A popular market breadth indicator, the McClellan oscillator is one of the tools that MoneyShow's To...
Trading by Using Neuro-Linguistic Programming
05/09/2013 11:00 am EST
In this edition of the podcast, Rob Booker interviews 14-year veteran trader Scott Hines of Australia, who uses neuro-linguistic programming (or NLP), which helps to influence one’s emotional and psychological state, or assists in replacing negative behaviors with more positive ones. They discuss specific uses for NLP, such as where a trader struggles with fear every time a trade goes into profit. Scott also discusses the concept of “anchors,” which are physical or sensory inputs that act as a catalyst for an automatic or instinctive reaction—or in other words—something that serves as a trigger for making a person feel or behave a certain way (and this can be positive or negative).
Play in Windows Media format
Play in RealPlayer format
Play mp3 stream
Direct link to mp3 file
Jason Pyles: You are listening to the Trader’s Podcast. This is Episode 140. During this show, you’ll hear Rob Booker talking to Scott Hines, a 14-year veteran trader from Down Under, who uses neuro-linguistic programming, or NLP to assist him with his trading. It’s great stuff.
Rob Booker: Hi, Scott.
Scott Hines: Okay, Rob, how are you?
Rob Booker: Good. What’s happening in Australia?
Scott Hines: Man, it’s nighttime, so not a lot. It’s pretty quiet here, actually.
Rob Booker: For our listeners, remind us all where you live in Australia.
Scott Hines: I live in the middle part of; well, how do you explain it? How do you explain it properly? I live at the very top of Victoria, so way out in the boon doggies, basically; in the middle of nowhere.
Rob Booker: So, in the southern part of Australia, toward the western part of the country. Would that be right?
Scott Hines: Yeah, that’d be right. Yeah.
Rob Booker: And in the boon doggies; Jason, are you familiar with the boon doggies?
Jason Pyles: I’ve been there, Rob Booker, a couple of times.
Rob Booker: I’ve been there for the last week or so. Scott, how long have you been trading?
Scott Hines: About 13 or 14 years now.
Rob Booker: Oh, my gosh! I’ve known you, but I didn’t know it was that long.
Scott Hines: Yeah, yeah; quite a long time, not full-time. Obviously, I’ve done some other things at various times, so I haven’t been trading full-time that entire time, but I’ve been trading full on for about the last maybe two or three years.
Rob Booker: Okay. And you live in interesting circumstances, and I don’t want to phrase it incorrectly, but tell us a little bit about how you live, not just where you live.
Scott Hines: In what regard?
Rob Booker: Well, you have a unique lifestyle in that you cool your house with a concrete floor, for example.
Scott Hines: Yeah, yeah.
Rob Booker: And you are a beekeeper, for example.
Scott Hines: Absolutely. We do live a little different, I guess. We like to live fairly sustainably. What that means is basically we like to have as minimal impact as we can on the environment. We’re certainly not hippies or anything like that, but by the same token we’re just interested in being smart about how we live; that’s probably the most accurate way of describing it.
Rob Booker: You grow some of your own food, correct?
Scott Hines: Absolutely, yeah, we grow probably I’d say about 80% of our food, which is really good, and we’ve only got what I would term a fairly standard size block, residential block in Australia, so we certainly don’t have acres and acres of land.
NEXT PAGE: What is Neuro-Linguistic Programming?|pagebreak|
Rob Booker: It’s interesting to me to hear you say that, because I had no idea that you could raise pretty much 80% of what you consume, because I’ve seen pictures of your house, which hopefully we can share with the listeners, and it doesn’t appear to be large enough to sustain the food needs of a small child, let alone. How do you do it? You can grow vegetables, and fruits, and what to you do?
Scott Hines: Vegetables mainly. I mean, we could go 100% if we really wanted to grow things like potatoes and all that sort of thing, but really there’s no point. I mean, they’re so cheap, why bother? You know what I’m saying? We just grow as much as we can that, I guess, the things that we like that we can’t buy in the store at the end of the day. What we basically do is have raised garden beds and go nuts, and just plant all the stuff that we want to eat. You’ve got to keep a pretty close eye on what you’re doing. It’s a bit like trading in that regard. You’ve got to plan your crops. Look, it’s pretty easy. I think anyone can do it if they put a little bit of time and a little bit of thought in. It’s not rocket science.
Rob Booker: It seems like rocket science to me, to live sustainably, but it also to me seems really appealing. Jason, do you feel the same way, or do you think that it’s better live close to a grocery store?
