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Market Mechanics Ep 22: Trading Psychology — Transcript

by Brad Goh (The Trading Geek) · 8,142 words · 1,400 segments · language en · Watch on YouTube

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0:00A lot of traders think that the biggest
0:01problem is strategy. But more often than
0:04not, the real problem is emotion.
0:08Fear makes you hesitate. Doubt makes you
0:11second-guess yourself. FOMO makes you
0:14rush into a trade even though there's no
0:16opportunity. Anger makes you want to
0:19revenge trade and just continue trading
0:22to make back the loss that you've just
0:23incurred. And frustration makes you
0:26break your trading rules. You already
0:28know that you should follow.
0:30So, even if your strategy is solid,
0:33because of emotions, your execution
0:35keeps falling apart.
0:37That is why in this lesson, I want to
0:39talk about trading psychology. And how
0:42to actually manage the emotions that
0:44show up when your real hard-earned money
0:47is on the line.
0:49The goal is not to be emotionless. The
0:51goal is to stop letting those emotions
0:53control your decisions.
0:56And once you learn how to master these
0:57emotions, which is what we're going to
0:59cover in this lesson, right? FOMO,
1:01anger, fear, all these emotions.
1:04What happens is that your execution
1:05becomes a lot cleaner, which ultimately
1:08means you become more profitable.
1:10Right. So, with that being said, let's
1:12dive into the lecture. 95% of traders do
1:15not fail because of a bad strategy. They
1:18fail because of a flawed paradigm.
1:21Now, what is a paradigm?
1:23Your paradigm is the lens through which
1:25you see reality. Your paradigm is the
1:27way you see the world. Your paradigm is
1:30the way you perceive the markets.
1:34It is formed by what you believe, how
1:36you think, and who you believe you are.
1:40Because we don't see the market for what
1:41it is. We see it for who we are.
1:45This is the first important lesson that
1:46I wanted to grab for today. We don't see
1:48the market for what it is, we see it for
1:50who we are.
1:51We are looking at the market thinking
1:53that price is going to go up right now.
1:56But does that mean that price is
1:58actually going to go up? No, because
2:01that's just our bias of the market.
2:04That's just our perception of the
2:06market. We perceive prices being cheap
2:08right now at a discount. But, that
2:10doesn't mean that price will not go down
2:12any lower.
2:14So, we don't see the market for what it
2:16is. We see it for who we are.
2:18And right now, your current paradigm is
2:20running on an old program.
2:22One that was never designed for
2:24consistent profitable trading.
2:28Most traders think they're making
2:29decisions consciously.
2:31But, the truth is most of their behavior
2:32runs on autopilot.
2:35Because, believe or not, but around 95%
2:38of your daily actions are driven by your
2:39subconscious programming.
2:42When you brush your teeth, when you wash
2:44your face, when you eat lunch or dinner,
2:46when you watch a certain Netflix show at
2:48a certain time, when you go on to the
2:50markets and uh
2:52open up your trading broker and start
2:54trading,
2:55all of these run by your subconscious
2:58programming, which is comprised of your
3:00belief, your habits, and your emotional
3:02reactions.
3:04It's like press- pressing play on a
3:06program that's already been written. And
3:08every single day, that program just
3:10keeps running in the background.
3:13So, if your internal program is built on
3:16fear, doubt, bad habits, that's exactly
3:20what will show up in your trading.
3:23Which is why most traders don't fail
3:26because of strategy. They fail because
3:29of their programming.
3:35And that's not a criticism. That's
3:37simply where most traders start. Like I
3:38said, I know it because I was there,
3:41too.
3:42I was
3:43awake. I was blind.
3:45But, now I see.
3:48And the reason I'm pointing this out is
3:49because you cannot change something you
3:52haven't identified yet.
3:54You cannot fix the problem
3:56without understanding the root cause of
3:58the problem. You cannot become
4:00profitable unless you understand why you
4:02are failing.
4:05Because your current results are a
4:07reflection of how you see the market.
4:12And the way you see the market is shaped
4:14by your paradigm.
4:17Let me explain.
4:19Your paradigm creates your thoughts.
4:22Your thoughts create your decisions.
4:25Your decisions create your actions. And
4:27your actions create your results.
4:31Quick example. If you believe the market
4:33is cheap right now,
4:35you're going to think that you want to
4:36enter for a buy.
4:37And if you think that you're going to
4:38enter for a buy, next thing you know,
4:39you go on to your broker and you enter
4:41for a buy position. That's the action
4:43that was created by your thought.
4:46And when you enter for a buy
4:48in the market itself,
4:50and the market now reversing against
4:52you, and you get stopped out, that's
4:54your result that is based on your
4:56action, that was based on your decision,
4:58and that is based on your paradigm. All
5:00stem from the fact that you believed the
5:02market was cheap in the first place.
5:07Which means your paradigm is the root
5:09cause of your results.
5:15Most traders try to fix their trading by
5:17changing their strategy. A new
5:18indicator, new setup, new market, new
5:21system. But nothing really changes,
5:23isn't it?
5:26The real shift only happens when your
5:28nervous system changes first.
5:32If your body is still wired for stress,
5:35survival, and the old emotional
5:37patterns, your brain will keep
5:38recreating the same mistakes in the
5:40market over and over again.
5:44This is why you guys commit the same
5:45mistake, like revenge trading, forcing
5:48trades,
5:49overtrading, overleveraging, over and
5:53over again, even though you should know
5:55that you shouldn't be doing it.
5:57This is why.
5:59Because your brain will always default
6:01to what feels familiar.
6:06If you want different results, you
6:07cannot just change your strategy. You
6:09cannot just change your actions.
6:12You have to go deeper than that.
6:14You have to change the program.
6:18And the good news is this. Paradigms can
6:20be changed. Your mind can be
6:22reprogrammed.
6:24And once that happens, everything about
6:26your trading starts to change.
6:28Your decisions become clearer, your
6:30discipline becomes stronger, and the
6:33market finally starts to make sense. And
6:35this is my favorite quote by Carl Jung,
6:37which he said that until you make the
6:39unconscious conscious, you will direct
6:41your life and you will call it fate.
