Lessons from the Pros

Specialty Skills

Are You Doing the Same Thing in your Trades and Expecting a Different Result?

I would like to ask you a question: “How is your trading going?”  Now, there are a number of ways to answer this question and if you are not doing well then the answer could be painful as it conjures up images of losses that inundate your trading landscape.  You might be failing to allow your individual trade plans to play out by second guessing them and therefore prematurely exiting.  You might be failing to follow-through with your rules and imploding at the slightest challenge in the charts.  Or, you may be failing to keep your commitments to smart; goal oriented trading where you maintain a focus on the most important aspects of the trade.  These scenarios are just a few of the issues that you may be severely tested by and if that’s the case then you’re more than likely in a lot of pain while asking yourself the question, “How do I stop this bad dream?”  Actually, the one thing that you know regarding this stream of negative events is that you can’t continue on the same path…in other words you’ve got to change.  But, what do you change?  Which part of your trading process do you deconstruct and reformulate.  Those of you that are asking these questions are at the least going in the right direction.  Unfortunately, for many of you, the questions about change have not occurred to you yet; and, you are caught in a spiral of the same old mechanical data analysis, processing, and planning, along with the same old internal data negative thoughts, errant emotions and fragmented behaviors.  For those of you who are unfortunate enough to be caught there it is not just a bad dream…it’s a nightmare.  In other words, you’re doing the same thing over and over and expecting a different result.  And, yes, this cliché may be a bit worn but it’s no less relevant. And, yes, it is still insane to think that you could get a sandwich out of a bubblegum machine, no matter how many nickels you put in.


Change is ubiquitous; it’s all around us all the time.  What is also true is that in light of change, humans are paradoxical creatures of habit and we are programmed to travel the same routes, eat the same foods, say the same things and respond to similar stimuli in the same way.  Habits, especially bad ones, are created so easily that after a while if we’re operating by default, we descend into a rut; just like the groove on a scratched vinyl record.  (I know that there may be a few of you who are saying, “What is a vinyl record?”  Well, suffice it to say that it’s an ancient holdover from the last century as a way to listen to music.) Or, the rut that is made in the mud by vehicles on a dirt road after a heavy rain…and when those ruts dry it becomes extremely difficult to navigate because those ruts have become concrete-like.  This is how it might feel when you attempt to do something different in a trade; for instance, the price action is moving toward your stop and you emphatically tell yourself that you are NOT under any circumstances going to move that stop.  You say it over and over as the price-action gets closer and closer…then it’s like a phantom hand reaches over and forces your hand to click on that stop and move it – or worse yet, take it out.  How do you feel?  Well, immediately afterwards you may feel relieved…maybe even good because you have dodged that bullet (in your mind); but, a few moments after that you feel like something that you stepped in last night…something mushy, wet and very smelly.  Now, you did tell yourself a number of times that you weren’t going to do that.  But, you did it anyway, and you’ve done it many times before.  This type of commitment violation is exactly what must be changed.  And, it must be changed fundamentally from the inside out if it is to be real and substantive.  But, how do you begin to make that change?  Change can be very difficult…as many of you know so well.

Doing the same thing in the same ways fosters a level of familiarity and is comfortable…even those habits that are not in your best interest.  Comfort and pleasure are what you seek and by the same token you want to avoid discomfort and pain.  Now, what is paradoxical is that in your determination to avoid discomfort and pain you’ll actually cause it; by succumbing to an archaic ego driven defense mechanism that had been created ostensibly when you were quite young and that is now running roughshod over you to make sure that you don’t “get yourself into trouble.”  How does this happen?  Well, when you were young, let’s say a toddler and you broke something that mommy really liked, you were yelled at and felt shamed; or in early elementary school and you were called upon to answer a question and you didn’t know the answer prompting cruel laughter from your classmates and a stern disapproving look from the teacher, you felt humiliated.  Then, your all protecting ego would say, “…see, you are bad because you made mommy angry so you mustn’t play or you’ll get hurt,” or “…you are not smart so you must be quiet so that you don’t get hurt again.”  These experiences and others like them create what is called a neural network of encoded sense stimulations of these experiences/events; in other words everything that you saw, heard, felt, smelled and tasted along with thoughts and emotions become connected.  This neural network of brain cells are connected electromagnetically and electrochemically to these sensory stimulations and will “fire” every time a similar experience/event happens in your life.  So, as you grow similar things happen, you break something, or people laugh at you, or you do something that otherwise incurs the ire of those in authority or that you look up to.  Then your ego says, “…see, I told you, that is not for you to do because you are not good enough, smart enough, talented enough or deserving,” or whatever else it might have associated to this original experience.  These become unconscious conversations that lurk below your awareness level and that conjure up all manner of additional negative emotions like disappointment, rejection, anger, frustration and many others.  This is how neural networks get connected to other neural networks and they form very strong barriers between you and effectively challenging yourself in order to grow.  These neural networks that continue to fire together will “hardwire” together meaning that they become like that deep rut or cavernous scratch in a vinyl record.  When that happens the default behavior (moving the stop) then becomes avoidance and anxiety based.  You are then operating from a position of fear.  This type of default behavior strives to remain in the comfort zone where there is no growth.  You cannot grow in your comfort zone, you must get out.  Growth requires stretching, tearing, and breaking out of old tissue physiologically and old psychic constrictions psychologically.

To put it another way, as you grow from a child, you form relationships with everything around you,… people, places, things, creatures and the like.  Each one of these relationships has an internal depiction or (neural network) that is represented by all the chemical reactions in your brain that represent that relationship including the feelings and emotions.  If you change that relationship then the network breaks and reforms.  Think of how it feels to break up in a relationship with someone.  It is quite painful and fraught with emotional turmoil, and that is a good break-up.  That is how change occurs on any level of your thinking, feeling and doing.   Of course, you must be willing to endure the discomfort that often comes when you endeavor to change.  There is no significant change in your thinking, feeling and doing that happens from the outside in.  All real and lasting change in your internal data (thinking, feeling and doing) takes place from the “inside out.”  So you must be willing to not only go outside of your comfort zone, but be prepared to remain outside of it as you “grow.”  You must be willing to be uncomfortable in the service of achieving your highest and best trading goals and your A-Game.  You must deconstruct the programmed limiting and irrational beliefs (thoughts); reformulate positive emotions in order to behave differently under the same circumstances (the trade).  Behavioral change begins with changes to how and what you are thinking which means you must be willing to be self-aware and drill down into those unconscious conversations through self-reflection and introspection to identify what you are telling yourself or believing when you are in the throes of “moving that stop” or “exiting a trade prematurely.”  It’s not easy but the process is fairly simple.  It takes courage, determination and passionate energy that come from the deep desire to be a consistently successful trader and the deep desire to manage your internal state (thoughts, emotions and behaviors).  One of the ways to help you in this process is to use the tools that we teach in “Mastering the Mental Game” On-location and Online course.  Ask your Online Trading Academy representative for more information.  Also, get my book; “From Pain to Profit: Secrets of the Peak Performance Trader.”

Happy Trading,

Dr. Woody Johnson



DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

Join over 170,000 Lessons from the Pros readers. Get new articles delivered to your inbox weekly.