Identity: The Key to Massive Transformation

Every Tuesday Chuck releases a new Trader Tip video on YouTube. This week we will discuss The Behavioral Pyramid and Identity. The behavioral pyramid is very interesting because it's actually a pyramid that is able to predict your behaviors, your actions, and your potential for future success. Learn how your understanding of your identity can be transformative.

You can read the episode transcript below or watch the video that follows.
If you have any questions, please reach out to us. We look forward to being a continued part of your trading education!

Today we're gonna talk about the power of identity, and how identity is the key to massive transformation in your life. Now, to start off, we're going to talk about the behavioral pyramid. The behavioral pyramid is very interesting, because it's actually a pyramid that is able to predict your behaviors, and your actions, and your potential for future success. When we look at the pyramid, there are six levels in this pyramid. At the foundation of the pyramid, we have identity, then we have values, and we have beliefs. We have thoughts, emotions, and actions. This is like a hierarchy of how to think about what contributes, not only to our behaviors, but to our successes. Let's go through here and talk about this.

First of all, we're going to start from the foundation and build up, with identity. Identity is how you think of yourself. If we look at the definition from dictionary.com, we see that it's the sense of self, providing sameness and continuity in personality over time. Your identity is your sense of self, and it gives you the consistency, to be able to compare other things in the world relative to you. With no sense of identity, you're like a rudderless ship just floating around in the ocean. But your identity grounds you, it gives you the foundation for how to evaluate everything else. If you just think about if, it's the foundation, if it's what grounds you to be able to perceive everything else, you can see why it is so important.

The next level up from identities values. Values really reflect your identity, and they're a derivative, your values are a derivative of your identity.

Then we go to beliefs, and beliefs are a reflection of your identity and your values. Your beliefs are really how you protect how you manifest and how you realize your identity and your values.

Then we have your thoughts. Thoughts are a thought pattern, and your thought patterns are driven by your beliefs. So it's really interesting, because if I know your beliefs, I can actually predict your thoughts. So like, for example, one of the hot topics this week has been abortion. If I know your beliefs about abortion, I know what your thoughts are gonna be. It's gonna be really easy.

Now, your emotions are driven by your thoughts. So your thoughts invoke different emotions. Some thoughts invoke happy and positive emotions like happiness, ecstasy, excitement. Where other thoughts evoke negative emotions like anger, jealousy, lethargy/being lethargic, laziness.

Then from our emotions, our emotions lead us to our actions, and our actions are a reflection of our thoughts and our emotions. However, the more emotional you are, the more likely you are to take action. That's why one of the things that's incredibly important when you do goal setting is you need to make goal setting emotional, the more emotional you are in something, the more likely you are to take action.

This leads to a whole bunch of important topics, some of which are just beyond our Trader Tip Tuesday today, but one of the things I want you to notice is that with beliefs, your identity is like the thermostat in your house. See what it says again, the sense of self providing sameness and continuity. So if you set the thermostat in your house to 70 degrees, that is like your identity, your identity is 70 degrees. What's fascinating about this is when you have your identity, let's go to our house and look. If we let's say we go through and we attend a workshop and we learn a bunch of new concepts, we have our beliefs challenged, we embrace new beliefs, and out of that we have this excitement. Our new beliefs drive thoughts, emotions and actions and we start to take massive action. Then what we see is our temperature starts to rise. We go from 70 to 71, 72, 74, 75. So our temperature is rising relative to the thermostat, which is our identity. What's so fascinating about this is think about what happens in your house, if your thermostat set to 70, and the temperature in your house rises to 75, or 76. Eventually, what's going to happen is, the thermostat is going to kick on the air conditioner, and it's going to bring the temperature back down to 70. This is really important, because if you want to make meaningful change, changing your beliefs is not enough.

Changing your beliefs is like raising the temperature in the house. At some point that identity is going to take over and it's going to bring everything back down. So if we want to make change, we have to raise the temperature on the thermostat to get it to stick. We're going to talk about this a little bit here. But a good example is when people win the lottery. They don't really understand money, their identity in money is at one level, but now they have all this money coming in, which raises their temperature, but the thermostat is still down here. What ends up happening? The thermostat kicks in and everybody loses all their money. You go through most lottery winners end up losing all the money they win, because they go back to their identity. This is important because if you want to make meaningful change, changing your thoughts, if you want to consistently change your thoughts, if you want to change your beliefs, you have to do this at the identity level.

One other example of this: one of my favorite examples is you'll go through and you'll see somebody who says, I'm on a diet, and I haven't had sugar in 21 days. But they just told you whenever you hear somebody say that I've been on a diet or I quit smoking or I haven't had a drink or whatever X amount of days. They're telling you in their words that they have not changed their identity. They changed some of their behaviors, maybe even tried to change some of their beliefs, but they did not change their identity. So what they're telling you is it's just a matter of time until they go back to who they used to be.