6:46Until you recognize the unconscious
6:48patterns, you are tend to repeat it over
6:50and over again and get the exact same
6:52results.
6:55And this is exactly what happens in
6:57trading.
6:58Most traders believe they're making
7:00rational decisions,
7:02but in reality, their unconscious mind
7:04is making the decision for them.
7:07And it reviews themselves through
7:09something very specific,
7:11which is your emotions.
7:16And this is where it gets interesting.
7:18Every emotion you feel while trading is
7:21not random. It is simply your brain
7:23trying to avoid a specific type of pain.
7:27And the pain usually looks like this.
7:29Fear of losing money, fear of being
7:31wrong, fear of missing out, and fear of
7:33looking stupid.
7:35And once you start to see this,
7:36everything about your trading starts to
7:38make sense.
7:40The hesitation, the revenge trades, the
7:42blown accounts, none of it was random.
7:45It was all just unmanaged emotion
7:47running on autopilot.
7:50Fear, greed, FOMO, hope, and revenge
7:53trading, every single one of these
7:55emotion followed the exact same cycle.
7:58Once again, I'm not going to give you
7:58surface level information like, "Oh,
8:00just just a brief, you know, like like
8:02just just control your emotions, bro."
8:04I'm going to give you the exact solution
8:07on how to combat with each one of these
8:09emotion. You see this cycle right here?
8:12This is the cycle that every single one
8:17of you are going through right now. And
8:19this is exactly
8:21what causes you to lose. That's the
8:22chain that keeping you stuck every
8:24single time without exception.
8:27The cycle never changes. What changes is
8:29which emotion triggers it, which pain is
8:32trying to protect you from, and how much
8:34it ends up costing you. So, now I'm
8:37going to go through each emotion. Like I
8:39said, fear, greed, right? Doubt, FOMO,
8:42revenge trading. All of those emotion
8:43that I just shared with you guys, I'm
8:45going to go through each one of these
8:46emotion and tell you guys how to solve
8:48that emotion. Because I know that a lot
8:51of you guys are just controlled by these
8:53emotions when you are trading. And when
8:56you are controlled by them, you are
8:58unconscious and you are your body like
9:00just starts to move in a way where like
9:02as though it's it's gotten possessed or
9:04something. So, I'm going to go through
9:06each emotion and I'm really just going
9:08to show you how to solve each one.
9:10First emotion is fear. Fear in trading
9:13is the moment when your setup is right
9:15there. Everything lines up. But your
9:17friend freezes on the mouse. You
9:19hesitate. You second guess. You talk
9:21yourself out of it.
9:23And fear isn't random, okay? This is not
9:26some random emotion. It's simply your
9:28brain trying to protect you from the
9:29pain of being wrong.
9:32Because think about it, thousands of
9:34years ago, back when we were
9:35hunter-gatherers,
9:37being wrong could literally get you
9:38killed. Shoot. You go out in the jungle,
9:41you pick the wrong food, you eat the
9:42wrong food, you die.
9:44You misread a threat like a saber-tooth
9:45tiger or like a freaking mammoth just
9:48like this, you die.
9:50You make the wrong decision, you die.
9:53You don't get a second chance.
9:56So, that fear
9:58has been conditioned into us for
9:59thousands of millions of years.
10:01So, that is where your brain learned one
10:03thing.
10:04Just avoid being wrong at all costs.
10:07That's what fear really is. And now that
10:10same wiring is showing up in your
10:11trading.
10:13And here's the irony.
10:16When you don't click the buy and sell
10:17button, you think you're playing it
10:19safe.
10:20But what you're actually doing is that
10:22you're collecting less data.
10:24Which means you're building less
10:25conviction, which makes the fear even
10:28stronger.
10:30As a result, hesitation breeds even more
10:33hesitation.
10:36So, remember the cycle I just showed you
10:37just now? Let's apply that cycle to
10:39fear.
10:41Fear, that's the emotion, right? You are
10:43scared to press the buy and sell button.
10:46You are scared of
10:48the market. You're not sure whether the
10:50trade will actually play out or not.
10:51Fear.
10:53The pain that you avoided in this case
10:55is the pain of being wrong.
10:57Like I said earlier, your brain is
10:58conditioned to avoid the pain of being
11:00wrong.
11:01The behavior in this case is that you
11:03skip the trade.
11:05You see the nice setup that is aligned
11:06with the trade plan, but you skip it
11:09because you're scared.
11:11You're scared of uncertainty. You're
11:13scared of what could possibly go wrong.
11:15Outcome?
11:17You miss a setup.
11:19And when you miss a setup, you are
11:20inconsistent with your actions.
11:23And you start doubting if your system
11:25even works.
11:27Once again, you're not collecting
11:28sufficient data. And if you're not
11:30collecting sufficient data because
11:31you're not taking enough trades, then
11:33how can you have confidence in your
11:34system? Now, what's the solution? What's
11:36the solution to fear?
11:38It's very simple. It's to remove
11:40yourself from the decision.
11:42It's to remove emotion from the
11:44equation.
11:46Easier said than done, huh?
11:49Now, instead of giving you like
11:51motivational I'm going to give you
11:52an actionable step.
11:54Before the market opens, I want you guys
11:56to write down your entry criteria.
12:00For example, if price steps
12:03the supply zone and there's a liquidity
12:04sweep, I enter.
12:06If not, no trade.
12:08That's it. You need to have like a very
12:09simple if-then rule, just like this, so
12:14that you are mechanical when it comes to
12:16the way you execute your trades.
12:19That's it. Binary yes and no decision.
12:24This is where you stop asking, "Hmm, do
12:26I feel like this is a good trade?"
12:29And you start asking, "Did my rules
12:31actually trigger?
12:32Is this trade actually aligned with my
12:34trade plan?"
12:37And here's something that I've learned
12:38back in the military.
12:40Fear only exists before you do the
12:42difficult task. Before you go out to the
12:445-day, 4-night mission in the jungle,
12:47before the live shooting, before the
12:49fitness test, before you step into the
12:52unknown.
