252: Yvan Byeajee - From Emotional Turbulence to Trading with Composure
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Markets, speculation, and risk. This is the Chat with Traders podcast. This is episode 252, and I'm Tessa, co-host of Chat with Traders. If it's a statistical fact that most traders fail at trading and that trading psychology is a very big part of trading successfully, why don't we pay more attention to this aspect of trading?

But even if we understood why we get in our own way in trading, would we even do what it takes to get out of our own way? Or do we continue to hang on to what doesn't work out of mindlessness, habit, comfort, and ignore the need to do the uncomfortable and real work that requires patience and practice?

Perhaps we ignore doing the deep work because instant results are more appealing. Or if we do do the deep work, we would have to face our demons. Today, Ian and I present to you a very special guest. His name is Ivan Bayegy.

Growing up poor with learning difficulties, Ivan's early trading failures drove him to understand his own emotional turbulence and instability in the mind through deep inner work. With a heightened sense of mindfulness, he embraced uncertainty and became systematic in his trading that contributed to his edge.

Yvonne discovered trading in the 90s and has been trading for a living since 2006. He struggled and failed his way to achieving consistency and market success over time. He's the man responsible for the creation of Trading Composure, where he generously shares with traders all over the world his knowledge, experiences, and wisdom of the inner game of trading. Ladies and gentlemen, coming to you all the way from Montreal, Canada, we present...

Yvonne Bayegy. So diving into the world of financial investments and trading, if you could take us back to when you were younger, how old were you when you first got into the stock market? So first of all, despite my youthful looks, and I'm a seasoned trader with

20 plus years of experience in financial markets. And I don't have a glorious background pre-trading. You know, I was raised by a single mother and, you know, we were very poor. She had four of us at the time and didn't work. So we lived on welfare, food stamps and all of that. Since I didn't do well at school because of a learning difficulty, I didn't amount to much professionally speaking. So I took classes.

odd jobs here and there. I also spoke with a stutter. I still do, by the way. But now with a lot of self-work, I'm able to manage it much better. But yeah, that's my background pre-trading. What got me interested in trading was basically as a teenager, one day I was hanging out in my high school's library during recess. We're talking about the year...

1998, 97. Sorry if I'm a little bit fuzzy about the year. It's been a long time. That's when I discovered the book, How I Made $2 Million in the Stock Market by Nicholas Darvis. And I took the book, brought it home, studied it little by little each night while listening to Guns N' Roses on my Walkman. Good old days.

And look, slowly I became fascinated by the man, by Darvish and what he had achieved in the market. I didn't fully understand what financial markets were back then, but I was just so inspired and fascinated by how one could earn a living taking calculated risks like that. And so that's my initial experience in the market. I was probably 16, 17 years old.

Did you consider yourself a risk taking type of person? Did you have any other hobbies or interests that showed your kind of risk taking attitude?

Interesting. I've never been asked this question before. I would say yes. I've always had, I've always been a risk taker at my core. When I look at my life, you know, the things that I've did, you know, the kind of sports that I did, for instance, I was, you know, I was into running back then. And, you know, you know, I like just a very active person. I've always had this inclination towards risk, towards taking risks.

And that's what got me so fascinated by this endeavor from an early age, you know, and growing up, you know, I don't come from money to begin with. Growing up, you know, in this lack of financial stability, I was just mesmerized by this idea of taking calculated risks and then seeing whether it works or not. When was the first time you opened up your brokerage account and bought your first stock?

Right. So I began studying trading and the market, as I said, you know, in 1997, 98. I jumped full time into trading actually in 2006. So this is when I opened my first trading account. And it was with a firm called Options Express. Back then, I think they closed door now.

Long story short, Ian, I wasn't successful as a trader right from the get-go. It was a very difficult journey for me. Lots of ups and downs. And I struggled like that for many, many years. But those were very formative years for me, I would say. And in hindsight, if I could go back, I wouldn't change anything because those experiences made me the person that I am today.

What drove you to study the psychological aspects of trading?

Long story short, my failures in trading led me to explore that area of trading. And so this led me to quite an interesting monastic sort of journey. I lived in Buddhist monasteries and meditation retreats for a few months, learning about meditation and the art of introspection. And all of that kind of kick-started my fascination with trading psychology.

And so, you know, thanks to the consistent work I've been able to do on myself, I was able to to vanquish most of my demons or befriend them. I mean, seeing through a more positive angle because I did that whole transformational process without a coach, without a support structure. It took me years and years of trial and error to get from where I was to where I wanted to be in the market.