Now think about it. If you are in great shape and you take care of yourself and you eat while every day and you go and you eat a piece of chocolate cake

You're like, "Oh, I blew it! Son of a bitch, dammit! No, because that's not your identity, your identity is your of somebody who's healthy. So you have chocolate cake, and, okay, you probably don't really like it, but maybe they'll have it and whatever, it's fine. The next day, you don't eat it. Just go back to being who you are. Somebody who's obese, who has eating issues, they'll go a period of time without eating a cake, but as soon as eat the cake, they feel like they screwed it up, and now we're going all the way back to where they came from. Eating the cake equals failure, and they go back. So they're beating themselves up about it. Somebody who has a healthy identity doesn't think this way. This is important to understand.

I want to share with you quickly they Have, Do, Be Principle because this really ties in to the identity. Most people in society have this belief that if they could have certain things, it would change your life. If they could have certain things they would have happiness and everything would shift. If they had a new car, if they had a hot wife, or a wealthy husband or something like that, it was going to bring them status, and security, that would fix all their problems. If they had a million dollars, if they had $10 million, if they had a new house, if they had a better body, if they had a gym membership, if they got new clothes, they could go on this vacation, whatever it is, goes on and on and on, if they could just have a certain something in their mind, they believe it will bringing them happiness.

The reality of it is, is when this happens, it brings them happiness for a brief moment, a brief moment meaning a few hours, a few days, a few weeks, but then it fades and it's gone, and then they realize that nothing's changed. If they don't shift their thinking, they don't shift their behavior, what they'll do is they'll go on and what is the next thing I can have, that'll make me happy. It's really an empty belief set. People will realize this, so they'll say, "Well, I thought having a million dollars is gonna make me happy, but it did it. "

That takes us then to the "Do" which is: "Well having things didn't work. So maybe if I do certain things, if I live the disciplined life, my actions will bring me happiness. If I meditate every day, if I eat healthy, if I get up at 5am, If I work out, if I call my mom every day to check in on her." Things like this that's an action list: If I do A, if I do B, if I do C, I'll be happy. If I do do do do. What you find is that it gets exhausting. People are exhausted that they are still not happy.

The last concept is the "Be." The Be is a belief that if I act as if I am who I want to be I can create my own emotions in my mind which brings me the feeling I'm seeking. When we want to have something, what we have doesn't really matter what matters is the feeling we get from having. We think it's going to shift our feelings, make us feel differently, feel happy. Same thing with the doing, if I do certain things, it's going to make me feel happy.

We as humans are incredibly powerful, through the power of our subconscious mind, through the power of our imagination. The thing is, is everything that we wanted from the have or from the do we can instantly have in the Be. If we assume the identity, if we assume the posture, we assume the emotions we assume the behaviors of how somebody who had the identity that what we wanted, would behave. We can have this instantly. We can have it in our imagination and our mind. We can have it in a way we interact. This creates energy, like attracts like.

When you adopt the identity of whatever it is you want. Let's just say you want to adopt the identity of a multimillionaire so you would behave how a multimillionaire would behave. You start asking yourself the questions: How would a multimillionaire behave? How would they dress? When would they get up? Who would they hang out with? How would they take care of their body? What would they study? What would their work habits look like? All these sorts of things, rather than go out and assuming like, if you can do those things, you'll be happy, you start being happy now, and when that happened, you'll see is that the law of attraction kicks in, and everything will start coming to you in congruence with your identity.

One thing I didn't say about identity, by the way, so if you're at 70 degrees, I mentioned what happens if you start to raise your temperature, but the same thing happens if the temperature starts to drop, you go from 70, to 68, 66, 64. Well the heaters are gonna kick on, it's gonna raise the temperature back to 70. What's interesting about this, is maybe you lose your job, maybe your business goes under, maybe your girlfriend leaves you, maybe you get in an accident, or you have an injury, something like this happens, and as a result, your temperature in your thermostat falls. Well, if it gets too far away from your baseline identity of 70 degrees, your brain is going to kick in, and it's going to go, oh, not anymore, not another day, not another minute, I'm not going to allow this to happen. Come hell or high water, you'll find a way to make the money back, you'll find a way to get a new girlfriend, you'll find a way to take care of yourself, you'll find a way to rehab your injury. No matter what you will get back. Your drive, your force will be incredibly high to get you back to your identity.

This goes both ways. Think about it. If we have this massive change, when our temperature starts to drop, what if we could systematically raise the temperature on your thermostat? What if we could just be raising the temperature? You would massively change everything. That's what we're able to do. When we adopt the Be.