12:54But once you move, once you put on the
12:56helmet and the goggles and the night
12:58vision goggles and you put your
12:59camouflage on and you take your first
13:01step into the jungle, once you commit,
13:04once you do the thing, the fear starts
13:06to disappear.
13:09It's the same thing here in trading.
13:12Fear only exists before you click the
13:14buy and sell button.
13:16Once you enter the trade,
13:18just detach from the outcome.
13:21Let the rules decide. Let the market
13:23dictate the outcome.
13:26And when I do that, the fear just
13:27disappears.
13:29And I want you guys to remember what
13:30fear stands for. It simply stands for
13:33false evidence appearing real. F E A R.
13:37Okay, so remember that going forward.
13:40So, that's how you combat fear.
13:43Next, I'm going to go through greed.
13:45This is how I define greed.
13:47Greed is the urge to squeeze more out of
13:50the market than your edge allows.
13:55After a winning streak, you feel
13:56invincible. If you're on the top of the
13:57world, you start oversizing. You start
14:00trading London session, New York
14:02session,
14:04Asia session. You You trade every single
14:06hour. You chase every single possible
14:08setup because you don't want to leave
14:10money on the table.
14:13And then one trade, you size up. You
14:15know, you ramp up the lot size because
14:16you feel unstoppable. You feel confident
14:18that you could make it.
14:20And that one trade become a big loss
14:23that wipes out everything you made that
14:24week.
14:27Now, who has suffered this situation
14:29before? Where you end up giving back all
14:31the profits that you've made back to the
14:33market. Now, let's apply this same cycle
14:35to greed.
14:37So, once again, this same cycle.
14:40First, greed. That's the emotion, right?
14:43You get greedy after a winning streak.
14:44You start feeling euphoric. You start
14:46feeling overconfident. You start feeling
14:48invincible.
14:50That causes you to take more trades.
14:52Greed.
14:53The pain avoided is missing opportunity.
14:57Right? Guess what? When you're greedy,
14:58you don't miss opportunities, right?
15:00Because you're catching every single
15:01opportunity that presents itself in the
15:03to you.
15:04And the behavior is oversizing,
15:07overtrading, and ignoring the trade
15:09plan.
15:11Okay, so you start ramping up your lot
15:12size. You start ramping up your
15:14leverage. You start taking more trades
15:16that's outside of the trade plan.
15:18And guess what?
15:20Whatever money that you made so far gets
15:22donated back to the market.
15:24Oh, you are up $5,000?
15:26No biggie. You just gave back
15:29$6,000 to the market.
15:31Oh, you made 10K today? Well, tomorrow
15:33you just lost 10K. So, every single
15:36dollar or pound or yen or whatever
15:38currency that you have right now gets
15:40donated back to the market all because
15:42of greed. Here's the thing about trading
15:43that most people don't understand.
15:46This is not a job that pays you based on
15:48the amount of hours that you work.
15:52In trading, you don't get rewarded for
15:54effort. You get rewarded for making the
15:56right decisions.
15:59So, just because you spent 12 hours a
16:01day on the charts doesn't mean that you
16:03are going to become profitable.
16:05Unless you're making the right
16:06decisions, taking the right trades.
16:10So, what's the fix to greed then?
16:13Now, once again, I'm going to give you a
16:14actionable step that you can take to
16:16combat this emotion. I'm not going to
16:18say stupid like, "Oh, bro, just
16:20control your emotions and you'll be
16:21fine, man." I'm going to give you an
16:23actionable step.
16:24Before the market opens, I want you to
16:26set your ceiling.
16:27Okay, so
16:29it could be time-based, it could be
16:31trade-based,
16:32it could be profit-based, right? So, you
16:35just want to set a ceiling just like
16:36this. I'm only going to be trading for 2
16:38hours. I'm only going to take three
16:39trades maximum. And once I made 2% or 3%
16:43or whatever ceiling that I set for
16:44myself, I'm done.
16:46I'm done.
16:48Whatever your ceiling is, you need to
16:50decide it before the market opens.
16:53Not when the volatility starts kicking
16:55in and you start getting emotional. Not
16:57when you are in the middle of a winning
16:59streak.
17:00Before the market even opens, you have
17:03your goal.
17:04So, that when you hit that goal, you're
17:05done. You close your laptop, you go for
17:07a walk in the park, you'll go and walk
17:09your dog, or you'll go and spend time
17:10with family, whatever. That's the fix.
17:13If you hit your target early, you close
17:15the laptop.
17:16Okay? Like I said, non-negotiable. And
17:19once again, this is not you backing down
17:20like a whim. It's you acting like a
17:22professional.
17:25Because success isn't about making the
17:27most amount of money today. Success is
17:29about is about executing your edge with
17:31discipline today so that you can
17:34consistently make money in the long run.
17:37That's great, right? So, the reason why
17:39like I said, I want to give you the
17:40action
17:41actionable step. I don't want to say
17:43some woo-woo like, "Yo, man,
17:45you just got to like go and look in the
17:46mirror and tell yourself that I'm not
17:47greedy 100 times a day and the greed
17:49will magically disappear overnight." No,
17:51that doesn't work, all right? I'm
17:52sharing with you what works.
17:54Okay? Once again, all of this emotion, I
17:56faced it multiple times throughout my
17:58entire trading career. That is why I can
18:00give you the solution because I faced
18:02the demon, I slaughtered the demon, and
18:04I know the solution. And now I'm giving
18:06you the sword to to slaughter that same
18:07demon yourself.
18:09The next emotion is fear of missing out.
18:13FOMO is when you see a candle running
18:15hot and you jump in late because you're
18:17terrified of missing the move.
18:19That's how I define FOMO.
18:21And then
18:22price immediately reverses and stops you
18:24out
18:25because you weren't in the trade at the
18:27right place at the wrong time. You were
18:29in the trade at the emotional place.
18:33Now once again, let's apply the same
18:34cycle to FOMO, which is like I said,
18:36fear of missing out.
18:37Emotion? Fear of missing out.
18:40Pain avoided? Missing opportunity. All
18:42right, you are scared to miss the
18:44opportunity that's in front of you.