You mentioned on your website that you said that the consensus is nearly always wrong. Have you been or did you become a contrarian investor?

I wouldn't say that I'm a contrarian investor. I'm not a blind contrarian. And that's not how I see myself. I like to think of myself as an independent thinker. You know, I follow the crowd when I feel it's the right step. And I bet against the crowd when I feel that's where the odds are. So I wouldn't qualify myself as a contrarian. No. But, you know, that's what's needed as a trader. You need to be an independent thinker. You can't be a...

blind crowd follower or blind contrarian. You have to learn to think for yourself and by yourself. And for those people that are able to get to this point, I mean, this is where the money is.

So one of the aspects of psychology and trading that you mentioned frequently on your website is the idea to embrace uncertainty. Can you elaborate on that a little bit for us? Right. So I know you guys have had different trading psychology experts on the show, and they're great at what they do. Some talk about

The importance of having the right money beliefs. Others talk about just having proper routines and habits in place and focusing on the process and all of that. All great. Very, very important. That being said, my approach is a little different in my one-on-one work.

With traders, I focus on three main pillars. First, as you mentioned, it's the embrace of uncertainty. Second, it's self-awareness and emotional management. And third, it's accountability. In my experience, in my own personal experience, but also from having worked with so many traders around the world, without a thorough understanding and a thorough appreciation of uncertainty,

without proper emotional management, without proper accountability, you're just not going to approach trading with the right mindset and you won't be managing your risk in a

how it's in a sensible and meaningful way. And without those, without the right mindset and commitment to risk control, there's just no way you'll survive long enough in the market to experience success. You'll continually fall off the bandwagon. And to come back to your original question about uncertainty,

Real story here, by the way, my partner calls me Dr. Uncertainty. My friends call me the Uncertainty Guy. Just funny nicknames they've given me because when discussing just about anything from politics to religion to philosophy, I'm always issuing caveats and reasoning and probabilities and expressing humility towards incomplete knowledge.

And I mean, that's what being in the market for so long does to you. That's what it's done to me, at least. It's giving me this framework to think about things more sensibly. We would think that most traders would naturally understand and say, oh yeah, of course there's uncertainty. There's no guarantee that it's going to go up. But what is it about uncertainty? I mean, what is the ego's

with uncertainty. We can intellectually know that it's uncertain, right? How does the ego play into the concept of uncertainty? Right. So, Ian, look, for your audience, trading doesn't require you to be a rocket scientist, all right? It doesn't. But you do need to understand what uncertainty is, how it manifests itself in the market, and

what that means for you as a trader and what that means for your trading strategy or your system. And only then can you get clear, I mean, crystal clear about your risk management protocols and just your overall mindset, your overall mental approach to trading. So Ian, before I jump to your question, let's just dumb down this concept of uncertainty so that everybody can understand.

First, let me ask you and your audience just a rhetorical question. Is there certainty in the market? Like when you place a trade, do you know for sure whether you'll be a profitable trader or not? And yes.

The answer is you don't know, right? You can't know. And so this begs another follow-up question. Why don't you know whether the next trade or the next series of trades will be profitable or not? Well, the very simple tell it like I'm a five kind of answer is that markets are composed of people, right? And different people

Always getting in and out different people with different timeframes, different methods, different beliefs about what is high and what is low, different outlooks on the underlying, right? Different reasons to buy or sell different agendas.

And you can't get into each and everyone's head and see what's motivating their buy or sell decisions, what they're going to do next. So that's a very simple answer to why there's uncertainty in the market, because there's

Because we're dealing with people, all right? And people are always trying to imitate each other. They're always trying to outsmart one another. They're always changing their minds based on facts, but also based on whims and fantasies and emotions. I mean, it's very messy. Human affairs are a very messy thing. Hence, the omnipresent uncertainty that's in the market. And so...

When you place a trade, you just don't know what's going to happen next. And that means that there's a lot of noise in the short term, even though your trading system or strategy wins, statistically speaking, I mean, over a big enough sample in the short term.

Anything can happen. Anything. You could win more than you lose. You could lose more than you win. And that's something that's very hard for people to accept because they're coming into the market with this mindset of having to make money over the next trade. And as we've seen, as I've just discussed, as I've just explained, the market doesn't work like that. Trading doesn't work like that.

