The Man Who Cracked Trading Psychology - Jared Tendler
Exploring the deep roots of trading emotions, intuition, and the psychological tools traders need for lasting success
1h 28m·Guest Jared Tendler·Host Host·
Emotion Balance and Optimal Arousal
Trading performance hinges on hitting a sweet spot of emotional arousal. Too much emotion leads to reckless behavior, while too little creates disengagement. Each trader must discover their personal mix of energy and calm to stay effective.
Both over‑emotional and under‑emotional states sabotage trading
- When traders are over‑emotional, greed, FOMO, revenge‑trading, lack of confidence and euphoria amplify each other and cause poor decisions.
- When traders are under‑emotional (bored, flat, disinterested) they lack the drive to execute a plan and also perform badly.
- The optimal state lies somewhere in the middle, where emotions provide enough energy without overwhelming rational control.
Quote
00:03:09“When you're over emotional, the greed and the FOMO and the revenge trading, the lack of confidence, the overconfidence, the euphoria, all of those emotions get in, you know, amplified, you're going to equally suck.” — Jared Tendler
Quote
00:03:01“You do not want to show up to the markets flat, right? You're bored, disinterested, tired, you're going to suck.” — Host
Each trader must find an individual emotional mixture that works like a personal formula
- Jared describes the search for a “balancing act” that feels like a formula mixing different emotional energies.
- Some traders thrive when calm; others need hyper‑engagement and focus.
- The key is to experiment, observe performance, and settle on the mix that yields consistent execution.
Quote
00:03:19“There is this kind of balancing act that we're trying to find almost like a formula, a mixture of emotions of energy that you're trying to find and everybody individually has it.” — Jared Tendler
Quote
00:03:33“I think generally it's going to be people are, you know, at their best when they're kind of calm, but some are actually at their best when they're hyperengaged and hyperfocused.” — Jared Tendler
Excessive emotional arousal shuts down the brain’s emotional‑control center
- When emotions rise too high, the part of the brain that regulates emotion is disabled, leading to paralysis and revenge‑trading loops.
- This physiological shutdown limits rational decision‑making and can trap traders on a “train to revenge trading.”
- Recognizing this shutdown helps traders intervene before it becomes catastrophic.
Quote
00:04:47“When emotions rise too high, they shut down the part of the brain responsible for controlling emotion.” — Jared Tendler
Quote
00:06:12“When your emotions rise too high, you can get in this zone where you still retain awareness... but the emotional control center has actually weakened to the point where you now can't do anything about it.” — Jared Tendler
Faulty Perspectives, Biases, and Their Impact
Hidden mental models—biases, wishes, hopes, and even hope—fuel excessive emotions. By surfacing and labeling these faulty perspectives, traders can prevent them from hijacking decisions.
Faulty perspectives generate excessive emotions
- Jared emphasizes that it isn’t the emotion itself but the underlying faulty perspectives—biases, wishes, illusions—that amplify feelings.
- These mental shortcuts create a feedback loop where emotions become disproportionate to market reality.
- Identifying and correcting these perspectives reduces emotional volatility.
Quote
00:00:08“The idea is not to eliminate the emotion, but is the faulty perspectives that kind of run in the background that create excessive emotion.” — Host
Quote
00:01:01“We need to firmly distinguish what are the markers, the characteristics, the profile of that masquerading emotional intuition.” — Jared Tendler
Markers of emotional intuition help counteract hidden bias
- Jared suggests creating a checklist of physiological and behavioral markers (tight chest, shallow breathing, death‑grip) to spot when intuition is actually fear‑driven.
- Once identified, traders can deliberately play against that bias rather than act on it.
- This systematic approach turns a hidden bias into a tactical advantage.
