Mindful Trading - Book Club - Author Rande Howell

[Dan F 73]

Power issues have fun today!!!

Chapter 5 notes

Pg 97 “What I’m beginning to see is that by focusing on loss abatement, I’m not really practicing risk management”. I can relate doing this while trading sometimes.

Pg 98 “The fundamental assumption Brian makes is focused on “not losing, or minimizing loss”

Pg 101 "attunement" is not something that you can fix, it’s something we all work on.

Pg 108 “Bruce has just described a highly enriched memory that is associated with an emotional state of calm peacefulness.” “that allows him to call up this memory – and its emotional state – while he trades"

Pg 109 “Think about yelling the word “FIRE” in a crowded theater.” “This is what happens when a trader becomes anxious while he is trading.” 

Pg 110 “As he developed the highly enriched memory of him and his wife in the vastness of a starlit desert, he began to associate the memory with a sense of pleasure and calmness.  It is this calmness that he volitionally called up in his trading rather than mindlessly being sucked into an established pattern of perception and behavior.  This is what quelled the engine of desire and kept him out of impulse trading.”

Pg 112 “Being Intentional About Creating a Zone of Safety in Your Trading” sounds a bit like the trading in the zone philosophy.

Pg 114 “The key here is to build the emotional atmosphere in your trading environment so that you are able to work from a state of calm.”

Edited August 28, 2023 by Dan F

[Susan 111]

Chapter 5 - Reinventing the Self: Creating a Trader's State of Mind

This bundle of beliefs, perceptions & biases we call conversations in the  mind are what determine how we trade.  These elements must be brought into awareness, examined & reorganized.

The key is to move from a belief system that is galvanized on not losing to a mindset that is focused on managing risk so that the probability of success is in your favor.

Changing beliefs is not a mechanical process where you can take part off and add a new one...you have to grasp that you have to disrupt the biology of pattern or the old historical belief will reclaim perception - IE why diets fail - overeating is merely a symptom not the problem.

Cannot focus on "not losing" rather on "maximizing profit"

To master the market; you will have to master yourself.  You cannot control the market, but you can learn to control yourself.

As with the saying it is not what happens to us (as this is often out of our control), but how we react to what happens to us ....in trading it is not what the market throws at us, but how we can react to what we are being thrown...

All emotions, including our most primitive emotion which is fear, have a particular breathing style attached to them.  Most people hold their breath or start breathing faster... yogis & Buddists were able to reduce stress levels (even blood pressure & other measurable traits) through breathwork.  This is the 1st step for the trader - the breath work.  You can begin when you "notice" a change in breathing, but as you move further along as the "observer of self" you will get to know your triggers & can implement a bellow breathing framework to begin when you are about to engage on one of your triggers.  IE - you hold your breath when you enter....if you know this - start breath work when getting ready to confirm entry and continue until "out of the weeds" with this trigger.  Beliefs will also need work, but breath work is a very powerful step 1.

If breath not managed under stress - air supply needed by brain is compromised and this leads to a fight/flight response.

80% of illness is related to stress.  Vast amount of people (including traders) breath in a way that supports stress.

Diaphragmatic/bellow breathing - rote training - 10 breath per session and keep increasing it... practice multiple times per day throughout the day - you will see results quickly...practice when trading so your brain starts building the habit, but also practice outside of trading.

Safe Place - explain what it is and examples... utilize 5 senses

 

 

 

[Susan 111]

Chapter 6 - Mindfulness - Awakening the Observer of the Self

An unexamined life is an unlived life. Bc it causes momentary discomfort, you & a multitude of others avoid looking deeper - beyond the surface of our thoughts & identity. 
 

Rande continues on to tell us to become successful as traders we have to look beyond the surface. 
 

for me; the concept of becoming the observer has been a great learning experience. Realizing that I am not my thoughts and I can let thoughts just pass by without becoming swept away with them produced a humble power within… it takes time & dedicated practice to become a mindful, disciplined person & traders. This is the road I’m on… I am humbly proud of the progress I’ve made, but know I’m not at self mastery which is my ultimate goal. I think it’s a goal you work at forever. I do think some can be considered “self masters” but I believe this means they have the ability to choose long term goals over short term rewards/impulses. They have examined and continually create their thoughts/lives/etc. 

[Dan F 73]

Chapter 6

Bill is haunted by these counterintuitive thoughts going against his trading plan with mindfulness being the key for him. Bill was living in a world of mental conflict not realizing that he was dealing with cognitive dissonance. Fixing this depends on what the issue is and how good you are at making adaptations.

Pg 119 “He is also beginning to recognize that trying to push the “bad” ones away seems to only invite them to become stronger.”

Pg123 Im looking forward to learning about what is called in psychology the “governing scene”

Pg125 The “emotional motivation” sounds like it is tied into your feelings

Pg127 I think that the analogy of child-parent relationship that is given in the book is a great way to make you realize what emotions are kid-like (compulsive) and what is parent-like (well thought out).

Pg129 Dr Howell walks through how to take a break from trading by bringing yourself into your safe mind space. He also said to journal the thoughts after doing this.

Edited September 18, 2023 by Dan F

[Susan 111]

BOOK CLUBBERS!  DO NOT HATE ME, BUT I FAILED TO REALIZE KIDS ARE OFF MONDAY, SEPTEMBER 25TH.  IT IS A TEACHER WORK DAY FOR US!  I MADE SCHEDULE WITH ALL OF THIS IN FRONT OF ME, BUT SOMEHOW I  MISSED THE 25TH.  I EDITED OUR SCHEDULE SO WE ARE OFF NEXT MONDAY AND RESUME THE FOLLOWING WEEK WITH CHAPTER 7.  TALK SOON & PLEASE PLUG IN COMMENTS FOR CHAPT 7.  I FIND IT MUCH MORE ENGAGING WITH YOUR COMMENTS!!!