So prior to making a trade, when participants or a trader is just looking at a variety of different stocks, they're not attached to them one way or the other, whether they go up or down. And then does the act of actually choosing a stock actually

and then putting money on the line, actually investing in it, putting skin in the game, does that act then change the psychological bent toward wanting to ignore the bad news or ignore the reasons to sell and then over-inflating the reasons why the stock is going to go up more so than they would intellectually reason that prior to making the trade? Mm-hmm.

Yeah, well, look, most people approach the market...

And they learn about technical analysis and they think that technical analysis is telling them what's going to happen next over the next trade. And that's not how things work. Technical analysis helps you assess the broader trend and gives you a probabilistic guesstimate about the possibility of whether their trend will continue or will turn around. That's what technical analysis does. Technical analysis doesn't tell you what the market will do next. And so...

Most people, most traders will approach trading with this mindset that TEA is telling them or the system is telling them that they're going to have a winning trade on the next trade. And as I just mentioned, there's uncertainty. But almost all trading errors have roots in the intolerance of that uncertainty. It's because people...

are not seeing or refuse to see that there's uncertainty. They might understand it intellectually in a sort of loosey-goosey way, but they're not, they don't understand it, you know,

viscerally within their core that there's uncertainty and that there are risks. Almost all trading errors, almost all emotional struggles have roots in that intolerance of uncertainty. When traders remove their stop loss, expecting that the market will reverse and go back in their desired direction, that's intolerance of uncertainty right there. They're expecting something from the market that it cannot provide. They're expecting that it caters to their needs.

When traders hesitate to pull the trigger on their trades, that's intolerance or uncertainty. When traders close a winning trade too early, only to see the market ramp up higher and higher and higher, that was fueled by their intolerance or uncertainty.

That too is a discomfort. It's an intolerance of uncertainty. So they jump the gun on their trading process because they fear missing out on what could be an amazing opportunity. Once again, Ian, most trading errors like that, most headaches that traders experience in trading in the market come from them expecting something from the market, something it cannot provide, which is certainty.

And that's what drives, once again, 99% of trading errors that traders make, that intolerance of uncertainty. And look, it's not really uncertainty that's a problem. I hope I'm making this clear. It's really that intolerance of uncertainty that we have within us, right? It's all this sort of,

of over-intellectualization that we do that causes us to worry too much and that causes us to make emotions based trading decisions in the market. That's what's a problem, but that's fixable also. There's a few ways to fix that.

First one is to learn to embrace that uncertainty, right? To learn to understand why there's uncertainty, how it manifests itself, what it says about you, what it says about your strategy. It's being crystal clear about those different things. Then you can then learn to sort of relax in the midst of that uncertainty.

Yvonne, when you say embrace uncertainty, I equate it to like being comfortable with discomfort and because you don't know what's going to happen. But I think a lot of it stems from the fear of losses in the market, the fear of losses. How does that play into uncertainty? Right. Well, this is the primary reason why there's a fear of uncertainty because people come into the market, but they haven't truly embraced uncertainty.

the idea that they can have losing trades. But that's what the market does, Tessa. It hands us opportunities coupled with risk. There's no free lunch in the market. The market, once again, will hand you opportunities and couple those opportunities with risk.

And so on a trade by trade basis, if you're following a system that has a long term positive expected value, if each bet that you make is a bet that is sound, statistically speaking, then no matter what happens on a trade by trade basis over the long term, you're virtually guaranteed to win more money than you lose. But the thing is that people approach trade trading with this mindset of having to make money

on the next trade. And that's a wrong mentality to have in an environment that has so much uncertainty because, you know, it's, it's, you're approaching the market with the wrong expectations. And that's what causes those, those traders to lose at the end of the day. And look, I myself have been through this. I've struggled a lot with this. That's why, you know, in my mission as a trading psychology coach and consultant, I really try to sort of

help traders embrace the fact that there's uncertainty and that risk is always present. And I always try to help them internalize the idea that survival is absolutely key. It's the first thing

traders should learn to focus on and get good at. It's risk management. It's focusing on survival. Because if you have that in place, that ability to survive, to take small losses and to move on to the next opportunity and the next one and the next one and the next one, then it's just a matter of

time before the market first starts to favor your specific trading strategy, right? Because the market won't favor your trading strategy all the time. Sometimes you'll reap losses, a series of losses. Sometimes you'll reap profits, series of profits. But if you can stay in the game like that,

by betting small, by keeping your risks small on a per trade basis, you're more likely to succeed and to take advantage of whatever opportunity the market is constantly handing us. That's one. And the second point is that if you stay in the game, if you can survive long-term, what's happening is that you're slowly building competence as a trader. Because

