Thursday, September 30, 2010

Transformational Trading Part II

Dr Van Tharp Trading Workshops
The Transformational Journey of a Super Trader Part 2

By Van K. Tharp and William D of the Van Tharp Institute of Trading Mastery

Click here for Dr Van Tharp Trading Workshop Schedule

The journey for people in my Super Trader program starts with an intense year of psychological work. I’m looking for major personal changes during that year. Typically, Super Traders attend Peak 101 (again), Peak 202 and Peak 203, which are amazing workshops and probably my favorites. After completing Peak 202, they take Libby Adams’ Transformational 28 Day Course. They also complete a six week follow-up exercise to Peak 203 and work through 15 Peak Performance Lessons. Each lesson can take two weeks or more to finish. As you can tell, this is intensive psychological preparation that I believe is required work to trade successfully.

One of my Super Traders took two months to explore himself deeply and blew me away with his answers to the ninth Peak Performance Lesson on self-sabotage. As a result, I wanted to share some of his responses just to show you what is possible. For professional reasons he wishes that his identity not be revealed, so he is using a pseudonym.

We all sabotage ourselves, whether consciously or unconsciously. Anyone who is tired of repeating the same patterns in their trading or their lives will benefit from the following exchange. To make the responses more readable, we modified them into a Question and Answer format. Because of the length of this article, we have split it in two parts. We ran Part 1 last week; this is Part 2. My comments are in bold.

Since resisting feelings was so core for you, how did you go about doing that?

For most of my life I wasn’t even aware of my feelings at all. So in a sense I was totally asleep. That is one way we resist our feelings.

Another way was denial: “I’m not feeling this.” When I would become conscious of certain emotions, I would simply deny that I was feeling them and go on as if they didn’t exist. This was particularly true for feelings of inadequacy and unworthiness.

I’d also avoid feelings by distracting myself with something else—even something as simple as moving a part of my body.

Even as I started becoming more aware of these feelings, I would try to get rid of them whenever I sensed them arising. From the time I began therapy until the time I started my core work, repression was the primary way I would deal with any sense of unworthiness or inadequacy that came up. While these feeling were no longer unconscious, I would simply try to suppress them whenever I noticed them appearing.

So finally beginning to allow myself to experience my emotions was a key turning point for me. But even after that I would often find myself getting all worked up because I noticed some unwanted feeling arising. “This feeling is bad,” I would think. While I was not repressing them anymore, I still was judging them.

Again, I would have this reaction to feelings of inadequacy or unworthiness, in particular, and frequently still do. A lot of the suffering I continue to experience comes predominantly from judging myself. Usually I find that when I’m feeling intensely inadequate, about 85% of that feeling is a sense of inadequacy about the fact that I’m feeling inadequate. “Shouldn’t I already be over this inadequacy stuff? Why am I still feeling this?” Once I feel through that reaction and just experience the underlying, primary feeling of inadequacy, it seems to make up a rather mild 15% of the intense feeling I started out with.

How about projection? That is part of the illusion that we all live in; we see it out there and lay it on other people. Did that come into play?

It certainly did. I would often take some feeling I had and project it onto the rest of the world. Projection actually took many forms. Sometimes it would follow from avoidance. To avoid a feeling, I would make up an imaginary drama involving someone else, such as having an argument in my head with the person, coupled with a strong emotional reaction to my image of them.

At other times, projection arose from an attempt to deny a part of my past, a part I would subsequently see in others around me and feel contempt for them for it.

Another major manifestation of projection for me has been co-dependency, a clinical term that refers to rescuing others at your own expense. To avoid feeling unworthy I would attempt to fix other people’s problems for them and thereby feel worthy again.

One of the methods I describe in Volume 4 of the Peak Performance Course is a feelings release exercise that you found useful. Can you please share a specific example of your experience and what you learned from it?

I went to a park near my house recently and did the “General Feeling Release” exercise you teach in Volume 4. I’d done this exercise before. When I first began the core work, I would use this method every day. I would pick a feeling off the shelf, bring it up so that I’d feel it intensely, and then just try to experience it fully. I found that although the exercise was effective in dissolving beliefs and feelings temporarily, I had to keep doing it on a regular basis. The beliefs and feelings did not disappear permanently—even after about six weeks of daily work. Nevertheless, I thought it worthwhile to try again because my resistance to my emotions had decreased significantly since I had first attempted the exercise.