18:46Behavior? You enter way too late.
18:49And when you enter way too late, what
18:50happens is that your stop loss is
18:51usually way too wide.
18:53And now you're chasing momentum rather
18:55than chasing the trade that is actually
18:58aligned with your trade plan. Now you're
19:00chasing money rather than attracting
19:02money.
19:04And when that happens, you get trapped
19:06at the worst possible price
19:08and you take the loss which could be
19:10avoided.
19:12That's what FOMO does to you.
19:14And here's what I need to understand.
19:17The market has always been here for
19:19decades, okay? Like it's been here for
19:21decades. It's been here since your
19:22grandfather was born, and it will be
19:24here for decades more. It'll be here for
19:27your grandson. It'll be here for your
19:29great granddaughter. It will always be
19:31here. There will always be another
19:33setup.
19:35Opportunities don't run out. They just
19:37rotate.
19:39Missing one trade doesn't mean losing.
19:43It just means the next one hasn't shown
19:45up yet.
19:47So, what's the fix for FOMO?
19:49The fix is, if you weren't prepared for
19:52a trade, it was never your trade to
19:54begin with.
19:55So, do not take the trades that you are
19:57not ready for, because those are the
19:59trades that is outside of your trade
20:01plan. And if you miss trades that is
20:02outside of the trade plan, then
20:05by definition, those are not your trades
20:07to begin with. Because remember, it's
20:09not the first good trade, and it's
20:11surely not the last.
20:13You need to adopt this abundance
20:15mentality,
20:16where there's so much opportunities in
20:18the market.
20:20Just like waiting for the bus, another
20:22one is always coming.
20:23Okay? So, abundance mentality is the
20:26solution to FOMO. When you believe that
20:29there's always going to be opportunities
20:31every single hour in every single
20:32market, every single day, you will not
20:35be tempted to actually rush into a bad
20:38trade. Next one is hope. Okay, the next
20:41solution is No, the next problem is
20:43hope.
20:44Okay, this is like
20:46a lot of you guys don't know that this
20:47is actually
20:49a problem, but it is indeed an emotion
20:51that can actually impair your
20:52decision-making. Okay, hope. Let's dive
20:54deep into this.
20:56Because this is the underrated one. Hope
20:58is when you're in a losing position,
21:01and instead of cutting it, you move your
21:03stop loss, make it even wider, you know,
21:05make it a little bit further away and
21:07pray to the market, to the universe the
21:10price will eventually reverse and go
21:12back into profit.
21:14Hope is when you're already down $3,000.
21:17But, you know,
21:19I want the market to reverse, so I'm
21:20going to move my stop loss a little bit.
21:21And then you go into a drawdown of
21:23$4,000 and then $5,000. You refuse to
21:26cut the loss early.
21:28And here's why I consider hope
21:29dangerous.
21:32It's because you are literally
21:33outsourcing your responsibility to
21:36chance.
21:40Now, let's apply this same cycle to
21:41hope.
21:43Emotion, hoping you get out of a
21:44drawdown, hoping price will eventually
21:47reverse and go in your way again.
21:49Pain avoided, accepting that you are
21:51wrong, right? Because
21:54if you don't get stopped out, you're not
21:56wrong, right? Like technically, you are
21:58still
21:59uh you're still correct, right? Your ego
22:01doesn't get bruised.
22:02The behavior, you move the stop loss,
22:04you hold on to a losing position, and
22:06you pray.
22:08Okay, you just pray that oh, price will
22:09eventually go up. Outcome, small loss
22:11becomes a big loss.
22:13Discipline erodes and your account
22:15crashes.
22:19This is how
22:20one loss, you could have lost 1%, but
22:23you continue trading, now you lose 5%.
22:25You could have just blown one account,
22:26but you continue trading and you lost
22:28five accounts. This is why it's hope.
22:31There's a version of this that every
22:32trader knows. The person who just keeps
22:34on moving their stop loss further and
22:36further away. Not because it's part of
22:38the plan, but because they cannot face
22:39being wrong.
22:42And every single time you choose your
22:45ego over making money, you are funding a
22:48war against yourself.
22:51And the only way to win in trading is to
22:53stop funding that war.
22:57Bro, when I actually wrote this sentence
22:59down, I was like mind-blown by how true
23:02this is.
23:04Because
23:05in trading, you can either choose your
23:07ego or make money, but you cannot have
23:09both.
23:11So, what's the fix then?
23:13The fix is you want to place your stop
23:14loss at a price point which invalidate
23:17your trade idea before you enter the
23:20trade.
23:21Not during, not after, but before you
23:23enter the trade, and you never move it
23:25further away.
23:26Once price hit your stop loss, you're
23:28out.
23:29No negotiating, no waiting for one more
23:31candle, no hoping. You're done. You're
23:34out.
23:36All right, so that's the mechanical
23:37solution to fix hope.
23:39And there's a technical solution. This
23:41is a psychological solution, okay?
23:43Psychological solution is to just accept
23:45the fact that losses are good.
23:48Losses are not failures. Losses are not,
23:51you know, scoreboard not scoreboard that
23:52tells you that you're at trading.
23:54Just because you lose money doesn't mean
23:56that you suck at trading.
23:58Losses are simply the cost of doing
24:00business.
24:02And every business has expenses. Rent,
24:05fuel, staff, overhead.
24:09Losses are your expenses.
24:12When you accept that losses are a
24:14mandatory part of trading, you will
24:17never ever get rid of them. It's
24:18inevitable.
24:19This thing start to disappear.
24:21And you stop needing the market to save
24:23you. And more importantly, you stop
24:25needing the market to validate you.
24:30Because remember, guys, you cannot
24:32control what the market does, but you
24:34can control what you do on a day-to-day
24:36basis. You can control how you show up
24:39every single day. You can control your
24:42process. You can control whether you
24:44journal the trade, whether you follow
24:45your trade plan or not. And that's where
24:48you should invest your time, energy, and
24:50attention to.
24:53Once stop loss is hit, close the trade,
24:54move on to the next setup. That's it.
24:56Right? that's the solution to hope. You
24:58respect the stop loss.