Look, you learn to swim by swimming more, not by swimming less. All right. You need to have skin in the game. You need to be able to to refine your skills. And the only way to do that is by staying engaged with the market, by trading small and and

and focusing on developing mastery. So that's the message I try to impress upon traders. It's to not be too impatient to make money in this field. Focus on building a set of money-making skills first, and then the money will naturally follow after that. Is it safe to say when you trade small, you lose smaller? And then when you lose smaller, you can learn through those losses. You know, those are lessons learned.

Two, when you're losing. I don't know if that makes sense, but you're learning through your losing, but you're losing smaller because you're trading smaller. Does that make sense? Absolutely. Look, everything is a learning experience in the market. Every outcome that you go through, every trade that you place is an opportunity to learn and to better yourself and to refine your strategy and to become a better trader. Chat with Traders is brought to you by TastyTrade.

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Look, you can make consistent money in the market despite the presence of uncertainty, despite the fact that you don't know what the outcome of your next trade will be. You just have to learn to approach trading from a statistical probability sort of lens. And this kind of approach demands that you do not get emotionally attached to any single one trade outcome, to any single one trade.

And it asks of you that you start to focus on the long-term picture and sort of letting the numbers work in your favor and sticking with a consistent method, a statistically viable method, a method that has a positive expected value, positive expectancy.

You just keep placing those bets, those positive expecting bets over and over and over and over again without getting destabilized mentally, emotionally by any one single outcome.

You mentioned on your site that loss aversion is the reason most people go bust and fail to make money. And my question is, if this is so, wouldn't traders be placing tight stop losses and cutting their losers quickly because they hate to lose? Right. It's quite insidious because, yes, they hate to lose. And, you know, when you think about it logically, you would think that, you know, this would...

make them, you know, control their risk better. But, but it's, it's in the, it's serious because it's, there's also a desire to win there and to win a lot of money in a short period of time. And so people are willing to sometimes to take bigger, big risk with poor odds, just to have a shot at earning a lot of money in a short period of time. So look,

Human psychology is a complex thing. I don't pretend to sort of understand it thoroughly. I just know what has been proven to work time and again in the market. And it's this. It's embracing uncertainty. It's working on developing emotional stability, emotional maturity, however you want to call this.

And third, it's focusing on the long-term picture and approaching trading from a statistical probability lens. And if you have that in place,

once again, you're virtually guaranteed to make more money than you lose in the long run. But personally, I'm not big on discretionary trading, and I know a lot of your audience specialize in this. And personally, I know too much about human fallibility, about the kind of biases that we have as human beings.

I'm just not a big believer in discretionary trading. I think that winning consistent discretionary traders are few and far between. And you have a better chance at succeeding at trading with a systematic approach. And so it's sad that most people will not focus on that because for some reason, people like to use their mind. They like to think

fancy the idea that they're using their intellect to be able to make money out of the market. But that's also the reason why most traders fail, because there's a side of them that refuse to follow systematic rules because it's too boring. It's too monotone. Fair enough. But this is what makes money in the long run. You have to sort of graduate from this gambler's approach

approach and start focusing on more of a systematic approach because that's how casinos make their money. They're applying a methodology that puts the odds in their favor. And this is why they win money in the long run, even though some gamblers will hit a jackpot here and there. Over the long run, should the gambler keep playing, the house is virtually guaranteed to make more money than they lose. That's what wins in the market as well.

Just real quick, when you say systematic approach, it doesn't necessarily mean algorithmic, right? No, no. I'm talking about the rule-based approach, one that structures your behavior, that helps protect yourself from yourself.

And this is what works. This is how I've been able to be super consistent in terms of my performance in the market. Look, I'm not the best trader out there, Tessa. I'm an average trader, I would say, but I'm very, very consistent.