Jason Pyles: Well, I hate to confess this, Rob Booker, but I do like Cap’n Crunch and things like that, so it’s terrible, but yeah, my wife is really into that and I need to be more into that. You’ve been inspiring me with your juicing, too, Rob.
Rob Booker: Oh, thank you. For those of you listening to the podcast from outside the United States, Cap’n Crunch is essentially toxic waste material mixed with refined sugar and placed into a cereal bowl and consumed with milk as a morning treat for small children and Jason Pyles, and the producer. Our producer is powered by Cap’n Crunch. Scott, that’s a little bit about your living arrangements, which I find to be, they’re inspiring to say the least, when I look at pictures of your home. I really am inspired by your ability to consume less and make a smaller footprint on the environment as you live comfortably. Now I want to talk about your trading. You and I had a conversation two or three weeks ago.
Scott Hines: Absolutely, yeah.
Rob Booker: And, during that conversation, you mentioned that you had; and I’m going to try to phrase this correctly, but if I get it wrong, please correct me, that you’ve used neuro-linguistic programming techniques, or you’ve had some exposure to that with respect to your trading. Could you maybe explain, before I’ve gotten all that wrong, what is neuro linguistic programming, to begin with?
Scott Hines: Yeah, definitely. Look, it’s a pretty fancy word that basically means neuro-linguistic programming. Essentially, it’s obviously, the first part neuro; it’s about processing the experience, like the everyday experience or experiences through our senses, which you know what they are and we don’t need to go through that. Linguistic is obviously just the language that we use, which gives our experience meaning. That can be like pitches, sounds, feelings, smells, self-talk; all that sort of thing. Programming is the last part, and it’s essentially how we communicate with ourselves, so that’s probably the short thing. What it’s good for is basically, I guess it can help you to be more successful. It can help you to influence your emotional and psychological states, and that’s really important with respect to trading. It can also replace your negative behaviors with more positive ones, or more positive habits, for example. Obviously, another massive one that’s massive for trading. Look, it can do an entire range of things. It’s a bit like how do you fit an elephant in a box with respect to NLP? You can’t. It’s too big. We could talk about NLP for the next three days. It is such a massive, massive subject, so we might have to sort of focus in on a particular area, I guess.
NEXT PAGE: Ways to Use NLP in Trading|pagebreak|
Rob Booker: Okay. Well, I’ll help with that. By the way, I am sitting in the parking lot of a Whole Foods Grocery Store, which is an all natural, semi-organic grocery market in the United States. I could live here for three days, if you want to talk about it for that long.
Scott Hines: Well, we could. We could definitely talk about it that long. It wouldn’t bother me, but, yeah.
Rob Booker: Let me give you an example. I talked to a trader recently; and this is a typical problem, and it seems to be coming up more and more as I travel across the country. I talked to a trader who struggles mightily with fear every time a trade goes into a profit, whereas they know that they should be holding on for a profit target, which they planned originally. They find themselves exiting at different points along the way when they see something that “frightens” them or scares them, or worries them, that something has gone wrong and that it will turn around against them. Is NLP applicable or effective, in your opinion, in helping a trader that struggles with that kind of an obstacle?
Scott Hines: Absolutely. Yeah. Absolutely. I mean, you could eliminate that pattern, basically, I mean, or you could rewrite that pattern, or you could turn it on its head. I mean, the guy has probably got tons of anchors which, to explain quickly; an anchor is something that you, well, it’s an anchor. It’s something that you see something, or you hear something, or you smell something, or you taste something, or someone looks at you a certain way or says something, and bam, you go to a place that you want to be or you don’t want to be. Do you know what I mean?
Rob Booker: Right. It’s a physical or sensory input which is a catalyst for some kind of an automatic or instinctual reaction.
Scott Hines: Yeah, exactly. We’ve got patterns for everything. We’ve got patterns for how we wake up, how we trade, how we procrastinate, how we go to sleep, how we fall in love; I mean, we’ve got patterns for everything. Do you know what I mean?
Rob Booker: So, are you saying, let’s take this; this is really good, Scott. Are you saying that it’s possible that this individual who becomes frightened when they see things on the screen related to their trade. Are you saying that there are possible anchors, or physical, or sensory stimuli that this person is experiencing?
Scott Hines: Oh, absolutely!
Rob Booker: That is possibly causing this to happen?
Scott Hines: Yes. Without a doubt, without a doubt, Rob. It’s quite easy to change once you know what those things are. Do you know what I mean? It’s hard to do that without actually speaking to that person and getting inside their head. Do you know what I mean? I mean, for example.
