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How to control fear and greed in trading?

Markets much like life, are an ever moving tide of highs and lows, all manifesting through the constant expression of the human emotions of fear and greed.
A consistent practice of meditation will help you eliminate fear and greed from your trading.

Table of Contents

Fear and greed move the market

The fear and greed constant

We can attach any amount of fundamentals to market directionality, but on the edge of these fundamentals are just these basic human emotions that are guiding everything.

To be honest, it really does not matter what market we are trading or how many participants are trading it.

It is these same emotions that are the key component in creating these extreme highs and lows.

We can see these emotions on a chart on every timeframe.

Indeed, if you look at a 1 minute chart you will see the same extreme highs and lows and the illustration below you can see the same on a Weekly chart of Bitcoin.

Weekly bitcoin chart with fear and greed identified
Weekly bitcoin chart with fear and greed identified

Be “Aware” of your Fear and Greed to take advantage of it.

Our job as a successful trader is to be able to recognize these emotions within the market participants and also within us.

So we can use this information to our advantage rather than fall prey to the forces of the market.

This game of trading is more of a psychological game with yourself rather than about anything else.

It is the objective of the market to keep you emotional so that you make your decision using your emotions and not your logic.

To truly be objective, one has to keep their emotions aside.

This enables an unbiased decision making process which is absolutely essential.

Only this enables an unbiased decision making process which is absolutely essential; and a key tool to possess when one is wanting to be a consistent and successful trader.

Then, what would it take to become a consistently profitable trader?

A consistently profitable trading system requires this balance and an optimal state of being.

In this blog we will show you how you can attain this optimal state.

One can only observe something when one is outside of it.

If a trader is caught up in these emotions of fear and greed,  just like the majority of the market, he will always be swayed by these emotions to make illogical decisions which can result in great losses. 

Jesse Lauriston Livermore quote about greed and fear in the financial markets - July 26, 1877 – November 28, 1940
Jesse Lauriston Livermore quote about greed and fear in the financial markets - July 26, 1877 – November 28, 1940

The real cost of fear and greed.

The emotion of greed forces one to buy when the price is very high. And the emotion of fear would force a trader to sell when the price is close to the bottom.

Indeed, thoughts of fear or greed interfere with the cognitive processes needed to implement a strategy. 

Participants stop acting rationally, break their trading plan and start being driven only by their emotions: irrationality takes full control of their mind.

As a consequence, making such mistakes not only costs you financial capital but also a lot of emotional capital.

Emotions of greed and fear drain your energy. 

Your own self image begins to decline and many traders begin to live in the past constantly dwelling on the mistakes they made. 

As a result, you are not able to catch the opportunities in the present. This can slowly lead one to a downward spiral, not only making you lose a lot of money but you will also lose all hope of being successful in life.

So how is it that we can avoid such a tragedy and actually protect ourselves and our self image so we as traders can perform well in the Markets?

“How to” take advantage of your fear and greed

You have to step outside your emotions

To be “outside” of these emotions, so that our trades are not affected by them one would then need the ability to be mentally balanced and aware.

You have to observe your emotions and be aware when you are acting on them. Once it’s done, emotions no longer define you, you observe them and take control of them. 

Let me tell you the story of the fish in the sea.

Fish are not aware that water actually exists.

All they have experienced all their life is this medium through which they move. A fish pays literally no attention to it as it has always been there.

What would it take for a fish to actually understand that it lives in this thing called water? Well the fish would need to be taken out of the water.

Until then water for them is just a myth.

In the same way, for a trader to become aware of his own emotions and the emotions of the market, a trader must come out of these emotions first.

Un poisson sautant d'un bocal à un autre, réalisant que l'eau existe.

The best traders have no ego

What is the ego?

In the West, “ego” means the:

  • quality of a boorish person who muscles his way around without much regard to others.
  • attribute of a person who has a HUGE ego.

On the other side, in the East, it is a very different thing.

Ego means “I.” 

It refers to the named “self”. it’s the self of “self-consciousness”, of “self-recognition.

So your ego is you, your conditioned identity. 

How the ego is defining who you are.

It’s true that we are conditioned to think and to be attached to our identity.

What then happens is our own thoughts make this identity stronger everyday we look at ourselves and think to ourselves when we look into the mirror, that this is who we are.