I'm very consistent with my rules. I'm very consistent with my performance as well. Usually, I'm going to be up anywhere between 10%, 20%, to 30% on a per year basis. And you could say, OK, oh, well, that's not that impressive.

when you add the element of consistency to it, you can see how impressive that is. I'm not interested in being up, you know, 100, 200% one year and down as much, you know, the next year. As a trader, I've come to a point in my own trading in my career, especially now since I trade a fund for a small group of investors. What matters to me is survival. It's allowing myself to be in those situations where I'm just,

taking trades that have a positive expected value. And I'm doing that time and again, over and again in the market. And I'm letting the numbers work for me. And more traders, my whole point is that more traders would be successful in the market if they were able to adopt a similar kind of process-based, numbers-based approach instead of desperately trying to use their intuitions or their discretion to make this or that decision.

transitioning to the topic of cultivating emotional stability. Don't you think most traders already consider themselves logical, numbers-oriented people? And they might ask you, why do we need to cultivate emotional stability? I'm a numbers guy. I can think logically. Right. Well, the thing about the human mind to understand, Ian, is that it's not...

The human mind hasn't evolved to do trading, all right? It's evolved to survive in a physical world fraught with physical dangers, right? Lions, bears, what have you. Trading...

It's been like, what, like 100 years or so since it's been around. And it's still new. We haven't developed the sort of mental heuristics to help us to for us to be good at it naturally. I mean, to be good at it yet. That's why we need rules. We need a certain element of emotional stability and just emotional maturity so that we're not

blindly following our impulses or our just short-sightedness.

And so that's why it's important to develop that emotional stability. And personally, I'm big on mindfulness, as some people in your audience might know. And you'll often hear platitudes around mindfulness, like it's living in the present moment. But this doesn't fully describe what mindfulness is, in my opinion.

mindfulness is something deeper than that. It's this ability to cultivate this certain composure, certain emotional stability in the midst of life's ups and downs. And so that's why I think that mindfulness and trading is such a, it's so much made in heaven. You know, it's just a perfect combination. And, you know, that's what I teach traders as well. I teach them to develop a strong meditation practice, given my experience

My background as a Buddhist monk, I've had the chance to study meditation extensively on retreats and silent retreats and all of that. And so I like to think that I've developed a certain understanding of the practice. Yeah.

That's what I focus in my work with traders as well, to develop that strong meditation practice that helps them develop this emotional stability, this emotional maturity in how they deal with the markets of ups and downs.

So do you believe that without mindful awareness, do you think that we can easily become puppets of our emotions? Absolutely. You know, I would even add that most people live like that. You know, they don't have any...

awareness of their inner lives. They don't suspect that there's a thing as, you know, what, as an inner life, you know, they just live their lives outwardly, right? They're constantly reacting to what's pleasant, constantly reacting to what's unpleasant. And so that's also part of the reason why trading is so difficult. It's so challenging because most people lack that

that self-awareness and that capacity to introspect and to look at themselves and to look within themselves.

You know, I would say most people are living like that. They're living like puppets. But once you develop that capacity to look at yourself, that ability to look at yourself, your flaws, your strengths, you know, what's good within you, what's bad within you, your difficult emotions, your difficult thoughts, you know, without trying to sort of escape from them, move away from that, but actually facing them frontally.

I mean, your whole life has changed because when you do that, you gain certain insights into the nature of these what we call phenomena, you know, thoughts, feelings, emotions. Those are those are phenomena that are arising in the present moment.

And when you look at them, when you observe those phenomena for what they are, you realize that they're impermanent, you know, they're selfless and that you don't have to follow each and every one of them. You can pick and choose which one to follow. And when you get to this point, I mean, your whole life has changed, you know, the way you approach your life has changed, the way you approach trading has also changed because there's more maturity in how you deal with your internal states now.

Mm-hmm. So by developing mindful awareness, which from my understanding is, is like an internal awareness of the emotions that are cropping up, starting to develop as they develop and you're able to catch them like, Oh, there I go again with the greed or with the fear. And so is mindful awareness. And do you think that's,

pretty necessary to separate ourselves from the fear of missing out or the fear, uncertainty and doubt. Oh, yeah, absolutely. Well, here's a quick definition of mindfulness. It's the awareness that arises from paying attention to

on purpose in the present moment and non-judgmentally, non-judgmentally, very important. It means that you're feeling whatever it is that you're feeling, you're experiencing whatever it is that you're experiencing, good or bad, pleasant or unpleasant, and you're being aware of it with exquisite detail and you're doing it, you're observing it all with complete acceptance. And

And without an ounce, without generating an ounce of craving for what's pleasant and aversion for what's unpleasant, what's uncomfortable. And when you can observe yourself and your inner lives and your thoughts, no matter how difficult they are or they seem to be in your feelings,

from this place of freedom, then you can see how much of a game changer that can be in trading. Because money is on the line and because we're so attached to the value of money, to what money means, it's so difficult to maintain a rational frame of mind and to not sink into that default loss aversion bias that we all have.

as you can imagine, people that are able to cultivate that mindful awareness, they have an edge. They have a psychological edge that a lot of market participants don't have because they're able to experience their emotions from that place of freedom. And instead of acting them out blindly, they're able to

Create some space there between reaction and emotion and choose to stick with a trading plan and the trading process and all of that. And so it can absolutely be a game changer, provided you cultivate a consistent practice, provided you give the practice the time and attention and the commitment to the practice. That's what I meant to say.

