Separating Fear From Uncertainty in Trading Trading does not come natural to the human brain. For the vast majority of traders, it has to be learned. From an evolutionary perspective, just a few short years ago we were all cavemen. In your ancestor’s world there was no reason to separate uncertainty from fear. The world was a dangerous place and if you experienced uncertainty in your dealings with your environment, there was a good chance you were facing a mortal threat. Uncertainty became glued to fear and anxiety as a survival trait. And that trait got transmitted to future generations -- long after the usefulness of gluing uncertainty and fear together. Your inner caveman still lives within you as you trade. Your limbic brain (caveman’s inheritance to you) is still watching his environment (your trading screens now) and interpreting from an evolutionary bias that locks uncertainty and fear together – rather than distinguishing them from one another. This deeply embedded trait has also been uploaded into your psychology. This is the psychology of self that trades and experiences worry and fear when you are supposed to be impartially managing risk with your trading plan. Separating uncertainty from worry and fear (more primitive parts of your survival brain) – caveman – is what is required for a trader to evolve from fear based interpretations of uncertainty to risk management interpretations of uncertainty. So if youre having difficulty moving one set of psychological skills that proved successful in one domain of your life to success in trading, welcome -- this is typical. There is nothing wrong with you. But it does indicate that the you that your brain has organized you as needs to be changed. And that new psychological skills will need to be developed to replace your inheritance from caveman. Otherwise caveman will continue to participate in your trading. Thats all. The mindset for the vast majority of traders has to be developed. Particularly the management of uncertainty and the meaning that becomes embedded tin he meaning making pathways of your brain (thats your perception). This is where you will find your self limiting beliefs about yourself. If you experience hesitation as you evaluate set ups for risking capital, if you are seized with fear as you try to pull the trigger, or if your heart pounds as you enter a trade (particularly when it goes against you), you are experiencing a biological predisposition that has shaped your personal psychology to avoid uncertainty -- thats your caveman trading along side of you, perhaps even taking over. It is the mindset that you take into uncertainty (thats trading) determines the probability of success. Evolutionary and psychological bias, in the vast majority of traders, will have to be examined and changed for this to occur. It takes emotional labor, and thats the price for re-development of the self designed for trading. Its a great personal development adventure. Traders often invest years in learning to know the self and developing a psychology that trades effectively. This process is unavoidable. Where are you in the evolution of this process?
Posted on: Sun, 27 Oct 2013 02:16:46 +0000
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