If your trade-results are letting you down, your mind-set may need a facelift. To do this you need to know something about how the brain functions. Chances are your ‘Brain certainty’ needs to make space for ‘brain probability’. If you can release your need for security, your results may increase significantly. The American trade-therapist Rande Howell wrote the following on his website: “Most traders operate in a state of fear, so they never can open the possibility of performing on a higher level.”
When you think about fear you may also have discovered that your fear is related to your need for security. This need stems from our primal brain. Traditionally it needs “to create order in a world of uncertainty, chaos, and the fear of death.” Howell states in his article ‘The allure of magical thinking’. It is the “Myth of control”.
Your brain reacts negatively to everything that feels uncertain.
Because the need for certainty is grounded so deeply, nature has given us a warning signal: Psychological discomfort. It means you do not feel good when you do not feel certain. Sadly though, the brain does not make the distinction between types and throws all forms of uncertainty together on a pile. Even if the need for certainty is unnecessary or even unwanted, your brain reacts negatively to everything which doesn’t feel certain. As Howell states, it tries to hold up the “myth of control” with all it’s might.
This is not something we can use in trading. The need for certainty creates discomfort and leads us to the disastrous path of prediction.
To be able to trade effectively, you need a “Probability based mind-set”.
We have to be able to “remain confident in the face of constant of uncertainty,” as Mark Douglas says in his book, Trading in the Zone. So do we just stand there and watch everything happen? Yes and no. To trade effectively you need “probability based mind-set” according to Howell. You accept that you will never get certainty, but you can profit from probability. After all anything can happen. By having an edge in the market unpredictability can be your friend. To achieve this you need a good plan; a strategy with clear rules which you always follow.
It takes a lot of effort to flip the switch inside your head, but it it’s worth it. Your trading will become more consistent. You are less likely to fall prey to the emotions which influence your behaviour.
Try to learn to live with uncertainty and –this is the key- try to feel good about it. Only when you truly accept that you can’t know anything with certainty because the market knows no certain patterns, have you made the first step towards trading beyond the average. You are on your way to above average success.
From: The Power of Mindset Trading
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