When I was in high school, my sophomore year, I was up and down on the varsity. We had a great team, and so I spent a lot of time on the JV team, but I knew, we had an all state point guard, and I knew that when the season ended, and we went to next year, I was going to be a junior and that was going to be my position. There was a junior, I was a sophomore, there was a junior on the team who barely played, I actually played more than him when I was up on the varsity, and when the season ended, we had a very brief offseason because we actually played year round for at our high school. We had a huge offseason in which we trained the whole time, then we came back to the season. When we came back to do our offseason work. His name was Johnny Young. Johnny walked into the gym, and he walked in, I'll never forget the moment he walked in the gym, everything about Johnny was different. He looked the same, like his body was the same, but he did not act the same. He acted differently. He acted like he was the best player in the gym. He was suddenly cocky, confident. He had a strut to him, and he walked in, he just owned a gym. Two weeks prior, three weeks prior, he was basically the last guy in the bench, but just like that, he just walked in and completely changed his demeanor, and Johnny went on to become first team all state in Florida and went on to great college career. Just out of nowhere. See change can occur instantaneously.

I want to talk about, I did an experiment. I've been training traders since I was 20 years old, and when I had my prop firm, kind of early on when I had my prop trading firm, I had all these guys I had trained prior to my prop trading firms. Some of them came into the firm with me. Some of them were outside the firm, but we decided to hold a bigger reunion. I had them all come in, and what didn't know is I had organized the room in a very specific way. When they came in, they had assignments. We were in a big conference room. There were people on the left. There were people on the right. Then I proceeded to give them this talk. Now one of the things they did is I went through and I looked and I said okay, I've got all of these traders who have made it. They all make a living trading. Some of them make a good living, some of them are rich. What is the difference? I went through and I started studying it, and I started looking at it. So what is the difference between these traders? When I organized the room what they didn't know is that people on the left, these are people that made $750,000-200,000 a year, which in the early 2000s was a lot of money. On the right, were my most successful traders, and in general, these guys all made a million dollars or more, these were guys that made 3, 4, or 5 million dollars on my right.

What was the difference? I came in ahead of talk and I asked him, I said, What is the difference between you two? All you guys make a living? But why does this guy make 150,000 and that guy make a million? It's because this guy's six times smarter, seven times smarter. No, their intelligence is the same. In fact, the guy making 150 grand may actually be smarter. Is it their work ethic? No, they both work hard. That's not it. If it's not their intelligence, it's not their work habits or the work ethic, what is it?

Here's what I noticed. The people on the left. Their dads are blue collar. Their dads were lower white collar. Their dads, their fathers owned small businesses, convenience stores, they tradesmen, they were plumbers, they were elevator repairman. They worked in MIS at United Airlines, things like this. They were hard working, but they had more what I would call basic jobs. People on the right, who had all the massive success, their dads or traders or uncles or traders or dads own successful big businesses. Their dads were the head of a marketing company, they were CEOs of Fortune 500 companies, they were high profile attorneys. There was a big difference in what the dads in one group were versus the dads and the other, and so what's so interesting about this is and I'm just talking from a male perspective, female has its own dynamic, which is similar, but from a male perspective, it's okay for us to do better than our fathers, but it's not okay for us to do massively better. If our dad made 75,000 a year for us to make 150. Totally makes sense, but not 10 million, but the guys on the right side whose dads were making a million dollars a year, they grew up in their identity of how they viewed themselves. They viewed themselves that they absolutely would make a million dollars themself, or more, maybe 2 million, maybe 5 million. Why? Because they grew up in it. They saw it every day, and they saw themselves having that same success. This is a huge thing. Huge. People on the left, they were pissed at me. Some of them didn't talk to me for like a month like, you know, Whitman screw you telling me that I'm a limited success because my dad was a plumber, screw you. That's not what I said.

The key here is understanding what is our identity, and when we have an awareness of what our identity is, we can change it. We can make massive change, but one thing I'll go back to , if you come up from a family that has not had financial success, and you are really financially successful, you need to understand, it's going to cause a lot of issues, a lot of issues for you, a lot of issues for your family. If you're in a family that nobody makes more $100,000 A year and you walk in and make 5 million 10 million 50 million. They won't know what to do with you. You're going to upset people, people are going to be jealous. They're going to make fun of you. They're not going to want to talk to you. It's going to take the whole dynamic. Some of them are going to be all over you wanting stuff from you. It's going to blow up the whole family dynamic. Most people don't think about this when they start making a lot of money. Are you ready to lose your family? Are you ready to lose your friends? Your whole peer group can walk away from you. Your family can just turn their back to you because you're successful. Most people like they start making money they never thought of this. This is important understand now people that came from the successful families. Nobody's going to outcast you because you've made a lot of money because everybody else makes a lot of money. Your peer group came up with the same expectation. You have that in common. They're not going to ostracize you. They might be jealous, but they're want the same thing you do. It's no problem. This is powerful. I hope you see this.