SUSAN RIZZI🤩

[Susan 111]

Chapter 7 - The Internal Dialogue Wrestling Control of the Mind From Limiting Patterns

W - It is through unseen & unexamined assumptions that we interpret & understand the world.  95% of traders it produces mediocrity.  To break free of these unexamined assumptions we must 1st become aware of them.

A - We have to really listen/become very aware of the beliefs; which stem from the voices in our head so we can challenge & change them.  Most live unaware and go through thinking "it is what it is OR this is who I am"

S - For me; this study/journey has been a dive into these beliefs/voices.  I am still learning new things, but have been able to identify a lot of them, where they came from & start to reprogram:)

[DenHei1 13]

Chapter 7:

pg 158:In trading, if you find yourself thinking over and over, “What if this, what if that?” – you have been seized by this genetic artifact of our distant evolution.

Rande is saying that that micro-second thought is from our evolved ability to sense danger.

I agree and would also add that when I catch myself having a "What if" thought, I'm also trying to take the uncertainty out of the trade by trying to predict the future AND NOT focusing on whether or not the setup is triggering.  

 

pg 158 The predisposition for fear-based negative appraisal and the tendency to see the glass as half empty rather than half full naturally influences the perception of the trader to see trouble, where management of uncertainty is necessary for success.

Again, Rande credits our evolution for the "management of uncertainty" strategy of negative appraisal.  

I agree here as well - and I have to keep reminding myself that there really isn't a way to manage uncertainty.  And the self-blame that can come from "I should have", "I could have".... only feeds that false sense that it was even possible for me to know the future.  I either saw the setup and entered it - or I did not.  It's also interesting for me to picture this image of hiding in the bushes and then feeling like I am going to have to run across this area of the unknown - so at a certain point, I've just got to run for it.  This is a familiar feeling that is a feeling that motivates the sort of rush/release of pulling the trigger that I feel.  

For me - I experience this cycle:  hiding in the bushes stalking my setup, running negative assessment in order to try to control uncertainty (doing the impossible), a building of tension culminates in a release of impulse and adrenaline to pull the trigger (run from the bushes) - and while my ancestors only really got 1 screw up because if they got eaten it was over. If they didn't get eaten, they felt good - so they could celebrate their ability to have survived.  But in trading, each loser feels like getting eaten because the evolutionary roots of this cycle can only award me for not getting eaten - so then this gives way to the self-critic rearing its head.  Then the longer and stronger the self critic gets her mental time, the stronger negative assessment kicks in on subsequent trades.  This is the see saw cycle of this kind of trading.   - So part of breaking this cycle for me, is both the awareness of it AND the ability to quickly and believably defuse the self-critic.  

[Susan 111]

Reminder we are off OCTOBER 9TH - Columbus Day & I am away for 11th anniversary

Chapter 8 (last chapter) resumes October 16

[Susan 111]

Chapter 8 - Reorganizing the Committee of the Self

W - The committee of the Self included new found archetypes called Ruler, Nurturer, Sage & Warrior.  These were living in her, but never properly developed.

A - Important to know we have all we need already inside of us....we just need to work to develop ourselves in these areas.

S - This is the way I set my mind to trade everyday.  These archetypes were not playing the right roles and some not properly developed in my life, while others were overdeveloped (like Warrior) and trying to be in charge in the face of fear/perceived danger.  I now know how to set & reset myself for trading.  In mindfulness; we can awaken these archetypes. 

I also learned how to calm my child (fear) and to nurture instead of tossing her into a corner and telling her to shut up.....huggghhhh...nurturing fear/child feels so much better than ignoring or berating her:)

Things to review together:

p.187, 189, 190, 192-228

 

 

[Susan 111]

[Dan F 73]

Chapter 8

Pg 164 “Remembering the courage she had summoned to jump out of an airplane the first time convinced her that she could face down her self-doubt and hesitation.  By using the mental skill set of symbolic representation, Vicki could retrieve the memory of overcoming the fear of death when she jumped out of the airplane.  Calmly focusing her attention on that memory, she could ignite the courage of that moment and act from courage rather than fear.”

Pg 166 “Even if it was accidental and you were lucky, it is still evident that the strength was always there – just not consciously available to you.”

Pg173 “If you are experiencing either fear or greed, you are operating out of the Orphan in its many forms from Victim, to Saboteur, to foolish impulsivity.”

Pg174 “higher order thinking.  This is done through the use of self compassion (rather than punishment and shaming yourself) and courage (the ability  to set limits).”

Pg 174 “If your trading is fear-based, you definitely have a part of your trading committee which is not being taken care of.”

Pg176 “As long as you as a trader punish, shame or wish to abandon (or kill) the vulnerable and fearful Orphan within you, you will continue to trade from fear.  This is the essence of self-destruction.” 

Pg 178 “By using the deep relaxation engendered by both breathing and SafePlace development, you can build a memory of courage in your memory banks.  And you can call this memory into your awareness so that it becomes part of your state of mind.  This is called intentionality.”

The Ruler= higher thinking, The Sage= Higher thinking analysis

Pg 188 “In trading, the archetype allows you to see patterns and possibilities that others are blind to.” I get what Howell is trying to say but BBT has pointed out is a pattern that isn’t seen has a higher failure rate. I just wanted to point that out.

The Innocent archetype is why I keep on trying to trade even after I pass the benchmark where you start to get it or not. The innocent archetype doesn’t seem like it can work without the Lover and vice versa.   (pg. 189-190)