On your site, you mentioned the need to cultivate equanimity. What is this and how does this apply to trading? Right. So equanimity is a quality, is a byproduct of a consistent meditation practice that you're cultivating, that you're developing. And it's that quality of being at ease with whatever happens.

Whether in your life, in the market, out of the market, with whatever your emotions are or your thoughts are. That quality of equanimity, I feel, is so important for traders because this is what helps you stick with your trading strategy or system. And yeah, it helps you process emotion from a more rational frame of mind.

And once again, it's a quality that you can develop and cultivate.

on a daily basis by adopting a practice like meditation. And you don't have to do it for extended hours every day. Yeah, you can do it for just 20 to 30 minutes per day, you know, in the morning, preferably before the market opens. You just take some time to be with yourself, to sit with yourself and you observe your breath and your thoughts and your emotions. You observe whatever is arising for you in the moment and you try not to react immediately.

blindly to what is pleasant or what is unpleasant. This is how you reinforce, develop, cultivate that quality called equanimity. And it's a very powerful quality in the mind, especially in the market. So for traders or people who have high EQ, do you think that they have an advantage in this area? Yeah.

Yes, I definitely believe that people that have a high EQ have a certain mental edge that other people don't have. It doesn't mean that other people can't develop that EQ because it's something that you can work on, that you can get better at.

But, you know, 70 people that have this innate ability to be emotionally stable and emotionally calm in the midst of pressure, in the midst of uncertainty, they have an edge that a lot of people don't have, certainly. On your site, you mentioned what the mind wants in the moment is not the best for it in the long term. Why is there a difference between what the mind wants now and what it wants in the long term?

Basically, the way the human mind works is that we're basically short-term oriented in our perspective, in our wants, in our needs. And this is why professional traders, they're able to think long-term. Those that make money on a consistent basis, they're able to think long-term because they're not blindly reacting to what they want right now. Because what you want right now

what you'll find in the market is that what you want right now is often at odds with the way the market is devised to make money available for you. Really, you have to find a way to drop this sort of get rich quick mentality and really focus on trading as a long-term thing. Because success is a plan. It really is. And success is a long haul game.

Most trade traders would do better if they were to embrace this. I mean, seriously, thoroughly, not just understanding it intellectually in a kind of loosey-goosey way, but really feel it viscerally in their guts that your success is going to take time. And paradoxically, when you're able to do this...

That's when success comes to you much faster than if you were to just follow your short-term impulses to get rich quickly in the market. You also mentioned that if your position size is too big, you'll care too much. But if it's too small, you won't care enough. How do we then optimize our position sizes for that sweet spot?

Right. But that's where self-awareness comes in. Because, you know, when you know yourself, you know, when you're venturing a little bit too much out of your comfort zone, the goal is not to venture too far out of your comfort zone, but it's not to stay within it as well. It's to really find that sweet spot and that, you know, where you're actually challenging yourself, but when you're not sinking into complacency as well.

So this is where your self-knowledge comes in, your ability to look at yourself and your emotions. And this is why I'm so big on that, you know, self-awareness, just emotional awareness. It's a big, big part of what constitutes a winning approach to the market. Look, most institutional traders will outperform retail traders time and again. And the reason they do

is because they have a risk manager or an accountability officer that's behind their back, that's looking over their shoulders, and that's making sure that they're sticking with their risk allotments and that's sticking with the process and the trading rules and all of that. And we retail traders, on the other hand, we don't have that luxury. Right from the get-go, we're our own bosses.

which is great, right? We're working for ourselves, by ourselves. This is amazing. But at the beginning, when a trader hasn't yet developed self-mastery or hasn't yet developed the proper trading skills, it's a big, big disadvantage. This is why as much as possible, retail traders have to find a way to keep themselves accountable.