25:02Next up, we got revenge trading.
25:04Man.
25:06Okay, people.
25:08How many accounts have you guys blown
25:09because of revenge trading? Be brutally
25:11honest in the chat right now. How many
25:13accounts have you blown because of
25:14revenge trading? Six, three, five, two.
25:18Damn, okay.
25:20You can see a lot of people have blown
25:21accounts because of revenge trading,
25:23yeah?
25:25I blown seven in my first year. First
25:27year alone, okay? If I count my other
25:29years, probably like 10, 15. I don't
25:32know. A lot of freaking accounts. Like I
25:33I lost track of counting.
25:36So, yeah. It's good to see that
25:37everybody has revenge traded before.
25:39Because who haven't revenge traded
25:41before?
25:42This one is honestly the most
25:44destructive of all. I believe that this
25:47is the one that causes you to lose the
25:48most amount of money.
25:51You take a loss, and instead of
25:52accepting it and moving on, something
25:55ignites inside you.
25:57You need to make it back right now. So,
25:59you take another trade and another
26:01trade.
26:02Each one with a bigger size and less
26:04thought through than the last one.
26:07And then eventually blow up.
26:10Right? All because you feel this need to
26:12prove to the market that you are right
26:14and the market is wrong.
26:15You feel this need to prove everyone
26:18else wrong.
26:20No, you don't blow up because of a loss.
26:23You blow up because you kept trading
26:25after the loss.
26:27This is the uncomfortable truth that
26:29everybody need to like come into
26:30consensus with.
26:32You don't blow up because of a loss. You
26:34blow up because you keep trading after
26:36the damn loss.
26:38Yeah, and above that, it's like you're
26:39not trading the market anymore. You are
26:42trading your mental well-being.
26:45Ah. Such great quotes. Like bro, like
26:48these are the tweets that I actually
26:49share on my Twitter account, by the way.
26:51Like what have you guys see on the
26:52screen? I literally write this stuff,
26:54okay? So, so it's not some random
26:56ChatGPT nonsense that I generate on the
26:57screen. I actually write this stuff. So,
27:00when I say something just like this,
27:02I'm like having a mind orgasm because,
27:04bro, that's true. You're not trading the
27:06market anymore. You are trading your
27:09mental well-being. Now, let's apply the
27:12same cycle to revenge trading.
27:14Emotion,
27:15anger, frustration, humiliation after a
27:19loss. Right? Uh,
27:21you know? I want to punch my monitor.
27:24Been avoided? Admitting defeat.
27:27Been avoided? Being wrong. I don't want
27:29to be wrong. I don't want to admit
27:30defeat. I'm a I'm
27:32I'm not a quitter, man. The god hates
27:34quitters, right? I'm not a quitter. So,
27:36I'm going to you know, continue like
27:38press the buy button all the way until I
27:40actually make it.
27:42Admitting defeat.
27:43Behavioral retaliation traits.
27:45Oversizing.
27:47Re-entering
27:49the market immediately.
27:52Outcome? One bad trade becomes five. One
27:55red day becomes a blown week. Small
27:57losses turn into big losses.
27:59You compound the losses
28:01because you couldn't accept the fact
28:04that you are wrong.
28:07Here's the harsh truth about the market.
28:10The market doesn't care about you.
28:14It doesn't owe you anything.
28:17In fact, it doesn't even know you exist.
28:22So, why are you taking the losses
28:24personally?
28:26The market doesn't care about
28:28your race, your height, your religion,
28:31your background,
28:33your political belief.
28:35It doesn't give a about you. It
28:36doesn't even know you.
28:38It's a stranger to you. So, why do you
28:41care about what the market think about
28:43you?
28:45Why are you taking the losses
28:46personally?
28:50Once again, my self-shame.
28:52Every stop up is feedback. Every loss is
28:55information.
28:57Every single trade you take is data
28:58points for you to improve.
29:01The traders who grow from losses treat
29:02them as lessons. The traders who blow
29:05accounts treat them as personal attacks.
29:10Let that sink in for a minute.
29:12So, what's the fix then for revenge
29:13trading? The emotion that, you know,
29:17causes all of us to like uh
29:19like causes all of us to be paralyzed.
29:21The fix is what I call the 10-minute
29:23rule.
29:24Just like what the name pretty much
29:26suggests,
29:27after any loss, I want you to step away
29:30from the screen for 10 minutes minimum.
29:32Okay?
29:33I don't care what I have to do. I don't
29:35care whether I have to like close your
29:36laptop, or you have to throw your laptop
29:38off the window, off the balcony, I don't
29:40care. Now, don't don't do that, of
29:42course. But like, just step away from
29:45the screen, right? Maybe lock your
29:47phone, lock your laptop somewhere, make
29:48it out of reach for 10 minutes.
29:51Every single time I take a loss,
29:53stop, pause for 10 minutes, no
29:55exceptions.
29:58And
30:00I also use what I call the no trade
30:01rule.
30:02So, on top of the time limit that I give
30:04myself, I also give myself like another
30:06trade limit.
30:08I will never enter the very next candle
30:10after a loss.
30:12So, today if I take a loss,
30:15shut my laptop down. I don't look at the
30:17next candle, what the next candle is
30:18going to do, and enter again. No, I
30:19don't enter the very next candle after
30:21the loss.
30:22This way,
30:23a pause is literally enforced into my
30:26trading system before I make the next
30:28decision. Before I take the next trade,
30:30I'm literally forcing myself to pause,
30:34>> [snorts]
30:34>> slow down,
30:36re-evaluate the market again, and think
30:39about whether I want to enter the trade.
30:42If after 10 minutes,
30:44you still see a setup that aligns with
30:46trade plan, then yeah, by all means go
30:47ahead.
30:48But more often than not,
30:51the feeling, the adrenaline that you
30:53face during those
30:54uh that you face right after you take
30:55the loss, it start to dissipate. It
30:57start to fade away because of this 10
30:59minutes rule right here.