That said, I still found myself experiencing resistance, so this is what I decided to work on that day in the park. It turned out to be an interesting exercise in resistance itself. When I sat down, I set the alarm on my phone to go off after 50 minutes so I wouldn’t have to keep looking at the time. I then brought up the feeling of wanting to resist my emotions and experienced it in all its aspects: in particular (1) my frustration with the fact that I was still experiencing emotions such as inadequacy on a regular basis despite all the work I had done, (2) the general sense of unpleasantness that comes with feeling negative emotions, and (3) the fear that if I go into interactions with people while feeling certain negative emotions, like inadequacy, I would put out a negative energy that would turn people off. The third belief was the most powerful.

Okay, so what happened?

After about 40 minutes all of these feelings just kind of dissipated. However, when my alarm went off I opened my eyes, stood up, and immediately felt a sense of fear around experiencing feelings of inadequacy during social interactions. The fear was directed toward a woman with whom I was to have a date the next day; I was afraid that if I went into the date feeling inadequate, she would sniff it out and reject me. (Note: I am now seeing her regularly. Just to underscore how groundless most of our anxieties are, she reports that what she initially found most attractive about me was my confidence.)

I walked around and felt this feeling for a while but it stayed with me. I eventually discovered that I was simply waiting for it to go away, which itself is a form of resistance. That very resistance, in turn, was preventing the feeling from going away in the first place.

Excellent observation. So what did you do?

I set the alarm on my phone to go off in another 20 minutes and resolved to use this time to just experience my fear of feeling my inadequacy. The act of setting my alarm and creating a designated period of time to feel the feeling helped to reduce the pressure I felt around making the feeling go away. In other words it (temporarily) extinguished my resistance. The effect was dramatic; after only two minutes my fear of feeling inadequate evaporated. The reason, I’m sure, was that I was no longer resisting the feeling.

But then the feeling came back. I immediately became frustrated with this. The frustration, of course, amounted to resistance. I knew that and began to feel even more frustrated at the fact that I was feeling frustrated. Needless to say, this cocktail of frustration and resistance made the underlying feeling—the fear of feeling inadequate—persist. So that is where I ended this part of the exercise. I learned that even when the process works, the feeling I’m working on may return. But the lesson here is to just be patient when that happens and experience the recurring feeling without resisting it.

Where are you with all of this now? How has it changed your life?

I have now spent a good two weeks going to the same spot and feeling through my inadequacy and unworthiness, devoting 45 minutes to an hour each time. (I have switched the spot from the park to a lookout point on the top of a mountain near my house.) While I haven’t been able to do the exercise every day, I have managed to do it every other day at least. Most of the time the feeling ends up dissolving towards the end of the hour and I feel extremely clear and confident. This feeling of clarity tends to last at least until the end of the day. The effect on my mood and especially my interactions with others has been dramatic.

Also, on recent occasions the feeling of inadequacy has become harder to “stir up,” proves less and less intense, and requires shorter and shorter spans of time before it dissolves. I take this to be a sign of improvement.

So I now have two separate exercises that I’m doing on a regular basis. The first method, which I have just described, is the one that you teach, Van. In this meditation you take a particular belief or feeling, go to a neutral spot outside of your house, and spend 40 minutes to an hour doing everything you can to stir up these emotions. Continue this exercise every day for a week or two, or until you start noticing real changes. Again, do everything you can to bring up the emotions—use thoughts, mental images, anything, and do not let up until the end of the hour. Also focus on accepting everything that you experience during the exercise; this point is very important.

I’ve found that this method is really helping to dissolve these core beliefs I’ve always had about myself. The effects have been dramatic and lasting. I’m clearer and more confident in general and my old feelings of inadequacy and unworthiness are coming up less frequently and less intensely.

The second meditation, which is closer to the one that Erwan Davon teaches, simply involves stopping your thoughts, bringing yourself back to the present, and letting yourself feel fully whatever emotions happen to be there. Whereas in the first exercise described above you are consciously trying to stir up certain feelings and are using anything you can to do that including your thoughts, this second method is different. Here you are not trying to stir anything up; you are just working on whatever is there to begin with. The goal is to get out of your head entirely—that is, to completely ignore whatever thoughts are there—and come back to the present. Being present means noticing your body, the sounds around you, and any sensations you are experiencing. Then look for any feelings that happen to be there—not thoughts, but feelings. A thought is in your head; a feeling is in your body and consists of physical sensations and sometimes images. Feel any emotions fully and accept them.

