink of biological fear AND being able to separate your identity from the barrage of monkey mind thoughts that can be triggered by said chemicals. This reminds me of a webinar where Rande discussed the hunters surrounding a mammoth - and the fact that they needed to overrule their instinctive fear to feed their tribes. It's fascinating to think that the fears triggered by trading could be somehow linked to the life/death primal hunt of our ancestors. It's wild - but also explains the intensity of that biological experience - aka FOMO, hesistation, impulse trading....

Chapter 3 – The First Step to Emotional State Management: Naming Your Fear W: Your body, your brain, and your mind have to be calmed to begin this process. Otherwise the chemical nature of fear in the body will quickly reach high levels of arousal and will hijack the trader’s capacity to maintain a calm state of mind. Pg.66 A: we need as traders to learn how to keep our mind, body & brain synchronized to the calm state of mind. There are times when our body might be calm, but our mind is not, due to the negative thoughts going through our brains; or like Randy states, the fear felt in our body will reach quick to our minds and take over. We can learn to manage this state of mind through meditation and relaxation. Unfortunately, I’m not constant in doing it. I’m working on it.

Chapter 3 W- Pg.60 “Diaphragmatic breathing, you choke the emotional fire and return to a state of calm” “It is the first aid relief of an emotional hijacking.” A- I still find it hard for me to breath properly when I miss my entry, this is where I’m working on the diaphragmatic breathing. The second quote made me realize that I might be there with breathing but this is just a rest and I need to tackle the actual problems that I’m having. My action plan so far is again trying to take my hand off the mouse when I miss my trade setup for 1-3 minutes.

I would recommend beginning with the Breathing for Traders. I would do it twice per day for at least 2 weeks. Once you feel good about it; I would spend 2 weeks twice per day in each of these mediations. My recommendation is to begin with Mindfulness Training Exercise for Traders - once that has been practiced twice per day for 2 weeks; move into Developing Mindfulness: The Observer of Thought and practice that volitionally. All the best & talk Monday!!

Chapter 3 - The 1st Step to Emotional State Management: Naming Your Fear Example of Harry begins the chapter (Read together) - Harry surprised caught in a revenge trading vortex - rational mind seemed to disappear - ***Just b/c a trader doesnt feel the emotion; it doesnt mean the emotion is not shaping his mind (it is outside of his awareness)*** - Traders must understand emotions. Emotions can be explosive. We have to learn to be mindful as opposed to mindless so we can manage our emotions/mental state in trading - A lot of the time our sense of identity is under attack while we trade: the need to prove ourselves to someone, have to be better than others, losing is inconsistent with who we are "the man" and challenges our identity (see Harry example), fear of being inadequate *---Harry solution - push himself to be the best in all he did - sales, sports, etc. If he won, he didn't have to deal with sense of inadequacy. Trading exposed all of this in ways he wasn't prepared. - Emotions = biological in nature & take over our psychology. They are deeply primitive. Fear will push you to avoid discomfort & uncertainty (important to survival). --- Our sense of worth & adequacy becomes grafted into the emotion. Hary (like us) avoids all of this until TRADING brings it all to the surface. - ** Remember emotions are biological, not psychological. If you are trying to "push them aside" they're simply going to blindside you in your trading. They cannot be pushed around. - Traders have to learn to manage fear or it will overwhelm them and they will not be able to get to the traders mindset led by courage, discipline, impartiality & patience ---Fear cannot be eliminated, but it can certainly be managed so it's intensity doesn't sweep you away (into what Dr Reid calls Monkey Mind or Traders Trance). Avoiding Fear in the long term will not lead to CPT. Traders have to learn to honor their internal struggle with fear. In order to do this fear must be approached, not avoided or attacked. Avoidance = hesitation in trading; Attack = impulse trading. -- Harry - beginning of story feels large & in charge - gets sucked into impulse trading - feels a huge rush/sense of control/large & in charge.... This state of mind also blinds him to staying with his trading plan & he losses money. After losing - feels frustrated. He could not cover it up or blame anything/anyone. This was a feeling all his life he avoided, but was unavoidable now in trading. Next he feels shame/like cannot measure up....the story he had always told himself & others was not true. ----Trading requires self honesty - Harry was going to have to take a long & hard look in the mirror. ---All people get locked into their "comfort zone" the book describes in more detail why/how, but we all see the world in a particular way and we are locked into this "way" ***Fear constricts possibility. It locks you into predictive pattern of thought & behavior that are effective for the short-term avoidance of threat, ---Basic emotional state management principles must be learned and applied - the body, brain & mind need to be calmed. The 1st meditation last week teaches you how to volitionally breath diaphragmatically. This is the way to "interrupt" the process & that is what we need to do when we are trading. Without the interruption the fear based emotion will explode and take over. This is not the cure, but as discussed last week - this is Step 1 Step 2 is becoming a "Mindful Observer" - we need awareness of thought as opposed to mindlessly drifting through... ---Becoming mindful takes away thoughts power to hijack you. -- You & your thoughts are not the same. ***Thoughts are manifestations of our deepest beliefs & biases about ourselves, our worth, our adequacy & our power to influence the world. This core material needs to be reorganized to achieve Peak Performance. - Examining this causes short term discomfort so traders avoid it. - Until we develop the EQ to face our fears & learn from them; the trader will not produce the trading results they desire. - By calming fear to a tolerable level; fear can be approached - we can uncover what is holding us back from trading excellence. - Mindfulness - we separate our identity from historical beliefs we were born into... Freed from the power of our fears; we discover more powerful meaning & purpose in our lives. This aspect of development can be called - reinvention or reorganization of the self.