We are a boy or a girl. This is our name, our likes and dislikes, our family, our friends, our country and so on.

Actually, we give ourselves this strong, strong, strong identity.

All these concepts that we become attached to, then govern us and our thoughts. They are the primary cause that springs up different emotions in us.

We are happy when we experience things we “like” and we become sad when we experience things we “dislike”.

This is in reality a prison that we create for ourselves. Yes, a prison.

As now we become prisoners to our thoughts, we are then spending our lives constantly chasing things we like and running away from things we dislike.

This constant battle of duality is what real suffering is. 

This imprisonment is not really our own doing: we are subject to so much social conditioning, it is more like we succumb to what is around us.

Parents, schools, workplaces, all these spaces slowly condition us into what we really need to break out of.

Kill your ego or it will kill your trading account!

So how does the ego affect you when you are in the market?

Well, your society has conditioned you to love money and profits.

So you become emotionally attached to making a winning trade, and begin to hate when you make a loss.

As soon as your emotions are invested in the market you are already just like the rest of the crowd.

The market can then use you just like the others and your emotions of fear and greed, of liking winning and hating losing will blind you.

You will just become another fish in the sea who does not know what is water.

That’s the reason  you need to kill the ego.

Money makes you a slave.

Stop stressing about the money. 

Start thinking about trading as the flawless execution of your trading system. 

Money is not the goal. It is the mean. Focus on the perfect execution of your trades.

Think differently. 

In order to speed up this process, use meditation.

Meditation to eliminate greed and Fear

Start your disidentification

A yogi is not sitting peaceful and happy and content without any material gains for nothing.

All he has done is worked on removing all these labels, that are put on us by our society. Of who or what we really are.

If we start to remove more and more labels, we start to have less likes and less dislikes.

Slowly, this process enables us to choose how we want to feel as it is no longer our circumstances or our mind that will hold that power over us.

We would then become like the fish that is outside of the water.

Watching our emotions objectively.

This would become like a movie that we are simply watching and not a movie in which we are acting as the lead role.

We are seeing things through our filter of attachments and conditioning and bias.

Just like in our dreams, we experience only things that we have been exposed to and understand.

In our waking state, all this understanding and conditioning creates this filter which only allows us to understand and pay more attention to what we know, and to actually ignore the details.

We need to dis-identify with ourselves so we can remove this filter. This ability to observe reality as objectively as possible is a real edge in life.

To be honest, it is the true secret to happiness.

Oh and, it is the ultimate and the optimal state of being, which once achieved can bring about success and happiness not only to you but also to those around you.

Meditation is the real tool that can enable this optimal state of being.

Terence Kemp McKenna (November 16, 1946 – April 3, 2000) quote about nature that loves courage and to make the commitment
Terence Kemp McKenna (November 16, 1946 – April 3, 2000) was an American ethnobotanist.
Terence Kemp McKENNA was an American ethnobotanist (November 16, 1946 – April 3, 2000). He formulated a concept about the nature of time based on fractal patterns.

Meditation to trade in the now

Meditation is an edge for your life and your trading

This is the real edge that once you possess there is no turning back.

They say nothing easy is really worth having.

Well, this is true in every walk of life. Nobody got successful by just being lazy.

You will have to challenge yourself and challenge your habits and beliefs. Only then you can reinvent yourself.

If you have to be different from the crowd and you have to set yourself apart, then this is the expectation that you have to have for yourself.

Meditation is the practice of silencing the constant chatter of the mind. 

It will help you develop a stronger understanding of yourself but also help you grow into your best self.

It is giving us:

  • the power to constantly be objective.
  • the stillness through which we can truly observe.

Oh, and please guys, tell me what does it require to be a successful trader ?
Yes, to be objective. 

Why do many traders fail ? Because they are not able to see and listen to the signals of the market.

They just distort the reality of the market, to match their thoughts, their own reality…

To say it in an other way, they see the market as “their idea” of the “way the market should be.” 

But the market does not work like that. And they lose. Everything, including their mind…

However, we can control our perception and interpretation of market information, as well as our own behavior.

Meditation to see “The” reality, not “Your” reality

It sounds very simple or maybe weird, but we are so used to be constantly thinking, what we are trying to do is to break a habit that we have formed from a very early age in life. 