Quote
00:18:41“My chest is tightened. My breathing has been shallowed. My hand on the mouse is more of a death grip.” — Jared Tendler
Quote
00:01:01“We need to firmly distinguish what are the markers, the characteristics, the profile of that masquerading emotional intuition.” — Jared Tendler
Hope and over‑confidence are hidden biases that distort performance
- Jared argues that hope leaves traders relying on elements outside their control, turning performance into a gamble.
- Over‑confidence stems from an illusion of control, inflating perceived skill and leading to reckless sizing when markets reverse.
- Both biases can be mitigated by grounding confidence in data and by focusing on controllable processes.
Quote
00:50:43“Hope is dangerous in performance because it leaves elements that ought to be in your control.” — Jared Tendler
Quote
01:16:30“Illusion of control produces overconfidence, which collapses when markets turn.” — Jared Tendler
Evolutionary Roots of Trading Emotions
Trading triggers ancient survival circuits—fight‑or‑flight, predator‑prey assessments—that shape our emotional responses to market risk.
Trading emotions stem from primitive survival instincts
- Jared links market stress to the same brain circuitry that once evaluated a rustle in the bushes as potential food or predator.
- The brain’s survival instinct creates a tension between gathering resources (profit) and avoiding danger (loss).
- Recognizing this ancestry helps traders reframe fear as a natural signal rather than a flaw.
Quote
00:04:07“Our anim animalistic brain... if I think back to our ancestors, if they heard a noise in the bushes, they could either go towards it and find a meal or it could be a predator and they could die.” — Jared Tendler
Quote
00:04:31“The market can also be analogous to this where you have blowing an account survival instinct to stay away from that versus marginal gain of a single trade.” — Jared Tendler
High emotional arousal triggers a shutdown of emotional regulation, a survival mechanism
- When emotions become too intense, the brain’s regulatory hub (prefrontal cortex) is suppressed, mirroring a fight‑or‑flight freeze response.
- This shutdown produces paralysis, making it impossible to execute a rational plan.
- Understanding this mechanism encourages traders to step back before the shutdown occurs.
Quote
00:04:47“When emotions rise too high, they shut down the part of the brain responsible for controlling emotion.” — Jared Tendler
Quote
00:05:47“When emotions rise too high, they shut down the part of the brain responsible for controlling emotion.” — Jared Tendler
Viewing market stress as a predator‑prey scenario clarifies risk‑reward dynamics
- The survival analogy frames each trade as a decision between a potential gain (food) and a possible loss (predator).
- This perspective makes risk management feel instinctual, aligning with our evolutionary wiring.
- Traders can use this lens to quickly assess whether a trade’s upside justifies the inherent danger.
Quote
00:04:07“If I think back to our ancestors... they could either go towards it and find a meal or it could be a predator and they could die.” — Jared Tendler
Quote
00:04:31“The market can also be analogous to this where you have blowing an account survival instinct to stay away from that versus marginal gain of a single trade.” — Jared Tendler
Distinguishing Real Intuition from Emotional Intuition
True market intuition is a calm, data‑driven gut feeling, while emotional intuition is a stress response. By learning physiological cues, traders can separate the two.
Physiological calm signals genuine intuition, tension signals emotional intuition
- Jared lists calm breathing, relaxed hands, and neutral chest as markers of true intuition.
- In contrast, a tightened chest, shallow breathing, and a death‑grip indicate fear‑driven intuition.
- Monitoring these cues in real time lets traders decide whether to act or step back.
Quote
00:18:41“My chest is tightened. My breathing has been shallowed. My hand on the mouse is more of a death grip.” — Jared Tendler
Quote
00:18:54“Breathing is normal, hands cut, relaxed.” — Jared Tendler
A checklist of intuition markers lets traders play against themselves
- By defining the physiological profile of emotional intuition, traders can recognize when a “justified” feeling is actually fear.
- Once identified, they can deliberately take the opposite action (e.g., tighten stop‑loss, avoid the trade).
- This systematic self‑opposition reduces the impact of biased gut feelings.
