Thread by @TraderTPayne

Stop Trading With Your Monkey Mind
(You won’t get rich without doing this):

Traders,

Your thought process is being hijacked by a primitive monkey mind. 95% of traders don’t realize it, or can’t defeat it. The other 5% get rich. We all use the same tools to trade the same stocks, so why do you keep losing money? Your monkey mind owns you. Keep reading...

Our subconscious mind creates habits to increase the efficiency of our brains. Anxiety is our brain’s alarm system to protect us from danger. These are very important tools, but they originated long before the stock market existed.

These primitive survival tools worked great in the jungle, but Wall Street has turned them into a money making machine. Almost any failure by rookie traders can be linked to a mindset that has not adapted to the market environment.

We are built for survival. Our brains constantly scan for threats, and if one is detected then our brain is programmed to flood the body with stress hormones and go into survival mode. Your brain is hijacked. This is why you feel sudden urges to break your trading rules.

When fear strikes, your fight or flight response overrides your thought process, and anything you were focusing on before is pushed to the side while fear influences your behavior to neutralize the “threat.” You must write down your rules. “Mental reminders” will be pushed aside.

It is in our DNA to be scared of heights, spiders, snakes, etc. We “automatically” know how to handle these threats. The problem is when we face threats that are new to us, like losing money in stocks. Our brain triggers racing thoughts and hopes one of the “guesses” is correct.

People become slaves to emotions because they think they are supposed to feel this way since their body is telling them to. Sometimes emotions are just monkey mind “guessing” how you should feel based on previous experience. Its your choice to confirm or deny that “guess.”

Our monkey mind knows a mistake could get it kicked out of its tribe and threaten its survival so it must hide mistakes or do anything to justify them. Its OK, if your stock pick is wrong then I promise you won’t get kicked out of your tribe and starve to death. You will survive.

Humans lived in tribes for survival which created strong family and social bonds. Your survival depended upon fitting in with a group. This is why you are easily persuaded by all the other sheep investing with wool pulled over their eyes. It isn’t natural to go against the crowd.

Monkey mind knows not to misbehave when a bigger and more dominant group mate is watching. In the stock market, you are your own boss. You can do whatever you want and nobody can stop you from misbehaving - what a perfect time for monkey mind to go wild and break the rules!

You get an urge to take small profits quickly due to fear because monkey mind is telling you “Only 2 steps into the water to grab the fallen fruit and then DASH back to safety!” No matter what monkey mind says, I promise you...crocodiles aren’t going to steal your stock profits.

Monkey mind knows it should freeze to prevent detection from a predator. When you are in a losing trade you get scared, turn your screens off, cross your fingers, and hope your money comes back. Monkey mind is telling you to freeze and hope the threat will go away on its own.

Your monkey mind doesn’t know what hides in the darkness of the cave or below the surface of the water. It fears the unknown and seeks comfort in its own habitat. You buy and sell out of fear because “danger could be lurking around the corner.”

Anticipating future scenarios is one of the greatest adaptations of the human brain, but it brings the side effect of seeking certainty. People obsess and try to perfect the future, and then get thrown off when it doesn’t go as planned. Monkey mind is so disappointed in you...

If a task is taking longer than expected to complete, feelings of frustration kick in to warn monkey mind that it should go find an easier task instead of wasting time and effort. When trading, monkey mind gets frustrated if you don’t get the reward right away. It says “Move on!”

Monkey mind knows if it collects more fruit it will survive and feed its family. When you trade small and your stock goes up, monkey mind says you should of collected “more fruit.” You go big on the next trade, and monkey mind learns a lesson the hard way.

You missed a buy signal and the stock shoots to the moon. Monkey mind feels the gut wrenching FOMO. It tells you to bet the farm because it doesn’t understand markets, it only cares about “fixing” the gut wrenching FOMO.

Fear of uncertainty drives traders into confirmation bias (seeking info that reassures them, ignoring info that doesnt). Some see what they want to see, other people see the truth. Monkey mind needs to be pampered with reassurance. Do you want to feel comfortable...or get rich?

Instead of obsessing over the things your monkey mind thinks might happen, you must simply remain on alert and react to what is actually happening. Monkey mind always thinks danger is right around the corner. Its OK, you have trading rules to protect you.

Instead of viewing emotions as an overwhelming force, view them as whiny little monkey trying to do its job of protecting you. Remember this is the same monkey mind that can get scared of its own shadow. You are smarter than that.

We have natural predispositions and instincts. We learn habits and behaviors throughout our lives. By the time we are adults and enter the stock market, we are full of habits and tendencies incompatible with trading. Luckily, we can fix this by creating new neural circuits.

Your monkey mind learns from you. If it tells you to freeze in fear, but you continue anyways and prove that everything is fine, then it will say “sorry about that, next time I won’t be so quick to sound off the alarms.” You’re the teacher, and monkey mind is a very good learner.

The most valuable advice for any trader is to study yourself. Pay attention to your thoughts, desires, fears, and subsequent behaviors. Habits can be created unknowingly, and since habits are responsible for 40% of your daily decisions, you should know who is calling the shots.

Millions of people compete against each other in the financial markets, but your most challenging enemy will always be yourself. That is how powerful you are. Your future literally depends on YOU.

Stop searching for a magical formula or secret indicator, and instead start focusing on self growth, psychology, and discipline. Richard Dennis said, “You could publish my system in the Wall Street Journal but nobody would have the sense to follow it.”

He knew about monkey mind.

Think of your favorite trader:

Are they superhuman?
Do they always get lucky?
Do they have inside information?

No, they are human just like you. They trade the same stocks using the same charts. The difference? They defeated the monkey in their mind. You can too.

Most traders limit themselves to technical and fundamental analysis, but the most important part of trading is mental analysis.

You must understand how your emotions and beliefs affect your thought process and behavior.

A winning mindset is your edge.

Champions know this.