Childhood emotional traumas, wounds, and scars create the crux of your mental models of the world.  How you see the world is influenced by the way you bonded with your parents/family in the first 3 to 5 years of life.  A secure bond or attachment means that you experienced a nurturing upbringing, complete with plenty of affection and limits, as well as room to explore.  A secure attachment is one of two main constructs that form the foundation of your mental model of the world.  The remaining types of attachments all fall under the “insecure” type and indicate that your caregivers/parents/family were erratic, inconsistent, withheld love and may have even been abusive.  These two bonding strategies are formed by your earliest relationships.  If those relationships were good, your outlook for life would be mostly positive; if those relationships were painful, then your outlook is likely more negative.  These mental models from early childhood continue to play out over and over again, triggered by associations and reminders of the past or by strong emotions such as anxiety and fear that activate internal states.

When you begin to participate in the market trading time machines can happen at any moment when the relationship with the market goes sour and these time machines can activate feelings of envy, jealousy, betrayal, abandonment, anger, guilt, desperation and depression, to name a few.  At these times, the trader is caught in a time warp where old image tapes begin to play and the trader is seemingly held in the clutches of those old recordings.  To get out of the abyss brought on by these states, the resources of the right brain—where these emotions are lodged and largely held unexpressed to the conscious mind—must be flushed out and purged by shedding light on these dark spaces through mental and emotional tools.  Trading becomes a mirror for life’s relationships.  When money is at stake through immediate pleasure-pain dichotomies of trading, old negative strategies are activated.  State bound negative strategies formed out of old traumas create patterns of coping that work against the trader.  These negative strategies are patterns of thinking and doing that emerge from learned limitations and belief systems.  In order to override these patterns, they must first be interrupted, and the distortions created by the original beliefs must be shown to be the illusions that they are.

When psychological trauma takes place, the system mobilizes to defend against both the event recurring and the thoughts and emotions associated with it.  It’s an attempt to defend against fear, depression, and emotional pain.  Maladaptive coping strategies are designed by the unconscious to help, but this ends up causing immobility, overcompensation and a mixed bag of negative emotions.  In fact, it can get quite complex.  For example, not only can there be fear, but the system can develop fear of the fear.  This fear of the fear can be illustrated by the way “triggers” work.  Triggers are cues in our internal or external environment that trigger a response.  If you had an abusive father who yelled at you and said you were incompetent and would never amount to anything, you might be surprised how these old tapes can affect the trade.  In the heat of a trade, if the price action goes against you significantly, your subconscious might replay those old tapes about being incompetent, prompting a severe anxiety reaction accompanied by the dread and fear of taking risk.  Later, in another similar trade, you may remember the anxiety, fear and self-loathing you felt before and, by just considering the same type of trade, you may experience a fear of having those feelings again.  When you “split” from your calm, normal, focused self to an anxious or agitated state brought on by these tapes, it can cause impulsive and compulsive behavior (rule violations), which are methods used to defend against the emotions elicited by the triggers.

When you get caught in these emotional time machines you’ve got to embrace the anxiety, greed, fear, anger, frustration, guilt, shame, or procrastination.  At this point you can use mental and emotional tools like for example Stop, Challenge and Choose to examine the unconscious faulty beliefs that are motivating the erratic feelings that in turn drive bad behaviors creating results you don’t want.  This is a great opportunity to also use your thought journal and bring yourself closer to awareness of the story that’s on those tapes.  Within those emotions lie the treasures of your growth.  You can’t change what you can’t face.

After using your thought journal to explore what happened in your unconscious thinking and emotions that drove you to break your rules, you can then establish new behavioral strategies to trigger and reframe old mental models that were the cause of the issues.  You can do this by another technique called “reframing,” which is a powerful tool that creates a turnaround for an ineffective mental model.  For instance, you can “reframe” the meaning of failure.  If you change the meaning of a concept that is driving your thoughts, emotions and beliefs you will also change your behavior.  A failure does not mean that you’re incompetent.  Everyone fails.  Rather, it means that you’ve had another opportunity to learn.  Failure is only feedback.  Most successful traders will tell you that they lost many times and blew up several accounts before they acquired the knowledge, experience, and set of effective habits that took them to success.  Through reframing you can get a new set of lenses with which to “see” the issues.  New lenses are ground out through identifying and challenging the mythology of your old mental models and creating new ones; but, you can only do that if you’re willing to do the exploration work by having and using a thought journal to uncover your limited beliefs and faulty thinking.

Mardi Horowitz, a trauma researcher, wrote about what he calls mastery.  He wrote about the importance of “working through” the issue when difficult emotions arise.  This process of “working through” is what we have been discussing.  It involves confronting, increasing awareness, reframing, and establishing behavioral strategies.  Or, you can continue to do what you have been doing and get the same results you have been getting.   Another tool that is quite helpful when you have uncovered an unconscious limiting belief that is driving unwanted results is to use positive self-talk.  Donald Michenbaum’s language of healing works well as a way to positively self-talk when dealing with impulsivity and compulsivity.  It is designed to help you “write yourself a new narrative for effective trading results.”  Positive self-talk is initiating the coach within.  Aside from helping to maintain focus, it also engages the parasympathetic nervous system (which calms and relaxes the body) and redirects attention from the distractions of negative and counterproductive thinking and emotions to those that empower and support goal oriented decisions.  You’ll want to construct affirmative statements on your ability to cope and to demonstrate resilience and courage in the face of trades that have gone against you.  Here are some examples:

• You demonstrate the ability to reframe events from failures to lessons.
• You are able to see your trade and strategy through a new set of lenses.
• You resist the temptation of feeling fear, greed, self-repudiation, self-loathing, and self-hate, anger and wishful thinking that distract you from your plan and strategy.
• You author your plan and keep your rules.
• You demonstrate the ability to maintain proactive and effective routines.
• You make choices based upon reality.
• You realize that you have boundless opportunities to trade.
• You decide to develop a more comfortable relationship with yourself.
• You create and maintain a strong purpose and mission for your trading business.
• You leave behind those things that should be left behind.
• You take initiative to continue to update and follow your rules.
• You take back your power when you feel an urge to violate your rules.
• You get rid of the excess baggage of ineffective programs.
• You liberate your trading from the lack and limited thinking.
• You notice a calmer more patient you
• You catch yourself entering and exiting your trade exactly according to your pre-targeted plan.
• You realized many of your strengths, powers and capacities by keeping your commitment to your rules.
• You develop a winning strategy.
• You recognize that the most important point is not whether or not you made a profit, but whether you kept your rules.

Once you have identified the affirmative statements you can then use self-hypnosis to implant suggestions that are focused on one or two of the positive statements at a time.  This is a very effective and powerful process to engage the subconscious to begin to work for you rather than against you.