The Chimp Paradox and Trading

The Chimp Paradox, written by a leading UK sports psychologist Dr Steve Peters, is a simple yet incredibly powerful metaphor for the battle between the rational and emotional aspects of our minds. It is not a scientific theory, but rather helps a person make sense of how our emotional/intuitive mind affects and impacts our decision-making capabilities.

The ‘Chimp Paradox’ metaphor describes the brain as working in two modes, the chimp and the human mode. The chimp mode (inner chimp) is the area of the brain driven by feeling, sensing, impressions, emotional thinking and gut instincts. The chimp is intuitive, makes snap judgments, thinks in black and white, and is capable of being paranoid, irrational and emotive. Its primary motivator is survival.

On the other hand, the human part of the brain is rational, evidence-based, thinks in shades of grey, and operates on balanced judgement. The human part of the brain is driven by having a greater purpose in life rather than the pure survival instincts of the chimp. 

There is a third aspect to the metaphor, the computer within our brain. This computer, which had an empty hard drive at birth, is only as good as the information it contains and is limited by its operating system and hardware. The computer contains stored beliefs, some of which are positive, some negative, some deeply hard-wired and tough to change, and others easier to re-programme. 

Our personalities are formed by a combination of the chimp, the human and the computer, which both the chimp and the human refer to as their resource for their own respective reference points: All together they dictate how we think, feel, act and behave. 

Given the chimps emotionally driven nature, the assumption would be that it is far better for the human to be in charge at all times. However, life is not that simple, we cannot simply ignore or turn off our 'inner chimp'. This inner chimp is part of our nature, and as in real life, the chimp is far stronger than the human: You wouldn’t want to take on a chimp on in a fight? A chimp has 5 times the strength of the average human, and far more staying power. 

In reality we function by being in a constant interplay between the two, rather like a hybrid car switching between battery and gasoline. However, as mentioned, there will be times when our inner chimp, far stronger than our inner human, will take over. At these times, typically when we are not switched on, or tired, bored, disengaged, or perhaps triggered, anxious and fearful, our minds can be easily hijacked. When this happens, the chimp can run riot, and the consequences can be hugely destructive. 

It is when kept in balance and in check, that more effective decision-making and greater performance comes to the fore. It is by keeping the inner chimp calm, that you can do better work.

However, there is another level, even better than calming the chimp,and that is making the inner chimp your ally. I am sure you can recognize times in your lives or work, when you achieved great things almost effortlessly, you may have been 'in the zone', or 'in flow', that is a example of your inner human and inner chimp working in harmony. 

That is the 'Chimp Paradox': Your inner chimp has the power to be highly destructive, but can also be your greatest source or strength, helping you achieve incredible things, sometimes against all odds. 

Great Performers Learn to Tame their Inner Chimp

It is on the back of this metaphor that one can draw upon the success of outstanding performers in many fields, including great traders and investors. Master performers learn to tame their inner chimp and work with it in practical ways to harness its enormous powers of intuition, creativity and emotional strength. When combining the power of the chimp, and the logic and resourcefulness of the human, great things can be achieved. However, when fighting the inner chimp, surrendering to his simplistic ways, or attempting to placate him, we can undermine our own development and growth.

The full title of his book is 'The Chimp Paradox: The Acclaimed Mind Management Programme to Help You Achieve Success, Confidence and Happiness'. You can find details of the Chimp Paradox and other books on Trader Mindset at our book's page here.

Steve Peters provides an excellent TedTalk which can be seen below, or at this link here

The AlphaMind Podcast

The AlphaMind podcast is co-hosted by Steven Goldstein and Mark Randall, market veterans with over seven decades between them in the financial markets. The podcast delves into the lives and stories of extraordinary guests whose experiences provide a fresh and powerful lens through which to understand the mental, emotional, psychological and behavioural challenges people face when encountering risk and uncertainty in financial markets. To find out more visit the AlphaMind podcast website

The AlphaMind Podcast is produced in partnership with 'The Society of Technical Analysts'.

The AlphaMind Trader Performance Coaching Programme

Our powerful Trader Performance Coaching Programme focuses on helping people develop and improve the key risk skills, abilities and mindsets which contribute to trading performance mastery.

This programme makes use of our unique and powerful ‘Human Alpha Performance Model’ which helps illuminate the human aspects of the risk process as people navigate their way through the Financial Markets. The model helps people make sense of their behaviours when taking and managing risk in the financial markets, whilst the coaching helps people to make key changes and adjustments which drives growth in risk capability and personal performance.

This programme has been delivered over the past 10 years to people at many of the world’s leading trading and investment firms.

Click here to find our more about the programme, or email or

AlphaMind is a collaborative project between Steven Goldstein of AlphaRCubed Ltd and Mark Randall of The Mark Randall Consultancy. 

Join the flourishing LinkedIn Group ' Behavioural Trading'. and follow me on Twitter.