And that's why I always recommend people to join, you know, trading groups or to hold a journal, right? Because it's like a mirror that you can look at and where you can see where you are, where you are now and where you're going forward. That accountability is so, so important. Yet most traders, they, you know, they couldn't care less about that. They just get into the market and,

And they just place trades based on whims and fantasies. But that's not how you win in this field in the long run. So that accountability is central to the project of good trading.

Yeah. I wonder if a lot of traders don't take accountability seriously or are as interested in it. Is it because oftentimes accountability is often associated with negative connotations, you know, its consequences, you know, whether it's related...

you know, something in school or work. But as you said, in trading, it's so important because a lot of us traders, we're alone. We're trading alone. We oftentimes don't have a support group and we think a lot inside of our heads. And, and I mean, ultimately we are responsible for our own actions and we are accountable to ourselves, but

I feel like a lot of times it's not enough. You know, at work you have a normal job. You would probably have someone to, you know, report out to and provide your progress and things like that. But as a trader, you don't. Hmm. Hmm.

Yeah, for sure. And, you know, in my coaching program, I provide that institutional grade level of accountability. So basically what I expect from my students is not your profits at the end of the month, at the end of the day, at the end of the week, whatever. What I'm really interested in is

is seeing them be and stay consistent in the market. I don't care about winning trades. I don't care about losing trades. What I'm really looking for is that consistency of behavior. It's that consistency of following one's trading process and rules. Because I know that should you do that, should you stay behaviorally consistent like that,

Consistent results is what you will get because consistency begets consistency. In an uncertain environment like the market, consistency begets consistency. And so that's why I'm so strict with that.

And so, you know, I try my best not to put any sort of pressure on my students to perform because once again, I'm not interested in how much money they're making and losing. It's really that consistency of behavior.

If traders had had a way to get that level of accountability, I'm confident that the failure rate in this field wouldn't be as high as it is. You know, that first, that understanding of uncertainty, second, that emotional management and third, that accountability. This this is this is a killer combination there.

Excuse the last interruption here. This is Tessa. We hope you're enjoying this episode so far. If you love the podcast, please give Chat with Traders the best review you can on whatever platform you're listening from. This will help us to keep the episodes coming. Also, if you haven't subscribed to our email list, please hop on to chatwithtraders.com and click on subscribe so we can keep you posted of information that may be of importance. Thank you. Now back to the chat with our guest. Right.

Why do you think many people or many traders and especially beginner traders don't take the mindset and trading psychology seriously from the beginning, or maybe they don't have the tools to do so? Is it because it's such an intangible thing, right? You know it's important, but it's intangible in some ways. And maybe at the beginning of

a trader's trading journey. They're more focused on just kind of understanding the market and the mechanics. But so they put the mindset and the trading psychology practice, like maybe later until they get in trouble. Or I'm just wondering why, why is it such a challenge to get this right from the beginning?

Right. I feel like it's such a challenge because right from the get-go, they're approaching trading from just not the right frame of mind. They approach trade trading, they learn about trading and they see how potentially easy it is to make money. And they learn about technical analysis and they start to entertain that thought. I mean, everything around them, everything about the trading world,

is leading them to believe that, okay, this system, this pattern is going to help them get consistent results in the market if they were to trade it consistently. But the thing is that it doesn't work like that. Once again, there's uncertainty, right? And this is so poorly understood. A lot of traders, they don't see that uncertainty or they refuse to deal with it, to address it frontally.

And so once again, they put an excessive focus on analysis and then they feel exhausted because everything they try to do to manage their worries and fears of the unknown. Well, it doesn't help. It's the wrong approach because under, you know, what's underlying that approach, it's the idea that they're trying to eliminate uncertainty and uncertainty.

what they're really doing is upping their expectations and confirming and reaffirming their own biases and fears. And

Tessa, look, we'll never be able to fully eliminate uncertainty in the market. We'll never be able to fully eliminate uncertainty in the market, no matter how hard we try. It's like by trying to avoid uncertainty in the short term, what we're really doing once again is upping our expectations and bringing a certain...

amount of emotional struggle, of psychological struggle into our trading process that's quite frankly unnecessary, let alone unprofitable.

The only way of dealing with this is to see how much of a psychological game trading really is and to see that there's uncertainty and to make peace with that uncertainty. This is the only way of improving your trading and just your performance overall is to make peace with the fact that there's uncertainty and to focus more on the mindset management aspect of it all. Yeah.