Quote
00:01:01“We need to firmly distinguish what are the markers, the characteristics, the profile of that masquerading emotional intuition.” — Jared Tendler
Quote
00:01:09“If you can create that distinguishing characteristics, then you know when to kind of play against yourself.” — Jared Tendler
Intuition can modestly raise win probability but must be validated against data
- Jared notes that intuition might lift a win rate from 55% to 57% in a specific state, a marginal but real edge.
- However, intuition alone cannot replace systematic back‑testing; it should complement a statistically sound edge.
- Traders should track intuition‑driven trades to confirm any measurable advantage.
Quote
01:10:45“Intuition can raise win probability slightly, maybe from 55% to 57%.” — Jared Tendler
Quote
01:09:33“Hot hand fallacy: belief that streak increases probability.” — Host
Confidence, Overconfidence, and Illusion of Control
Confidence is an emotional perception of skill, not the skill itself. Overconfidence from an illusion of control can be deadly, but journaling and data keep confidence grounded.
Confidence reflects perceived skill, not actual skill
- Jared defines confidence as an emotion based on one’s perception of their knowledge, experience, and strategy.
- New traders can have high confidence despite low competence, while seasoned traders often have modest confidence that matches reality.
- Misaligned confidence leads to poor risk choices and over‑trading.
Quote
01:16:13“Confidence is an emotion that reflects your perspective of your skills, knowledge, experience, strategy, market.” — Jared Tendler
Quote
01:15:41“New traders can have incredible confidence, sometimes objectively higher than seasoned traders.” — Jared Tendler
Illusion of control fuels overconfidence and collapses when markets reverse
- When traders feel they control outcomes, they over‑size positions and ignore risk.
- This illusion is reinforced by short‑term success, but a market turn quickly shatters it, leading to sharp losses.
- Recognizing the illusion and grounding decisions in objective data prevents the crash.
Quote
01:16:30“Illusion of control produces overconfidence, which collapses when markets turn.” — Jared Tendler
Quote
01:16:21“When you’re doing really well, you feel like you’re more in control of your results than you actually are.” — Jared Tendler
Journaling and back‑testing calibrate confidence to reality
- Systematic record‑keeping forces traders to confront both wins and losses, exposing gaps in skill.
- Back‑testing provides objective evidence of edge, allowing confidence to be adjusted based on statistical performance.
- Over time, this feedback loop aligns perceived ability with actual capability.
Quote
01:15:59“Journaling and backtesting help calibrate confidence to align with reality.” — Jared Tendler
Quote
01:16:01“Sometimes it's being more honest with yourself. Sometimes it's the journaling and the back testing.” — Jared Tendler
Stoicism and Psychological Training Tools
Stoicism can be a useful short‑term crutch to manage emotions, but it must be paired with deeper exposure and training to resolve underlying issues.
Stoicism is a short‑term crutch, not a cure for deep emotional issues
- Jared likens stoicism to a splint for a sprained ankle: useful for immediate function but does not heal the underlying injury.
- Relying solely on stoic suppression leaves the root cause of emotional volatility untouched.
- It should be combined with deeper work such as exposure therapy and pattern recognition.
Quote
01:52:54“Stoicism is neither correct nor incorrect. It's basically using crutches to aid a sprained ankle or a broken leg which in the short term is necessary.” — Jared Tendler
Quote
01:53:09“We can patch you up and keep you functional, meaning you're treating the symptom, not the cause.” — Jared Tendler
Stoic practice builds mental toughness that lets emotions become useful information
- By learning to observe emotions without reacting, traders turn feelings into a compass rather than a driver.
- This mental discipline creates a neutral baseline, allowing clearer analysis of market data.
- Over time, stoicism becomes a tool for strategic emotional integration rather than suppression.
