Slip Slidin’ Away – Certainty in Trading

There’s an old Paul Simon song with this refrain:

Slip slidin’ away

Slip slidin’ away

You know the nearer your destination

The more you’re slip slidin’ away

Traders want to believe with every ounce of their being that they are making progress toward the destination of consistently profitable trading that earns them a living. They want to see a rise in their equity curve and believe they are doing everything humanly possible to make that happen. They have invested time, energy, and capital in the pursuit of that goal. And like the vast number of aspiring traders before them, they keep coming up short. They are certain it is there, almost within their grasp. They can feel it, even taste it, but the victory eludes them.

As they get close to the coveted destination of sustainable profitability – and having all their hard work pay off – they keep “slip slidin’ away”. The goal seems so do-able to their rational mind, but it stays slightly out of reach. It seems so close that they feel certain of eventual victory. So they just try even harder. But no matter how hard they try, the goal keeps being right around the corner. If you trade, you most likely know this feeling. It defies logical problem solving.

The Brain Is Playing Tricks on Your Logical Mind

The problem is the feeling of certainty. You are certain that what you are doing is right and you should be experiencing a breakthrough in your trading. But the Trading Gods are not cooperating with your calculus. You stay anchored in the feeling of certainty (and the conviction of BEING right) even though all the evidence indicates that you are stuck – or worse. “Just keep pushing and you will make it happen.” But it doesn’t happen. After a number of years, this impasse wears on the soul. It doesn’t make sense, does it?

The brain prefers the feeling of certainty, even when a ton of evidence doesn’t support the feeling. The one thing the brain doesn’t want is confusion – which is what would happen if you acknowledged that the feeling of certainty was leading you off the side of a financial cliff. So the feeling of certainty (an emotion) hijacks the tool of logic and you find that you can’t declare a breakdown, acknowledge the confusion in the face of Uncertainty, and rationally begin problem solving.

No, that is not what happens. Instead, the emotional brain (that really wants to stay with the feeling of certainty even without evidence to support it) hijacks the thinking brain and enslaves logic to serve the deception. All of a sudden, thinking produces all sorts of reasons that explain the situation away. And the trader goes off looking again, and again, and again for the Holy Grail “out there”. The comfort zone of feeling certain that the solution to the problem is just right around the corner is re-established. The brain loves that feeling and will not surrender it easily.

Traders stay stuck in this biologically and psychologically induced deception for as long as the feeling of certainty can be maintained. In his book, On Being Certain – Believing You Are Right Even When You Are Wrong, the neurologist Robert Burton describes the neuro-biology of this glitch in the way the survival brain generates the mind. It is particularly revealing for traders who are engaging uncertainty of the unknown on a regular basis. The professionals have learned to work from the feeling of uncertainty rather than blindly following the brain’s mandate to maintain a feeling of certainty in the face of not knowing the outcome.

But Why?

It is this need for certainty, built into the very fabric of the brain by evolutionary adaptation, from which the trader has to break free. Traders fall into the myth that rational thinking will save the day. It won’t. Rational thinking serves the Emotions of survival. The feeling of certainty trumps the feeling of being rational every time, and rational thinking starts serving the need to be right (the feeling of certainty). This is where most traders get stuck, and stay. Why? Because they are certain that what they are doing is right (despite evidence to the contrary) and success must be just around the corner.

So, if you notice that you’ve been stuck for a while in your trading, but you continue to do the same things over and over again, expecting different results – recognize that you are in the clutches of the brain’s bias to lock in on the feeling of certainty. No matter how reassuring the feeling of certainty is – it is a lie in the context of trading. Look toward your trading account to sober you up. Then look within the Self for the answers.

What is sought for success in trading is the conversion of a brain that is organized around the need for certainty and being right to a brain/mind that embraces Uncertainty, Risk, and Probability as a new norm. The gap between performance and outcome will make more sense then. And you will become a far smarter (and more humble) trader in the process.

As you might imagine, the skills to learn this new way of perceiving and acting in the markets is exactly what are taught in the Individual (Ignite Your Spark), Group (Developing Traders State of Mind), and Self-Study Courses we offer. Bridge that gap between where your knowledge and performance need to come together. There is nothing wrong with the mind that you brought to trading. It is just not built to manage Probability effectively. But it can be learned.

To learn more from Rande, be sure to check out some of his other articles at TradersStateofMind.com.

This website is for educational purposes only. Futures, options, and spot currency trading have large potential risk and traders should be well-educated before putting real money at risk. You must be aware of the risks and willing to accept them in order to invest in all markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to buy/sell a futures contract or currency.