This second method involves combining presence and acceptance—getting out of your head and into your feelings and accepting whatever you are experiencing in that moment. You can designate, say, 20 minutes a day to sit down and really concentrate on this exercise. But I actually try to do this all the time now—while driving, interacting with people, etc. With practice I’ve become better at noticing and accepting my moment-to-moment feelings and often find that they simply flow through and out of me in a matter of minutes. I’ve also developed the ability I mentioned earlier to feel my emotions in my body without identifying with them in my thoughts. This is a very powerful skill.

Both practices have their time and place. Maybe you’ve spent two weeks using the first method on a particular belief or feeling and found that even though the feeling is less intense and frequent it still comes up. When it does, you can use the second method to let the feeling simply roll through you without letting it permeate your thoughts and affect your actions.

Remember that the key to both methods is acceptance: whatever you are feeling—accept it. Whatever your reaction is to what you are feeling, accept that as well. If you are having trouble doing the exercises and find yourself getting distracted or lost in your thoughts, accept that too and just bring yourself back to the present. Acceptance is a skill just like any other. As such it requires patience, practice, and persistence.

How do you think all of this work relates to your trading?

Recently there have been times when I’ve felt a sense of fear and pessimism about being profitable as a trader. This belief is irrational given that I’ve been profitable in the past. However, a couple of recent attempts at paper-trading some new strategies did not prove successful; it was then that I developed this belief.

So I did some work on releasing these feelings. But despite my best efforts, I struggled to bring them up. My attempts to feel the fear and pessimism gave way to a sense of determination to learn from my mistakes and correct them, which is, of course, a healthy mental state. The parallels with my past were not lost on me; my usual (unconscious) strategy for motivating myself has always been to derive strong determination from a fear of failure (negative motivation as opposed to positive motivation). In any event, by the end of the hour I no longer felt any pessimism or fear over my prospects as a trader.

Some readers may be thinking, “This sounds painful and boring and there is no way I’m going to spend hours feeling negative feelings.” And, of course, that’s the resistance that keeps those negative feelings in place and brings them up unconsciously all the time.

To me, this is like saying “I refuse to brush my teeth.” To begin with, if I do not devote any time to consciously experiencing my negative emotions, I will have problems. Furthermore, engaging my emotions has become a normal part of my routine. I really do see it as akin to brushing my teeth. Anyone can do it and you don’t have to spend hours and hours lying on the floor like I did. I took the hard route and figured out a lot of the mechanics on my own. But in doing so I hope I have made things a little more efficient for those who are reading this. Taking 45 minutes every day for a few weeks to go to a park and work on some particular feeling will probably yield enormous benefits. If you absolutely need to, skip the gym for a week or two and do this instead. These practices have done more for my physical health than exercise and medication. If you don’t have time to go to the park, then there is nothing stopping you from using the second meditation I described above—that is, taking a few minutes during your day to bring yourself back to the present moment, feel your feelings, and accept them.

You can try to avoid your emotions. But that won’t make them go away. They will continue to affect the results you get in life even if this happens entirely unconsciously. So you may as well just learn to accept them. That way you will be able to manage your emotions instead of them managing you.

So what has this process meant to you and why is it important? More significantly, when you finish all your psychological work and move on to full time trading, what do you think will be the impact?

As many readers can attest, few activities bring out your emotions like trading and investing. You can have a great system, but if you make emotionally-driven mistakes while trading it, as most people do, you won’t come close to achieving its potential results. Because I’ve done all of this psychological work, I am now able to feel my emotions without being affected by them. I do not doubt that this ability will be critical once I return to active trading. People always talk about the need to have an edge in the markets. Well, this is my edge.

Far more important than any effect on my trading has been the impact this practice has had on my state of mind and my life. Being able to experience my emotions without being beholden to them has fundamentally altered the way I walk in the world. Moreover, the feeling of clarity I can attain after doing this work is unparalleled and indescribable. It is like having a completely clear picture of the world before you, one that is unobstructed by all of the false conceptions that usually muddy that view.

The state of clarity, alas, tends to be elusive; sometimes it happens and sometimes it doesn’t. Regardless, my everyday existence is entirely different than it used to be. Until recently I lived mostly in my thoughts while ignoring, denying, and repressing my feelings. But now, for the first time, I am experiencing reality. Sometimes it is placid and beautiful, other times it is raw and intense. But it is pretty incredible out here.

Click here to learn more about the Market Wizard and Traders Coach Dr Van Tharp at the Van Tharp Institute of Trading Mastery