Quote
01:55:27“Stoicism can build mental toughness, allowing better use of emotions as information.” — Jared Tendler
Quote
01:39:41“We’re trying to actually use them to better understand the internal governance, the biases, the flaws that we are bringing into the market.” — Jared Tendler
Combining stoicism with exposure therapy accelerates acclimation to market stress
- Jared recommends deliberate exposure to stressful market situations while maintaining stoic observation, similar to training a muscle.
- This dual approach reduces the physiological shutdown described earlier and expands the trader’s tolerance window.
- The result is a trader who can stay functional under high‑stress conditions without emotional paralysis.
Quote
01:58:20“Acclimating to stress improves performance.” — Jared Tendler
Quote
01:59:05“Take breaks, go outside, not looking at phone.” — Host
Risk Management, Position Sizing, and System Alignment
Position size must reflect setup quality and personal temperament. The system's profitability is the ultimate gatekeeper; confidence cannot compensate for a weak edge.
Position size should match setup quality (A+ vs B+)
- Jared advises allocating larger capital to high‑conviction (A+) setups and smaller size to lower‑conviction (B+) setups.
- This scaling respects the statistical edge of each trade and protects the account from unnecessary drawdown.
- Adjusting size dynamically also aligns with a trader’s risk tolerance and emotional comfort.
Quote
01:13:13“A+ setups should have greater size than B setups.” — Jared Tendler
Quote
01:13:20“If you're struggling, you may need to reduce risk on B setups.” — Jared Tendler
Technical strategy must be adapted to match psychological temperament
- When a trader’s temperament cannot sustain long‑term swing trades, shifting to intraday or shorter time‑frames reduces emotional fatigue.
- Conversely, traders who thrive on deep analysis may prefer longer‑term setups.
- Aligning strategy with personal psychology prevents burnout and improves consistency.
Quote
01:04:34“Adjust technicals to fit psychology.” — Host
Quote
01:05:02“If you're stuck, you may need to cut winners short.” — Host
A profitable system is the foundation; confidence cannot compensate for a weak edge
- Jared stresses that no amount of confidence can make an unprofitable system work.
- System profitability must be validated before scaling confidence or emotional investment.
- This hierarchy ensures that psychological tools enhance, rather than replace, a solid edge.
Quote
01:31:36“You can't make money without the system.” — Host
Quote
01:16:41“Confidence is never more important than your system.” — Jared Tendler
Prop Firms: Discipline vs Gambling
Prop firms offer capital and a structured environment but also present an easy reset button that can turn disciplined practice into gambling if misused.
The easy reset button in prop firms encourages gambling behavior
- Jared points out that the ability to quickly replace a blown account tempts traders to treat losses as a game rather than a learning event.
- This habit reinforces a short‑term, win‑or‑lose mindset, undermining long‑term skill development.
- Recognizing the reset as a gamble helps traders treat it as a warning sign.
Quote
01:26:14“The easy reset button is gambling.” — Host
Quote
01:26:38“You cannot at any moment gamble and those easy resets are gambling.” — Host
Prop firms can serve as an incubation period for discipline if used correctly
- Jared notes that prop firms expose traders to real capital, forcing them to adhere to risk rules and develop consistency.
- When approached as a training ground rather than a shortcut to money, the experience builds habits useful for independent trading.
- The key is to treat the firm as a stepping stone, not the final destination.
Quote
01:24:47“Prop firms provide an incubation period to develop discipline.” — Host
Quote
01:24:55“It's not just about getting funded. It's about actually having those payouts and looking beyond.” — Host
Relying on prop‑firm payouts without skill development leads to long‑term failure
- Jared warns that traders who chase quick payouts without building a robust edge end up losing money once the reset button is removed.
- The false sense of security from prop‑firm capital can mask fundamental deficiencies in strategy.
- Sustainable success requires mastering the market first, then using capital as a tool.