I want to take you through I'm a big believer in prodigies. Let's just look at some examples. Look at two of the greatest baseball players of all time, Barry Bonds and Ken Griffey, Jr. Well, Barry Bonds his father was Bobby Bonds, who was a great baseball player. Barry grew up watching Bobby. He grew up in the park, in the baseball parks. He grew up at the games, he grew up watching the best coaches, the best managers. He was in the mix of all of this and he believed that he was worthy of being one of the greatest ever. Because if he was just slightly better than his dad, he was already great. Same thing with Ken Griffey, Jr. Ken Griffey senior who was here on the right was a really good baseball player, and Ken Griffey Jr. grew up around that. In his mind, he was worthy of being one of the best ever.

Look at some other examples. I love this. This is the bloodline. This is the bloodline. This is the Matthews family. On the left, you have Clay Matthews, Clay Matthews the Second, and Clay Matthews the Third, all three of them played in the NFL, and then Clay had another brother Casey who also played the NFL. So Clay Matthews a Second had two sons that played in the NFL. Totally expected this. Not only that, but Clay Matthews who had Clay the Second also had Bruce. Bruce is in the NFL Hall of Fame, he is one of the greatest offensive linemen of all time, and Bruce had two sons that also went on to play in NFL, Jake and I think it's a Shane. The call them the bloodline because all of them play through, three generations playing NFL.

We have the Mannings. We have Archie with Eli and Peyton. Okay, Eli and Peyton grew up expecting to be NFL quarterbacks, not just NFL quarterbacks but great NFL quarterbacks. On the right, we have Patrick Mahomes. Patrick Mahomes father was a major league baseball pitcher for 11 years. Patrick grew up around professional sports, and he knew what was involved. Is it any wonder that he's debatably the top quarterback in the NFL? No, he was built for it.

Tonight the Golden State Warriors were on, my favorite team. If we go through we look at the Golden State Warriors. You have Dell Curry, who was a great shooter, six Man of the Year Award winner. This is his son Steph, the greatest shooter of all time, and his other son, Seth, who plays for the Brooklyn Nets who's also a great shooter. You go two great shooters, who's the sons of a shooter they grew up expecting to be great shooters. On the right, we have Michael Thompson, and Klay Thompson. Michael Thompson was a number one pick in the NBA draft and a really, really good NBA player. So his son Clay, he's going to be in the Hall of Fame. He's one of the three World Championships, and he's been a multi, all pro NBA player, and then we go through the same team. You want to know I go to state so good. We have Steph and Clay. Which also have Andrew Wiggins, whose dad Mitchell play in the NBA and whose mom was a silver medalist in sprinting in the Olympics, and there's Gary Payton the second who's the son of Gary Payton the NBA Hall of Fame point guard. All these guys grew up expecting to be great.

This brings us back to you. Just so you know I grew up, my family came from nothing. My family had great success at a young age. My parents built a multimillion dollar aviation business and sold it in their mid 30s. Basically could have retired, but four years later, my dad lost everything he had made. He lost a trade and he went through this cycle of make money and they lose it all. Okay, so I got the benefit of being able to be around them as they made all their money and I got to see how they did it, but I also have had to work through the demons I have seen my dad go broke, and I myself, even in spite of all the work I did, psychologically being aware of it, went through a similar thing, and never lost a trading, I lost it in other things which is really interesting.

For you, if you want to change, you have to do it at the identity level. This is where the massive change comes. It can happen in an instant, but it has to happen at the identity level. As it relates to trading, what is your identity as a trader? Then once you know your identity, what behaviors and habits would you have to exhibit if you embrace your identity? You can say what your identity is, but your identity shows up by how you behave, by how you carry yourself, by what you wear, by how you treat people, by when you get up and when you go to bed, and what do you do during the day. These things show your identity.

I had one of my students who gave this little talk to our students recently, it blew his mind, absolutely blew his mind, because he came from a really poor family, and he realized that he was putting limits on himself because of the identity he assumed from his parents, but hearing this talk was profoundly relieving to him. Because it made him realize he could be whatever he wanted. He didn't have to be bound to the story of his parents, that he had awareness of it.

Where are you at? Are you ready to really examine your identity and create the identity you want? It is everything. Check it out!

Today's Trader Tip Tuesday is longer than it usually is, but oh my gosh, identity is everything. I hope you can see this and think about what you can do to embrace the identity you've always wanted. Do it now. Stay tuned every Tuesday for additional webinars where I will teach you different ways to think about trading that will help you take your performance to an elite level. Thank you for tuning in and for the time, and I'll see you next week. God bless. Bye.