Washed Out Neuroscientist on Why Prop Firms Are a Dopamine Death Trap
Ever wonder why tilt can get so bad when trading? Sometimes when the limbic system takes over it can feel as though you are no longer in the driver seat.
For those who dont know — I was (and still am at heart) a neuroscientist turned trader—although my studies primarily focused on inflammatory signaling in the brain (i.e. interleukins) I am still very familiar with these other pathways.
I spend a lot of time observing and thinking. I cant help it, it’s just how scientists are it doesnt go away when you leave a laboratory setting.
I have spent time thinking about tilt explicitly, how different brain regions are implicated etc. I’ve also brainstormed some ways as to break some of the feedback loops.
(also plz excuse my french in advance im a candid writer and a bit dostoevsky-esque in a way)
Say hello to the Mesolimbic Dopamine Pathway.
Anyone that has studied addiction in the brain knows, this is one of the most notorious pathways when it comes to dopamine regulation.
VTA / Hypothalamus will be big players here.
For those not familiar -- BF skinner designed these boxes to test operant conditioning.
In a study done by Olds and Milner in 1950s, they put a little electrode inside of the brain of mice, which stimulate reward pathways mice.
What they discovered was
Mice will literally press the lever to stimulate the reward center of their brains, while neglecting to eat and drink.
If this behavior can be modeled in mice, there is more than “you have a choice”
Due to how homeostatic regulation occurs it is not normal for an animal to neglect eating and drinking. It goes against evolutionary biology.
pmc.ncbi.nlm.nih.gov/articles/PMC3008353/
If you’re interested reading more about this experiment you can do so here.
What the fk does mice have to do with trading?
Glad you asked. (look guys I might be a lil rusty this is just shit off the top of my head)
Neuroscience made EZ by salti aka market mommy
Remember the VTA from earlier?
The amygdala and VTA creates a feedback loop. Bypassing the PFC where executive decisions are made.
This is a SURVIVAL mechanism.
So this design is to ensure survival when met with potential danger, that is why it feedback into the amygdala
Key things to notice here --
this is a pathway that is triggered by VISUAL stimulus.
Candle sticks are visual stimulus (wow geez)One pathway -- visual stimulus goes into your hypothalamus which sends projections to your amygdala, and then down into your brainstem/VTA.
This pathway bypasses your PFC (prefrontal cortex) -- where executive thinking lives.
In survival situations you dont have time to think. You just react.
When you activate this pathway you are now at the mercy of your autonomic nervous system.
Ok, so thats not an excuse to tilt to be clear, at the end of the day we still must hold ourselves accountable.
However— it is just one piece of the puzzle
If you want to learn regulation, you must put the puzzle pieces together correctly to build a system to override your autonomic nervous system.
Taking accountability doesn’t necessarily mean shaming or blaming yourself.
It means analyzing your behavior thru an OBJECTIVE LENS without assigning any bias.
Shame inducing strategies only encourage AVOIDANCE this has been proven in experimental studies.
Analyzing objectively, you can say hey I did this, I didnt like it. I dont feel good about it. OK now that part is over with.
Now you break down what led you to that path, and what are the early signs. In order to change a behavior associated with a feedback loop you must first understand the feedback loop and find out where you can interrupt it.
easier said than done.
Over activation of this specific pathway creates what I call the “dopamine deathtrap” It quite literally will rewire your neuronal pathways, and regulate the receptors on your neurons (via sequestering)
You are basically locked into multiple feedback loops, and every time its triggered it gets stronger.
This is one of the reasons relapse rates are so high. Your brain is literally telling you that youre going to fkn die.
The same way it tells you youre going to fkn die if you dont eat.
Addiction is one of the most heartbreaking topics for me, because I can understand it at such a molecular level, yet I am powerless in helping anyone due to how strong this pathway is. These people are already fighting a losing battle, and society comes to just dump more shame onto them.
The only thing shame does is induce avoidance.
What this does is actually build cognitive dissonance and usually you will find yourself doing the thing you are so desperately ashamed of and trying not to avoid. Shame is also a very very hard feeling to name. Something I have personally struggled with my entire life.
There are situations where I feel shame is deserved, for example, if you are intentionally exploiting others maliciously for your own gain, you deserve shame.
If you are just doing your thing, have a bad habit and cant figure out why youre doing it. Burying it with bullshit motivational quotes wont fix it. You need to design a biological system in order to regulate your autonomic nervous system response.
once you get to dorsal vagal state you are f*kd ( excuse my french )
Shame — hard feeling to name. Something I have personally struggled with my entire life as someone with ADHD
Sorry you’re not going to “get yourself out of a funk” once you hit dorsal vagal state.
Chronic fight / flight will send your neurons into a hyperaroused state of activation.
Your brain is biologically engineered to protect itself, over excitation of neurons causes cell death.
So what does your brain do to preserve itself? Shuts down.
This is why intentional nervous system regulation is SO important.
How Prop firms and any / all things gamified exploit this.
Whether or not they explicitly understand this mechanism, someone has, and that is why these gamified bullshits are all designed and marketed the same.
People have figured this out down to the specific colors, motions, and even smells in some cases, that will activate these pathways, in order to make more money from you.
TPT is actually one of the best designs in order to capitalize on max rev per person. This design is quite clever.
You look at it and to start it takes 5 days to pass the account. Store this for later.
Then you have payouts on the first day
These incentives you to chase.
However, you are at the mercy of an intraday drawdown. Which is quite clever, they get you to invest the 5 days with an EOD drawdown but switch it to intraday + same day payouts.
Statistically speaking, you’re already fighting a losing battle with an EOD, so ur most likely going to blow these up.
Your brain also elevates the value in these based off of the time component since you had to invest 5 days in it.
Ok so now add in the resets. Something like $799-$1499 to reset these accounts up to 3x.
So your brain, subconsciously now goes, well, ok if I do this, I wont have to spend 5 days to pass it again. This is a death trap.
They also activate the account right away after you reset it. Most likely youre going to blow it again, thats just the statistics. Emotional decisions never end well unless you get lucky
Next thing you know you spent $7000 resetting 2 pro accounts before you even realized
Although the affiliate money and commission is quite lucrative where people are making upwards of 50k a month.
see now why they say TPT is the “best” cuz they get that money when you bust all ur damn accounts
Unfortunately I do not support business that are predatory businesses that are designed to exploit people (unless they pay me alot of money I might consider I wont say I will never do this, because if someone offers me 2million dollars i’m def going to think about it u know what I mean).
So im here doing it the hard way. If you enjoyed my article and my posts and want to support a brokkie w no shill codes, you can go here to buy me a coffee
https://buymeacoffee.com/dbsalti
Great read!
Yes, this was brilliant. Thank you for taking the time you put into it . It is appalling they exploit the human dna and by no means is it coincidental . Straight out of the Slot Machine playbook