Quote
01:19:24“One of the worst feelings as a trader is investing hundreds of dollars in a prop firm, earning your way to a payout just to get scammed by the prop firm.” — Host
Quote
01:27:45“If you’re just trying to get funded quickly, you’re in the gambling category.” — Host
Alignment of Temperament, Personality, and Trading System
Long-term success emerges when a trader's natural temperament, personality traits, and chosen system are in harmony.
Success occurs when system, temperament, and personality are aligned
- Jared explains that the most successful traders operate where their edge, style, and personal temperament intersect.
- Misalignment (e.g., a hyper‑engaged personality using a calm, low‑frequency system) creates friction and performance drops.
- Self‑assessment tools can help identify the optimal match.
Quote
01:12:01“Your system, your style is aligned with your temperament, personality.” — Host
Quote
00:04:47“When emotions rise too high, they shut down the part of the brain responsible for controlling emotion.” — Jared Tendler
Temperament dictates preferred risk tolerance and engagement style
- Some traders perform best when calm and methodical; others thrive in hyper‑focused, high‑energy states.
- Recognizing whether you are a “calm” or “hyper‑engaged” type guides the choice of time‑frames and position sizing.
- Ignoring temperament leads to burnout or under‑performance.
Quote
00:03:33“I think generally it's going to be people are, you know, at their best when they're kind of calm, but some are actually at their best when they're hyperengaged and hyperfocused.” — Jared Tendler
Quote
00:03:37“Some more of the sort of energized, engaged.” — Jared Tendler
Choosing a market style that fits life circumstances enhances longevity
- Jared cites swing trading as a lower‑time‑commitment option for traders with jobs or families, allowing them to preserve energy for market analysis.
- Intraday or high‑frequency trading suits those with more discretionary time.
- Matching lifestyle to trading style reduces stress and improves consistency.
Quote
01:22:38“Swing trading takes less time, can fit around life.” — Host
Quote
01:21:55“If you’re a day trader with two jobs, you need a strategy that doesn’t consume all your time.” — Host
Breaks, Physical Health, and Cognitive Performance
Regular physical breaks, adequate sleep, and managing fatigue preserve mental bandwidth, preventing emotional shutdown during trading.
Short, frequent breaks improve focus and prevent emotional overload
- The host recommends a 1‑minute stand‑up, deep‑breathing break every 15 minutes to reset the nervous system.
- These micro‑recharges keep the prefrontal cortex engaged, reducing the chance of emotional shutdown.
- Over time, the habit builds a resilient attention span for long trading sessions.
Quote
01:02:07“Take breaks every 15 minutes, stand up, take a few deep breaths, look outside.” — Host
Quote
01:02:33“It's not all bad, but it has to be curated.” — Host
Physical fatigue reduces mental bandwidth for market perception
- Jared notes that when the body is tired, the brain’s capacity to process market information shrinks, leading to poorer decisions.
- Fatigue also amplifies emotional responses, making traders more reactive.
- Maintaining good sleep, nutrition, and exercise is therefore a core component of trading psychology.
Quote
01:55:56“When emotions are overactive, you lose access to that stuff.” — Jared Tendler
Quote
01:55:58“The deeper instinctive unconscious competence can never go away.” — Jared Tendler
Gradual exposure to stress builds resilience and expands the tolerance window
- Jared describes acclimating to market pressure much like altitude training: start with short, intense sessions and increase duration.
- This exposure strengthens the emotional control center, preventing the shutdown described earlier.
- The process mirrors athletic training, where repeated stress leads to adaptation and higher performance under pressure.
Quote
01:58:20“Acclimating to stress improves performance.” — Jared Tendler
Quote
01:59:05“Take a break, go outside, not looking at phone.” — Host
Dopamine, Motivation, and Attention Management
Dopamine fuels motivation but can become a depleted resource when over-stimulated by social media, leading to tolerance and emotional volatility.
Dopamine drives motivation; over‑use via social media depletes the resource
- The host explains dopamine as a hormone linked to achievement and reward.