Well, you can only see what your conditioning let you see. The remaining part is invisible to you because you have not learned to see it yet.

That’s how your thoughts create “your” reality and distorts the reality to “only” match the content of your conditioned mind. 

So, yes life is all an illusion… Like a movie and we are the director of that movie…

Life is an extrapolation of our consciousness that creates our reality.

As we master the movie, so we also create it.

As it is our creation, so we can dismantle it and recreate at will.

And… as a movie director can change the effect his movie has on his audience by playing with sound, speed, angle, volume, movement, you can start changing the effect an experience has on yourself by simply changing your thoughts or quieting your mind.

And with the edge of meditation, you are able to see things as they truly are.
Not as your ego makes you see them.

You can start direct your thoughts in the same way to generate any state or behavior that support your goal.

Meditation to silence the mind and to serve your goal

Meditation enhances awareness.

It will help you recognize thoughts that may be harmful or self-defeating.

Gaining a greater awareness of your thought habits makes you able to steer them toward more constructive patterns.

If you are not convinced, check scientist proofs.

Meditation is proven to:

  • affect positively the brain structure,
  • regulate blood pressure and the heart,
  • slow rate of cellular aging,
  • stimulate the immune system,
  • increase gyrification which allows the brain to process information faster,
  • improve focus by stimulating regions of brain responsible of attention,
  • regulate the mood by boosting dopamine and serotonine,
  • reduce stress by downregulating pulse rate, blood pressure, and metabolism.

Actually, the fish in the sea story tells us we really cannot be aware of our emotions unless we are able to step outside of them.

Biologically, meditation is enabling one to have what we call a peak experience.

How the neural network of our mind works is that when we have a certain thought more than a few times it becomes a habit.

So the same set of neurons fire at the same time again and again.

If we compare that to a well developed city, a road on which many cars travel again and again becomes a highway.

Once we have highways, cars prefer to take that route as its more efficient and faster.

It’s the same with the neural network of our mind. Repetitive thoughts become habits which are like superhighways.

For a city to break a highway to build something else is an extraordinarily difficult task.

So it’s the same for us and our minds as well.

It is why many many people find it so difficult to break habits even though they don’t resonate with them anymore.

This is where meditation and the peak experience comes in.

The effects of meditation on the brain subverto
The effects of meditation on the brain

Recondition yourself with peak experiences

 A peak experience is where a very large number of neurons of the brain all fire together. 

It’s a lightbulb moment.

Well, a lightbulb moment is a “breakthrough in thinking”, a sudden moment of clarity, a new idea or a sudden realization.

Peak experiences inspire a person.

Under normal circumstances we have these experiences only in very extreme conditions:  A near death experience, a very sudden shock, certain psychedelic drugs can enable the same. (Though that is really not recommended as if we induce it artificially it can create a lot of conditions of mental and spiritual instability.)

A strong meditation practice opens the doors to enabling us to have this peak experience at will.

How this helps is that it allows us to reform our neural links and recondition ourselves to build a new identity.

As a majority of the neurons are firing together rather than our regular conditioned highways, a repetition of this slowly breaks the highways and opens up the space to actually build new connections.

This is what the process of realization through meditation is actually doing to your mind and its neural framework

On the left is a picture of london at night and on the right is a picture of the brains neural network. Look at how striking this similarity is.
On the left is a picture of london at night and on the right is a picture of the brains neural network. Look at how striking this similarity is.


To sum-up, we will teach you how the edge of meditation will level you up as a trader by reconditioning yourself.

It will help you avoid falling for fear and greed in your trading.

Practicing meditation will allow you to create a new version of yourself, a complete new way of thinking.

It requires time and hard work.

Stay tuned for more information on how to begin this wonderful and fullfiling journey.

We are Subverto Trading Club, a group of professional traders from around the globe who were drawn together under a common objective: To seek out students who are determined to empower themselves with the skills needed to be successful in trading. Whether you want to supplement your primary career or make your way as a professional trader, we have the tools and expertise to show you the way.

Come check out our discord with a free 3-day trial: ask questions, peruse chat history, and observe us at work. We look forward to seeing you there! 🚀

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