Rob Booker: Yeah, give me an example. For an example…
Scott Hines: Well, example, I guess an exercise to change a particular behavior. I worked with someone recently who had a problem with public speaking, right? I asked them basically, I elicited his script for what was going through his head, and essentially this particular person was having a problem speaking in public, the sequence of mental actions that were going through his head were he saw the audience. He imagined they were staring at him. He heard them criticizing him. He felt tense and butterfly sensations in his stomach, for example. He called that sensation fear. As a result, he felt fear. Right? Now, through various techniques, which there are many techniques in NLP; I mean, that’s the three-day discussion. We basically helped him rewrite that little script. It basically went; we got him to see the audience. We got him to imagine them smiling at him, hear them giving him words of encouragement, for example. We wanted him to feel tense and have butterflies in his stomach, but we wanted him to call that excitement instead of fear.
NEXT PAGE: What’s an Anchor?|pagebreak|
Rob Booker: It sounds like you’re rewriting some of the interpretations of the sensory and physical input or you’re recreating brand new sensory and physical inputs and then writing an interpretation for that as well.
Scott Hines: Associations. Absolutely. The thing with life, and it’s so hard not to make associations. I mean, you’re constantly bombarded with things. It’s very easy to make the wrong association about something. It’s far harder to make the right association often because you’ve got so much data coming in all the time that your brain is just working to delete stuff that it thinks is irrelevant, and that’s the thing; that it thinks is irrelevant, not necessarily what you think is irrelevant or not necessarily what you want it to think is relevant. It can be a struggle at times. It can be a struggle, definitely.
Rob Booker: How can someone get more information about NLP? Where? So, someone listening to the podcast, “I’ve got it. NLP is, at least in part, the rewriting of the interpretations we make about the sensory and physical input we receive from the world, or it is the recreation of that sensory and physical input to be interpreted for success.” Let’s just give one more example before we go down that road.
I’ve had an anchor my whole, well, not my whole life, but I read a book about NLP when I was 13 years old. I didn’t understand all of it. It seemed a little bit over my head. I read in this book that I could attribute something, like I could pinch my thumb or wipe my brow, or pull a hair out of my head, or I could associate some kind of physical thing that I could do to myself and I could associate that with a state of mind. I wanted to associate it with absolute excitement and just pure joy. Every time I found myself, over the next; this sounds insane, over the next three years, every time I found myself laughing hysterically with my friends. You know, when you’re a teenager and you’re just crying and you’re laughing so hard, and you’re just rolling, and your friends and you are just having the most amazing time. I would do this physical pinching; I’m not going to tell you what it is. It’s like my little thing. I would do that. Now, if I’m just about to speak, or if I’m just about to do something about which I’m nervous, I will still go back to that, and my state immediately changes when I do that. It’s like tricking your physiological being to remember what it’s like to be in a certain state of mind, which is really, really effective for a situation that you find yourself in.
Scott Hines: You’ve created a positive anchor there. That’s exactly what it’s about. I mean, it’s not that hard, really. You just have to be incredibly, I guess you have to be intense about it. If you want to associate something, well, actually, you probably don’t need to be that intense about it, because if you do something often enough, it doesn’t matter how intense you are, you’re going to form an association or you’re going to form an anchor with that. Do you know what I mean? So, you could jam your finger in the door every time you close the door. Pretty soon, you don’t want to open the door or close the door because you know you’re going to jam your finger in the door, right? Totally not related to trading, but anchors aren’t that hard to set. I mean, I’ve got one myself that I do as well. I’ve got a couple of anchors that I use. One, well, one I’ll tell you about another time, it’s related to dating, and it’s quite funny, but it basically sets you in a positive frame of mind, and gets results.
Rob Booker: I’m now sure that every male listener of the podcast has forgotten everything else that we just said and wants you to talk about that.
NEXT PAGE: How to Use the Anchor|pagebreak|
Scott Hines: Probably.
Rob Booker: But, we’re not going to do it.
Scott Hines: We’re not. Look, another anchor, another positive anchor that I said is obviously coming in to trade every day. obviously, one of those things I do is I basically; I used to feel a bit of tension, I guess, in my solar plexus. That’s probably the easiest way to describe it. I felt that uhhh, that oh, I don’t know about this kind of feeling, where now I created this anchor where I basically, I come in, I stand up, put myself in a peak state, so I put myself in a, you know I stand like I’m unstoppable, like the Hulk basically, you know, and I pretty much just, you know, tap my chest, tap my solar plexus and flick my fingers out. Okay? So, I’m actually standing up, doing this now, would you believe? And what that does, is it gets rid of the nervous energy now. I just have to do it once and I’m in a good place. Essentially, what I was imaging to create that anchor was, that’s where all the nervous energy is. I’m basically, every time I tap that I basically put that in my hands, and then I flick it away. Right? It sounds weird, but it actually works.