31:01And most importantly,
31:03I want you guys to use these 10 minutes
31:05to write down what happened. What rule
31:08did you break and what you would do
31:09differently and then come back. So, this
31:12is where you journal the trade down,
31:13right? Journal exactly what happened and
31:16just introspect over it, just reflect
31:17over it. Like I said,
31:19every loss is a data point. Every loss
31:21is a feedback for you to actually
31:22improve.
31:23Right? So, once you do that,
31:25then you can eventually come back to the
31:26market and re-evaluate the situation.
31:30The reason why I force you guys to do
31:32this, my students as well, is because
31:34you cannot make rational decisions when
31:36you're emotional.
31:38When you're emotional, the emotional
31:40part of your brain overwhelms the
31:41rational part of your brain.
31:43This is why when you are trying to talk
31:46to your girlfriend or boyfriend and they
31:49start getting emotional and all that
31:50stuff, you try to rationalize the
31:52situation to them.
31:54But they they're just they can't hear
31:56you, right? Because they're in the state
31:57of emotional, right? Their adrenaline is
31:59high.
32:00Everything you say to them is like
32:02essentially, you know, one ear in, one
32:03ear out because they're emotional. Same
32:05thing right here. When you're emotional,
32:07you cannot make rational decisions.
32:09So, this 10 minutes isn't negotiable.
32:12It's a law that you must follow.
32:15This 10 minutes alone could save you
32:17thousands of dollars worth of
32:18unnecessary losses down the line. The
32:21next emotion is doubt.
32:23Doubt is when you second-guess your
32:25system even when your setup is right
32:27there in front of you.
32:30Mm, I don't know, man.
32:32I don't know whether the trade will
32:33actually work out or not. I don't know
32:35whether my trade plan actually works or
32:36not. I don't trust myself to take the
32:39the trade at all. I don't know, man.
32:42Now, here's the thing about doubt that
32:43nobody talks about.
32:45Doubt isn't weakness.
32:47Doubt is simply incompetence revealing
32:50itself.
32:52You don't doubt brushing your teeth.
32:55You don't doubt tying a shoelace.
32:58You don't doubt driving
33:00because you've done them thousands of
33:01times.
33:03They are automatic behaviors you have
33:05wired into yourself through repetition.
33:10You doubt your trading because you
33:11haven't built enough reps for it to feel
33:14automatic yet.
33:17Now, let's apply this same cycle to
33:18doubt. Okay?
33:20So, emotion is obviously uncertainty.
33:23Before during and all during a life
33:25setup, you are not sure whether the
33:26trade will actually go in a way. You're
33:28not sure whether your trade plan will
33:29actually work. You are unsure.
33:31Uh you are like
33:33not sure because you're feeling this
33:35sense of uncertainty.
33:38Pain avoided being wrong, right? If you
33:40are not sure, then guess what? It's
33:43better be safe to just not enter for the
33:44trade. And because if you don't enter
33:46for the trade, you cannot be wrong.
33:48It's not rocket science, right? Like if
33:49you don't take the trade, you
33:51you're just going to be 100% right.
33:54100% right, but 99% wrong.
33:57Behavior is that you freeze
33:59or you get out of a good trade. Okay, so
34:01you see the trade setup in front of you,
34:03aligns with a trade plan, bullish
34:04candlestick pattern at this freaking
34:06demand zone.
34:12That's what you do. You You just freeze.
34:14Okay, you just freeze there.
34:16You are too afraid to enter into the
34:18market even though it's right there.
34:21Or you enter into the market, you enter
34:23into the trade,
34:24but price has got reversing against you,
34:26you get out of the good trade.
34:28You convince yourself that oh no, man,
34:31maybe it's not going to go up in my way.
34:33I better get out right now and cut my
34:35loss instead of holding it to my DP.
34:38You get off a winning position all
34:39because of doubt.
34:41Doubt is a freaking virus. It's a
34:43infectious disease that actually like
34:46permeates your entire being.
34:48That's That's how harmful doubt is.
34:51And when you do that, the outcome is
34:53that you miss an entry.
34:55You start getting inconsistent with the
34:57day trades that you take. And the doubt
34:59starts to get stronger.
35:01You start to feed the doubt. You feed
35:02the demon inside you.
35:04Next time the setup appears again, you
35:05stay out of the market. You freeze. You
35:08are scared.
35:10Doubt just breeds more doubt.
35:13So, what's the fix to doubt?
35:15The fix is not motivation. The fix is
35:17evidence. Like I mentioned earlier,
35:21you need to prove to yourself that you
35:23are indeed who you say you are.
35:27You don't build conviction by shouting
35:28affirmations in the mirror every single
35:30day.
35:32I'm going to be the best trader in the
35:33entire world. I'm going to win. I'm
35:35going to make $5,000 today. I'm going
35:37to, you know, buy my dream Lamborghini.
35:40No, that's not how it works.
35:42You build conviction through reps.
35:45Through back testing. Through
35:47following your trade plan. Through
35:49journaling. Through executing. Through
35:51reviewing your trades.
35:54That's what builds conviction.
35:56And once again, say it with me. All
35:58right? Say it with me, okay? Conviction
36:01comes from confidence. And confidence
36:04start comes from competence. And
36:06competence comes from
36:09consistency. There we go. Thank you for
36:13saying it with me.
36:14Even though I can't hear you guys, but I
36:15know some of you guys are actually
36:16saying it right now. I appreciate that,
36:18man. So, every single trade you take is
36:20a vote for the trader that you are
36:21becoming.
36:23Which also means that every trade you
36:25take
36:26and review is a brick in the wall of
36:28self-trust.
36:30Every promise you make to yourself and
36:32keep makes the next decision easier.
36:36I say this to my students all the time.
36:38Every single time you follow your trade
36:40plan, you are literally voting for
36:42yourself to become a disciplined and
36:44consistent trader. And a disciplined and
36:47consistent trader is a profitable
36:50trader.
36:53So, no trade is wasted. Every single
36:55trade you take is a vote.
36:57Doubt is not defeated by positive
37:00thinking.
37:01It's crushed by competence built through
37:03repetition.
37:06I'll give you a quick example.
37:09Back when I was like kind of overweight,
37:10you know, I was overweight because of
37:11bulking and you know, became like
37:13super duper fat.
