2024-02-10
Introspection is undeniably one of the most crucial traits any human can possess, especially in the realm of trading. Just envision constantly scrutinizing your own behavior, observing your reactions, and evaluating whether they are beneficial or detrimental. This isn't about overthinking; it's about engaging in a rational analysis which is nessesary for successful trading. You not only need to be a great risk manager you aswell need to be a psychologist.
The concept I'll be discussing in this post draws heavily from Ed Seykota's website, but I've also incorporated some additional insights and got rid of others.
Information enters the so-called "Caveman Brain" through your senses. You can also refer to the caveman brain as the subconscious—it reacts quickly, emotionally, and automatically to danger or opportunity. Additionally, it manages your facial expressions, mouth, or vocal cords. It stores information as experience.
The Conscious Mind can assimilate data or information from the caveman brain, which is stored as experiences, and apply logic or judgment to it. For example, when a rabbit moves behind a tree, we can reason that if it does not come back out, it is still behind the tree. The Conscious Mind can even imagine the rabbit behind the tree without seeing it. It aids in reprogramming the caveman brain.
The Caveman Brain and the Conscious Mind work together through a continuous exchange of information and responses. For instance, let's consider an example: someone gives you flowers, and a bee comes out and stings you.
The Caveman Brain processes this as pain, which becomes an experience. The Conscious Mind then analyzes the situation, searching for answers on how to respond if it happens again. It may conclude that avoiding flowers altogether is the best course of action to prevent another painful encounter. This conclusion becomes a Protective Warning (PW).
If, over time, you receive enough flowers without encountering bees, the Conscious Mind gradually modifies the Caveman Brain's reaction to flowers. Eventually, the Caveman Brain may no longer associate flowers with danger.
Throughout this process, the Caveman Brain and the Conscious Mind maintain constant communication. The Caveman Brain sends out Protective Warnings, and the Conscious Mind responds by adjusting behaviors and perceptions.
What happens if this process get interrupted ?
The above-described process is indeed healthy and should ideally function smoothly. However, often this process gets interrupted. For instance, school children are expected to sit in rows and not express their feelings about the school system. Emotions, overall, are something that one should not openly display. This interruption disrupts the link between the Caveman Brain and the Conscious Mind.
The Conscious Mind programs the Caveman Brain to judge or block certain feelings, creating a knot. However, the Caveman Brain persists in trying to communicate with the Conscious Mind. It continues to send signals repeatedly ("Feelings Pump"). Eventually, the Caveman Brain may find a way to express itself, often in the form of drama.
Trying to suppress the Protective Warning (PW) sent from the Caveman Brain to the Conscious Mind will not work over the long term. Eventually, no matter what, you will end up in the same place or situation that you initially tried to suppress. This cycle repeats itself again and again. Everyone eventually gets what they want from the Caveman Brain, and attempting to deny those experiences with the Conscious Mind only reinforces the syndrome.
All of the Caveman brains are connected by an Under Caveman Brain, which notices if one Caveman brain is helpful to another or acts as an ally. They sense a "chemistry," which is why people from abusive childhoods typically feel a strong visceral attraction to an abuser, or even choose one as a mate.
Now, we need to establish a process for fostering the flow of experience between the Caveman Brain and the Conscious Mind.
It's crucial to notice the feeling or experience in your body and acknowledge them. This is something I've often observed in other traders—they frequently emphasize the importance of getting the emotional aspect of trading right by suppressing emotions. However, this approach is completely incorrect. Instead, it's essential to look at the emotions you experience when trading and truly feel them. You won't succeed in mastering your emotions if the Conscious Mind continues to label certain emotions as bad, as I outlined earlier.
You can incorporate the process described above with meditation. In this post, I mainly focused on carrying out the process independently. If you're interested in learning more about how this process looks with several people involved, I encourage you to visit Ed Seykota's website.
https://www.seykota.com/tribe/TT_Process/index.htm#:~:text=The%20Trading%20Tribe%20Process%20relies,actively%20care%20about%20your%20feelings.&text=People%20typically%20have%20some%20of,their%20feelings%20sabotage%20their%20trading.
Thanks,
Finn