What Do You Know About The Market's Playbook Aimed At You

A rat with an electrode in its brain will run across an electrified grid to press a lever. It'll ignore food, ignore water, keep pressing until it collapses from exhaustion. That was Olds and Milner's experiment decades ago, wiring a rat's pleasure centre, the nucleus accumbens, straight to a lever.

Wolfram Schultz, a professor of neuroscience at Cambridge, ran the same idea on monkeys in the early 90s. Show a monkey a piece of apple and its dopamine neurons spike. Do it enough times that the monkey learns the apple is coming, and the spike disappears. The chemical isn't rewarding the apple. It's rewarding not knowing whether the apple is coming.

Dr Hans Breiter ran MRI scans on cocaine addicts anticipating a hit, then ran the same scans on healthy people anticipating a cash prize in a game. The same region lit up in both, at the same intensity. Uncertainty about a reward produces the identical signature whether the reward is cocaine or cash.

The chemical hit comes from the uncertainty itself. That finally explained something that never used to make sense to me: why someone who just won big at the pokies doesn't walk away.

What they're chasing is the seconds before they know the outcome, not a payout itself. So they feed the machine again, chasing the feeling, not the money.

Slot machine designers know this. Michael Shackleford has built a career on it. The music, the flashing lights, the near-miss sequencing on the spinning reels, all engineered to keep you in that window of not-knowing-yet.

Now imagine you're at your trading screens.
You put a trade on and there's a spike, the same spike as the monkey, the same spike as the addict, firing off the uncertainty of what happens next.

The moment you're in the trade that spike drops.
If the market isn't moving as you had anticipated you might decide to cover, exiting the trade. If this is evidence-based, it's the correct decision.

But once you're out of a trade, the itch of reward for uncertainty returns, and you're suddenly back in the market. You know this behaviour. We all do. In. Out. In. Out.

What exacerbates the problem is an 'identity' crisis. One that goes like this:

I'm not making money if I'm not in a trade.
I can't call myself a trader if I'm not trading right now.
I set this hour aside to trade, so I'd better use it.

Susquehanna's Todd Simkin put it plainly: "We're aware of the biases and mistakes we and others have and make and express in the marketplace, so we can capitalise on those of others." Read that again. The firms on the other side of your trade aren't guessing at what you'll do. They know the mechanism, and they price against it.

Once you know it too, the responses you have when in front of your screens do as well. Most people at the screens are predicting "this is about to roll over" or "I feel like the market's going to push higher from here." The better response is "what's the market doing to try and pull me in right now?"

It's a different game entirely. Like knowing a punch is coming versus getting caught cold. You still take the shot, but you're braced for it.

Playbook trade

Knowing the mechanism is your defence. It's also your opportunity, because the traders getting pulled in by anticipation are the same traders you can take the other side of.

Here's one I trade. After a sharp move up, there's always a group of traders sitting there disappointed they missed it. To them it's too late to trade the long side but the emotional 'sting' of missing out is so strong, the only resolution is to fade the move up.

So price rolls over. Not surprisingly, new shorts pile in. My idea is to buy for a short-covering rally. But not knowing 'when' to enter long can lead to multiple attempts to get long that all lose.

But it's a struggle to predict exactly when that pattern will appear for a reward to take place.

And it's this struggle amongst the chaos - whether at the pokies – or at the trading screens – that sends your dopamine neurons into overdrive – getting super active.

So if you've ever wondered why you took a trade for seemingly no reason? It turns out that stimulating your dopamine neurons is the root cause. It's medically proven. I'll show you.

A framework and trading playbook solve this. The scenario above repeats, and there's a repeatable approach to trading it, one that leaves nothing for the anticipation spike to hijack.

And even if the trade doesn't work, playbook trades are designed specifically to keep losses to papercuts so winners pay you far more.

In this scenario, the first entry is not at full size. If the idea isn't playing out right now, the exit is cheap and immediate. Only once the trade is proving out are there steps to add, and add again.

That's the maths behind it. The cost when you're wrong is small. The payout when you're right, especially once you've added, is much larger than that cost. So even across a couple of false starts before the idea actually plays out, you finish ahead.

There were twelve separate points of evidence behind this particular trade, twelve reasons stacked together that made it worth taking. Twelve points of evidence isn't a guarantee, but it compounds the odds in your favour.

How professional trading firms size trades

Traders can go nowhere, or even lose ground, simply from betting the same size on every trade. In professional poker nobody bets the same amount every hand. The bet size reflects how good the hand is.

Risking the same amount per trade intuitively feels like prudent risk management, but it's rare to see a successful trader use this approach. From Soros, Druckenmiller and Buffett - right down to intraday trading professionals - trading success or failure rests on adjusting trade size according to the odds of the trade opportunity.

This is why a repeatable framework built from repeatable trades matters. A playbook is like knowing every hand in poker before you're dealt one.

I placed my first trade over 25 years ago as a retail trader. Although I had some wins, overall I was a net losing trader. It took me a long time to work out that the wins weren't proof I'd turned a corner. A losing trader doesn't lose on every single trade. That's exactly what makes the cycle so hard to see from inside it. It took entering the industry to see the mechanism from the other side and recognise it for what it was.

There's an Australian anti-gambling campaign that nails the whole problem in five words: "You win some, you lose more." Every win keeps you coming back to the table. The losses are what actually pile up. And underneath most of that cycle isn't a psychology problem. It's a dopamine response firing on autopilot, the same one that keeps someone feeding a slot machine after they've already won.

The defence against it is a framework and playbook that does the bulk of the decision-making for you. Even when the urge to react to every tick is still there, it's no match for a framework and playbook that have already proven themselves in live markets.

Once you've traded them enough times with your own hands, the outcome becomes predictable. Not on the very next trade, but across the next run of them. Knowing that in advance is what makes the 'unnatural' choice the obvious one, because you already know how much better off it leaves you.

We're reward-seeking by nature, and whatever rewards you, you do more of. A repeatable framework and playbook becomes its own reward, which makes it your best defence against every counterintuitive trap the market sets. You stop acting on what you feel in the moment. You act on what you already know works, whether or not it feels right at the time.

When you're doing the right things well, the account looks after itself. P&L stops being the focus. At a professional firm, you often can't even see your running P&L while you trade. Deliberately. So there's nothing to check every thirty seconds, nothing to spike the same anticipation that got you into this in the first place.

Once you've watched that mechanism play out on your own screens, you can't unwatch it. See it again and it reinforces what you're seeing, so it becomes your unwavering belief.

Adam Fiske14 September 2025