2/1/2026 - In the two posts below, we took a look at how painful consequences open us to new modes of thought, feeling, and action--particularly when those consequences are processed in relationships that provide the new perspectives.  There is, however, another mode in which emotion catalyzes lasting life change:  powerful positive emotional experience, often captured in inspiration, can take us in entirely new directions.  This experience enables us to see ourselves and our lives in a fresh way reorganizing our priorities.  

When Margie and I took our first trip to Israel, literally walking the paths of religious history, the impact was so profound that I immediately returned to a more spiritual, religious life.  I've worked with traders who have been so inspired by the mentors they've worked with that they radically reshaped their approaches to markets.

A narrow focus on P/L and catching moves in markets not only exposes us to negative emotion (as we know well from greed, fear/FOMO, overtrading, etc.), but more crucially it keeps us from any experience of inspiration.  Eye-opening novelty and perspective is what can amaze us and lead us to reorganize our trading.  If we lack amazement, we cannot tap into inspiration.  The narrowness of our perspective prevents us from broadening our horizons.  

This leads to questions rarely asked:  What am I doing today and this week (month, year) that is wholly new, interesting, exciting, and potentially inspiring?  Is it a mentor we tap into or a new perspective on our markets and trading?  Is it an insight into a particularly successful trade?  What in my trading is giving me energy and renewal?  

We make great changes by greatly changing our experiences.

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1/31/2026 - Emotional arousal and awareness of the consequences of our actions often is the spark for personal change (see below).  By itself, however, it is not enough.  It is during that emotional awareness that we can become exposed to new thoughts, new ideas, new ways of doing things.  Take the example of the alcoholic who goes to AA.  Pain over the consequences of drinking brings the person to AA, but it is at AA that new experiences of community and new understandings of the need to replace alcohol with support--including the support of a "higher power"--take root.  The group experiences provide a new way of handling life's challenges.

So it is with trading.  We make the same mistakes over and over again until the pain (and the financial losses) become too great to bear.  One of the most interesting aspects of the Market Wizards interviews was how common it was for very successful traders to go through harrowing losses early in their careers.  (Paul Tudor Jones is a great example).  The pain of that experience completely opened the Wizards up to a new set of priorities regarding risk management and the need to trade in planned and not reactive ways.

We change by completely reorganizing what we do and how we do it, because the pain of what we went through is something we never want to repeat.  That happens in relationships; it happens with drugs and alcohol; it happens in markets.  We don't change because we want to.  We change because we have to.

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1/29/2026 - The integrative perspective in psychology is that the various approaches to change, such as cognitive therapy and psychoanalysis, are different ways of tapping into a common change process.  Research tells us that, by directly tapping into this process, we can accelerate change and make our change efforts more effective.  In these posts, I will highlight what we need to do to make meaningful changes, whether it's in our personal lives or in our trading.

The first element in the change process is emotional arousal.  We cannot sustain change if we stay in our usual states of mind and body.  It is when we are experiencing our lives most deeply and powerfully that we're open to the deepest and most powerful changes.  Very often, the emotional catalyst for change is emotional pain.  We have repeated a problem pattern so often and to such an extent that we feel despair.  We feel that we can't go on this way.  In AA, this is known as "hitting bottom".  Our pain becomes our greatest motivator to do things differently.

Sometimes there is a positive source of the emotional arousal.  We have such a powerful experience that it completely changes our perspective and our priorities.  Examples of this would be falling in love and committing to a life together; deep religious experiences; and unusual success in one of our pursuits.  Change occurs through inspiration:  by shaking up our priorities.

In both cases, emotion is a gateway to change.  The enemy of change is routine--and routine states of mind.  A simple example would be trading reviews at the end of a day, week, or month that are conducted quickly and in a rote fashion.  We write down some goals and observations and move on to other life activities.  There is nothing in the process that moves us.  It's not the lack of work or effort that prevents traders from succeeding; it's the absence of emotional arousal.  We either have to be so disgusted with our bad trading or so inspired by our successes that change becomes a must, not something to check on a list.

If we're not passionate about change, nothing ultimately changes.

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