37:15Every single day I would freaking
37:16manifest and try to like visualize
37:17myself being skinny and jacked again.
37:20For months I would just do that without
37:21going to the gym. So, I just like
37:23visualize but I don't go to the gym.
37:25Do you think I lose fat magically after
37:286 months?
37:30Hell no.
37:32Because I haven't put on the running
37:33shoes and go to the gym.
37:35Same thing right here.
37:37You don't defeat doubt by positive
37:39thinking. You defeat doubt by going to
37:42the freaking gym. You defeat doubt by
37:45building repetition, putting reps,
37:48following the trade plan, journaling,
37:49reviewing, gathering data, refining your
37:52trade plan, improving.
37:55Competence crushes doubt.
37:59Once again, another one of my um very
38:01like famous tweet which performed really
38:03really well. You want consistent profits
38:06but your actions aren't consistent. You
38:08want conviction in your trade ideal but
38:11you have never collected data. You want
38:13confidence in yourself but you have
38:16never done the hard things.
38:18One is simply the price of the other.
38:22Man, such a good trade.
38:25So, ladies and gentlemen, I just handed
38:27you a map of every single emotions
38:30that's been sabotaging you and how to
38:32fix them.
38:33Once again, I didn't go through the
38:35spiritual woo-woo route and tell you
38:37guys to just freaking
38:39you know, look in the mirror and smile
38:41and do affirmations every single day.
38:42No.
38:43I dive into the root cause of each
38:46emotion, let you know what's the pain
38:48that you're avoiding, and also give you
38:50a actionable step, a solution to fix
38:52each one of those emotions.
38:56Like I said, it was never about the
38:59market. It was never about your broker.
39:03And I saw one comment I I saw someone
39:05say this earlier, "The market is hunting
39:07my stop loss." No, it was never about
39:10the smart money hunting your stop loss.
39:12It was never
39:14because of bad luck. It was never
39:15because you are a freaking Asian. It was
39:18never because you are 5 ft tall. It was
39:20never because of your political belief,
39:22your belief, your religion, your race,
39:24or your whatever. It None of None of
39:26that matters.
39:27Until you point a finger back at
39:30yourself,
39:32whatever that you point a finger at will
39:33have control over you, will have power
39:35over you. If you point a finger, the
39:36blame finger at the market, the market
39:38has control over you. If you point a
39:39blame finger at your broker, then you
39:41cannot
39:43actually
39:44become better, right? Because that is
39:47outside of your control. You have been
39:49fighting yourself this whole time.
39:51And now we can finally see it.
39:54Like I said, I was blind, but now I see.
39:59Every single one of those emotions, when
40:01left unaddressed, follows the exact same
40:03structure.
40:06Emotion,
40:07pain of avoidant behavior, and outcome.
40:11And every single one of those emotions
40:14has a rule-based fix.
40:16That, my friend, is how you build a real
40:19trading system.
40:22And unlike what most of you guys think,
40:23a trading system doesn't just tell you
40:26when to enter and when to exit.
40:28It should tell you what to do when
40:30you're afraid,
40:32when you are greedy, when you're out for
40:34blood.
40:35It should completely remove you from the
40:38equation at the exact moments when
40:40you're the most dangerous to yourself.
40:44So, here's exactly what you're going to
40:45do starting today to close this
40:47execution gap. Okay? Once again, I'm
40:49going to give you actionable steps,
40:50okay? Step by step to implement
40:52everything that we have learned
40:54throughout these past 2 hours or so.
40:56Like I said,
40:57you guys got to do this And
40:59because when you do this, you change
41:00your behavior. You change your identity.
41:02And when you do that, you change your
41:03results.
41:04So, grab your notebook if you guys
41:06haven't done that.
41:07And I want you guys to write down
41:09physically on your notebook or whatever,
41:11notes or whatever, write down the one or
41:13two emotions that you recognize most in
41:15your own trading from everything that I
41:17just shared.
41:18Whether that's fear, greed, FOMO, hope,
41:21revenge, doubts, whatever it is,
41:24pick the ones that made you nod your
41:25head the most while I was talking about
41:27them. Pick the ones that you are
41:29struggling with the most.
41:31Those are yours.
41:32Write them down right now.
41:36Step two, introspect, okay?
41:38Important, nothing changes if nothing
41:41changes.
41:42Take the time out to introspect. Stop
41:43hiding behind the story you've been
41:45telling yourself about why you keep
41:46losing.
41:47Stop saying stupid like, "Oh my
41:49god, man, the broker stopped me out
41:50again. Oh my god, freaking institutions
41:53are hunting my stop loss. Oh my god,
41:56it's all that fake guru's fault." No,
41:58stop doing all that stuff.
42:00Start taking full responsibility over
42:01your trading right now. Start taking
42:03extreme ownership.
42:05Because when you do that, now you're
42:06taking back control of your trading and
42:08you're taking back control of your life.
42:10And instead, I want to ask yourself this
42:13question right here.
42:15What pain am I running from right now?
42:19What pain am I running from? Like I
42:21said, just now I've shared with you guys
42:22each emotion and what pain you are
42:23essentially avoiding.
42:25When a FOMO hits, you're not excited
42:27about an opportunity. You're terrified
42:30of being left alone.
42:32When you revenge trade, you're not being
42:34aggressive. You are refusing to accept
42:37that the market has just humiliated you.
42:40When greed takes over, you're not being
42:41ambitious.
42:43You're so scared of missing out that you
42:45are rather destroy your edge than walk
42:47away.
42:50And step three
42:51is to apply the solution. Because like I
42:53said earlier, for the past 2 hours I've
42:56literally listed down every single
42:58emotion. And all of this emotion has a
43:01specific rule attached to it, an
43:03actionable step. And that rule exists
43:06for one reason.
43:08To take the decision out of your hands
43:10at the exact moment when you are the
43:12most dangerous to yourself.
43:15And I want you guys to use it.
43:17Listen guys, whatever that I just shared
43:19right here, it's essentially mental
43:21masturbation if you don't actually do
43:23this, okay? It's essentially just you
43:26feeling motivated and inspired like a
43:28freaking junkie, but it's useless if you
43:31don't actually apply the fix.