- Constant social‑media hits drain dopamine stores, creating a tolerance that demands larger stimuli to feel motivated.
- This depletion manifests as heightened emotional volatility and reduced focus during trading.
Quote
01:00:45“Dopamine is a hormone for motivation where when you achieve something meaningful you get a dopamine hit.” — Host
Quote
01:01:13“We need to treat dopamine as a resource that can be depleted.” — Host
Managing dopamine through purposeful breaks restores focus
- Short, intentional breaks (standing, breathing, looking away) allow dopamine levels to normalize.
- Reducing screen time prevents the need for ever‑larger hits, keeping emotional responses in check.
- Over time, this habit improves sustained attention and decision quality.
Quote
01:02:07“Take breaks every 15 minutes, stand up, take a few deep breaths, look outside.” — Host
Quote
01:02:33“It's not all bad, but it has to be curated.” — Host
Tolerance to dopamine leads to a cycle of bigger hits and greater emotional volatility
- Jared points out that as dopamine reserves dwindle, traders chase larger stimuli (e.g., riskier trades) to feel the same motivation.
- This creates a feedback loop where emotional intensity escalates, increasing the likelihood of impulsive decisions.
- Recognizing and breaking this loop is essential for stable performance.
Quote
01:01:45“We need bigger hits, tolerance builds.” — Host
Quote
01:01:50“Your system doesn't have a chance to replenish.” — Host
⚙ Agent-readable JSON index — click to expand
{ "memcast_version": "0.1", "episode": { "id": "UY1Nx35JnEM", "title": "The Man Who Cracked Trading Psychology - Jared Tendler", "podcast": "Titans Of Tomorrow", "guest": "Jared Tendler", "host": "Host", "source_url": "https://www.youtube.com/watch?v=UY1Nx35JnEM", "duration_minutes": 88 }, "concepts": [ { "id": "emotion-balance-and-optimal-arousal", "title": "Emotion Balance and Optimal Arousal", "tags": [ "trader-mindset", "emotional-arousal", "high-performance" ] }, { "id": "faulty-perspectives-biases-and-their-impact", "title": "Faulty Perspectives, Biases, and Their Impact", "tags": [ "cognitive-biases" ] }, { "id": "evolutionary-roots-of-trading-emotions", "title": "Evolutionary Roots of Trading Emotions", "tags": [ "evolutionary-psychology", "trader-mindset" ] }, { "id": "distinguishing-real-intuition-from-emotional-intuition", "title": "Distinguishing Real Intuition from Emotional Intuition", "tags": [ "decision‑framework", "intuition", "emotional-arousal" ] }, { "id": "social-media-s-influence-on-trading-psychology", "title": "Social Media’s Influence on Trading Psychology", "tags": [ "social-media", "dopamine" ] }, { "id": "confidence-overconfidence-and-illusion-of-control", "title": "Confidence, Overconfidence, and Illusion of Control", "tags": [ "confidence" ] }, { "id": "stoicism-and-psychological-training-tools", "title": "Stoicism and Psychological Training Tools", "tags": [ "mental-training" ] }, { "id": "risk-management-position-sizing-and-system-alignment", "title": "Risk Management, Position Sizing, and System Alignment", "tags": [ "risk‑management", "ai-alignment", "position-sizing" ] }, { "id": "prop-firms-discipline-vs-gambling", "title": "Prop Firms: Discipline vs Gambling", "tags": [ "prop-firms", "discipline" ] }, { "id": "alignment-of-temperament-personality-and-trading-system", "title": "Alignment of Temperament, Personality, and Trading System", "tags": [] }, { "id": "breaks-physical-health-and-cognitive-performance", "title": "Breaks, Physical Health, and Cognitive Performance", "tags": [] }, { "id": "dopamine-motivation-and-attention-management", "title": "Dopamine, Motivation, and Attention Management", "tags": [ "dopamine", "attention", "motivation" ] } ] }