Yeah, so I see these three pillars that you mentioned. It's essential. And I feel like it's a constant practice. I don't feel like we can ever graduate from it. I mean, even the veteran traders...

and seasoned traders, they will run into issues, right? I mean, it's a constant battle and a constant practice. You just get better at it. Do you agree? I, oh, absolutely. I, you know, I, myself, I am still a work in progress. Tessa, you know, I, you know, I still, I, you know, I can't say that I'm a point in my trading where, you know, I'm very, very consistent.

with my rules. But that doesn't mean that I'm just an unemotional robot. No, when I get losses, it still hurts. I still get frustrated by them. When I miss an opportunity, I still get frustrated by that. But it's not an afflictive experience anymore. And because there's this thorough understanding that

Okay, each trade outcome is quote-unquote random. Yeah, there's emotions involved, but I try as best as possible to befriend my emotions, even the difficult ones. And this is what wins in the long run. It's changing your whole mental approach

to the trading game. And most people are just focusing too much on making money in the short term, on this trade, on that trade. And it's really first, what must come first is

is uh just managing your risk because you understand that there's a real downside potential and when you get good at that at this at managing your risk on each and every trade then you can get better at uh at managing your profits a little bit more but um yeah it's it's all about viewing this as a long-term game instead of it just this sort of get rich quick scheme

You mentioned in our pre-call that you are a work in progress. Of the three areas, embracing uncertainty, cultivating emotional stability, and accountability, which area have you found to be the most challenging for you?

It's definitely the emotional stability part because I've always been a very sensitive person. This is who I am as a person. It's my nature, right?

All right. And so when I first came into trading, I needless to say, I was an emotional mess. I would take, you know, every losing trade personally. You know, I would think that this says something about who I am as a person. OK, I reaped a loss, so I'm a failure. And so it's only through repeated practice, repeated engagement with the market that I was able to sort of de-energize those beliefs a little bit.

But they're still there, you know, in the background lurking. You know, when I don't pay attention, sometimes they sneak up on me, those insecurities. So once again, I'm a work in progress. This is a never ending journey. It's not a journey with a destination. And so this is why it's also important to learn to love that journey, no matter where you are.

you know, on that journey, learn to love it for what it is and learn to see it as a learning experience. And when you do that, you'll make giant leaps of progress in your development as a trader. At least it was the case for me and it still is. Yvonne, do you have any final thoughts for the beginner traders?

It's useful to see the market as if it's a random system. And this way, your expectations will be more aligned with the way the markets are, which is, you know, there's an uncertainty component to it.

Right. And so so that's first. Second, you know, try to focus more on on the mental aspect of trading. This is all too important aspect that so many traders will will ignore because they think they've already have it figured out. But the reality is that most traders lose money in the market. I mean, that's a statistical fact. And they don't lose in the market because the market is rigged.

No, there are cycles, there are trends in the market, and you can take advantage of those cycles and those trends. And you don't necessarily have to pick bottoms or tops to make money. Just a piece of the action is fine. And you can do this consistently through proper risk reward. You can make consistent money in the market.

But the only problem is that most of the time, traders get in their own way and they're not able to make consistent money like that, even though it's possible. It's just theoretically, it's pretty easy. It's pretty simple, I would say. Not easy. It's pretty simple. If you were just to follow a structure, a trading system that has a positive expected value, over the long run, you should make more money than you lose.

But most traders aren't able to make money because they make this decision

unnecessarily complicated on themselves. They approach trading with too much attachment to the outcome. They approach trading while focusing too much on the money, what's being lost, what's being won. I mean, they're not viewing it as this long-term statistical probability game. If you can learn more about this, I'm sure you guys have a lot of

had a lot of great guests that expound more on that and just focus on learning. Don't focus on making money right from the get-go and just focus on building skills. And when you have those skills, when you have that self-mastery, as they say, the world is your oyster. Great, Yvonne. Thank you very much for sharing. It's great having you on the show. How can listeners get in touch with you to learn more about you? Right. I

Thank you so much for having me on, Ian, Tessa. People can just follow me on social media if they wish. I'm very active on Twitter. My handle is at Trading Composure. I'm also present on YouTube. Just type Trading Composure. I share a lot of information on those different platforms for free. Just no strings attached, none whatsoever.

And that said, should you require some more hands-on help, just check out my coaching program. And that's all. Thank you so much for having me on once again, you guys. Thank you so much, Ivan. Thank you.

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