Rob Booker: To give some perspective here, I’ll say two things. One is I had a little bit of crisis to attend to this morning before the podcast, and I’m sitting in the parking lot of a grocery store, and there were a few things that went really wrong really fast, and I thought, oh gosh, I’m in trouble. You know? It’s so interesting we’re having this conversation on this day, because I did that little anchor thing, and I found myself, but I’m faking it or whatever, but I’m just happy to talk to you. I’ve still got these other problems I’ve got to work through in the next little while, but I was able to get through this thing that’s important to me.
Number two, every time I’ve ever heard one particular song; if I ever hear the song, it’s a song by REO Speedwagon and it’s from 1984 or whatever. I hear that song, which I haven’t heard in, I can’t fight this feeling any longer, that song? I remember every single moment of dancing with Carrie Fowers when I was in eighth grade at the junior high school dance at the roller skating rink, and I can remember what she smelled like. You know? Everything. And that’s an anchor. It makes you feel a certain way. When you feel a certain way, you’re more likely to act a certain way in congruence with those feelings. NLP is this way to program more what I would call productive ways of thinking and feeling to get through the things that are most important to you in your life. Let’s go back to that thought, because I’m sure by now listeners of the podcast are thinking, “Where do I go, Scott, to learn more about this?” Have you written something about this with respect to trading, or is there a book that you can recommend?
Scott Hines: Look, I’m currently working on a few things at the moment, so yes; I am in the process of writing something. You can head over to, now you’ll have to check this website out, Rob. It’s with regard to what we were having a chat about the other weeks. It’s FatBeeTrader. It’s kind of quirky.
NEXT PAGE: Find Out More About NLP|pagebreak|
Rob Booker: So, what is it?
Scott Hines: It’s called FatBeeTrader.com.
Rob Booker: Spell that out for us.
Scott Hines: F-A-T-B-E-E-T-R-A-D-E-R.com
Rob Booker: Oh, I’m loving this already.
Scott Hines: Yep, so FatBeeTrader. Basically, they can just put the details in and when I’ve got that out, I’ll shoot that out to them. I’m actually thinking that I’ll probably do a few exercises where we might do something like a few NLP things that I can record and maybe shoot out to people, where they can actually then use that and apply that for more success in trading.
Rob Booker: You know what? We may hurry you along to get that done, so that when this podcast episode is ready, traders could go right from Traders Podcast.com, click on over there, and even if there’s just one thing they could download. I’m now bookmarking this website. I can’t wait to see it. Jason, what do you think?
Jason Pyles: I’m very interested in this. This sounds extremely useful; seriously.
Scott Hines: Absolutely. There are plenty of other books. There are plenty of other books that they can check out in the meantime. Look, anything like Bandler or Grinder, who are the original founders of NLP. Some of this stuff is a bit eccentric, but you know, yeah. Frogs into Princes is a good book they could check out.
Rob Booker: Oh really? I’ve never heard of that.
Scott Hines: Yeah, that’s quite good.
Rob Booker: Okay, we’ll check those out. Scott, I appreciate you staying up really late, in the middle of the night, to talk to us.
Scott Hines: No worries. It is pretty late here. It’s two in the morning or something.
Rob Booker: Oh man.
Scott Hines: Actually, it’s three, quarter to three.
Rob Booker: And that’s Jason Pyles, the producer. Jason, thanks for recording this spectacularly interesting episode.
Jason Pyles: My pleasure.
Rob Booker: On behalf of my good friend, Scott Hines in Australia, you’re listening to the Traders Podcast.
For more podcasts from Rob Booker, visit Traderspodcast.com. You can also follow him on Twitter @traderspodcast.
Editor’s Note: Beginning with this issue, we would like to extend a warm welcome to veteran trader, Rob Booker, who will be providing useful, insightful, and entertaining interviews with top traders on the joys and challenges of trading.
Related Articles on TRADING
While fundamentalists delve into economic and financial data to analyze the market, technicians emp...
Being able to determine market direction is a trader’s most important skill, writes Markus He...
Markus Heitkoetter discusses reward/risk ratios and winning percentage, and why determining the dir...