43:34So, whatever
43:36that you actually face, right? Whatever
43:39emotion that it is, find the solution
43:41which I've went through, and I want you
43:43guys to apply it.
43:45Action. Awareness without action is just
43:48self-pity. So, see the emotion,
43:51name the pain, and then follow the rule.
43:53That's it. Every single time, no
43:55exceptions.
43:57That's how the patterns break. That's
44:00how you break out of the cycle of
44:03unprofitability. It won't be easy at
44:05first.
44:06And that's okay. Nothing worth building
44:08ever is.
44:09Okay? I know a lot of you guys are going
44:11through that that that phase right now
44:13where it's it's not easy. It sucks. It's
44:15going to suck for an extremely long
44:16time. I don't know exactly when it's
44:18going to stop sucking, but it's going to
44:20suck.
44:21And it's okay. Go through the suck.
44:23Embrace the suck.
44:26Here's what happens when you commit to
44:27the process and you keep showing up
44:28anyway.
44:30Every single rep you put in, every
44:32single time you catch the emotion and
44:34you follow the rule instead,
44:36you are literally rewiring your brain.
44:40I don't mean this metaphorically. I mean
44:42this literally.
44:45You are literally building new neural
44:48pathways that make the right decision
44:50feel more natural than the wrong one.
44:53Every single time you catch yourself
44:54feeling greedy and you're about to, you
44:56know, size up, you stop yourself. Boom.
44:59You are telling yourself that you're
45:00going to stop when this emotion arises
45:01again.
45:02Every single time you feel fear, you
45:04know, you're not sure whether you should
45:06actually enter for the trade or not,
45:08boom, you implement a solution. Now you
45:10are training your mind, your body, your
45:12soul to do the right action every single
45:15time that emotion actually arises.
45:18And the neurons that fire together wire
45:20together.
45:23Until one day something shift.
45:26The hesitation is gone. The revenge
45:28trades are gone. The FOMO is gone.
45:32Not because you fought it with willpower
45:34or useless, you know, spiritual woo-woo
45:37stuff, but because you replace it with
45:40something stronger.
45:42Awareness.
45:44Awareness.
45:47Now you can see the unconscious patterns
45:49you used to repeat automatically.
45:52And once you see the pattern, you can
45:54finally change the program.
45:58And just to be clear, the goal here is
46:00not to suppress your emotions like AI or
46:04a robot
46:06or a humanoid robot or whatever.
46:08In fact, the more you try to suppress
46:10them, the stronger they become. Because
46:13what you resist persists. The more you
46:15focus on the anger, the fear, the FOMO,
46:17the scarcity, the fear,
46:19the more they actually
46:21appear in your life and in trading.
46:24Listen, even the best traders in the
46:26entire world, including myself, feel
46:29fear, greed, and frustration.
46:32The difference is this.
46:34Professional traders have rules and
46:36systems that neutralize the emotion
46:39before it hijacks the decision.
46:41Remember what I said earlier, when
46:43you're emotional, the emotional part of
46:45the brain literally override the logical
46:47part of the brain.
46:49Which means that if you don't have a
46:50system,
46:51you are going to give in to your
46:52emotions.
46:53100% guaranteed.
46:56The goal here is not to eliminate
46:58emotion.
47:00In fact,
47:02this is life, man. You got to experience
47:05the full range of emotions. You got to
47:07feel the the joy, the despair,
47:10the the gratitude,
47:12you know, the suffering, the pain.
47:14That's what life is about. It's to feel
47:16the full range of emotions.
47:19And in trading, the goal is to build a
47:21system that protects you from it.
47:24Once again, not to get rid of the
47:25emotion and become like a psychopath,
47:28but build a system that protects you
47:30from the emotion to prevent it from
47:34prevent the emotion from taking control
47:35of you.
47:38Now, think of it this way.
47:41You can't stop wave from hitting the
47:43shore.
47:45But you can build a seawall.
47:47Rules, checklist, risk management,
47:50that's your seawall.
47:53And that seawall doesn't build itself.
47:56It gets built rep by rep, rule by rule,
47:59every single day.
48:02Which brings us back to what I told you
48:03at the very beginning.
48:06Once again, conviction comes from
48:09confidence.
48:10Confidence comes from competence, and
48:13competence comes from consistency.
48:18And consistency comes from systems.
48:22Not willpower.
48:24A mechanical system that makes the right
48:26decision automatic before the wrong one
48:29even have a chance to surface. So,
48:32hopefully after this lesson, you have
48:34learned that trading psychology is not
48:36just some soft topic on the side, right?
48:39It's not just a side quest. It is a huge
48:42part of whether you actually make money
48:44or not.
48:45The emotions, the fear, the doubts, the
48:47FOMO, the greed, the anger, the
48:49frustration,
48:50they will always be there in some form
48:53as long as you are alive.
48:55The question is not whether you feel
48:56them. The question is whether you let
48:58them control your execution.
49:02All right? At the end of the day,
49:03mastering your emotion does not means
49:05becoming numb to it. It simply means
49:08becoming aware enough to catch what
49:10you're feeling, understand where is it
49:13coming from, right? The pain that you're
49:14avoiding, and returning back to your
49:17trading rules before you do something
49:19stupid.
49:20To me, that's real emotional control.
49:23Right?
49:25Remember, the traders who win in the
49:26long term, they are not usually the ones
49:28with the best predictions. They are
49:31simply the ones who can stay the most
49:33stable under pressure.
49:35So, yes, work on your strategy, learn
49:37the market mechanics concepts,
49:40but also spend some time working on the
49:43person who has to execute the strategy
49:45when it matters the most.
49:48Spend more time on the inner work as you
49:49do on the chart work.
49:51Because if you cannot manage your inner
49:52state, the market will keep exposing it.
49:56So, with that being said, I hope you
49:57guys have enjoyed this long ass lecture.
50:00And
50:02happy learning.
50:03I'm looking forward to see you in the
50:04next lesson. And as always, remember,
50:06you're just one trade away.

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