› Learning to think like traders.

Learning to think like traders.

29.05.2019, 12:45

Do you know the situation when you feel that you have the potential to become a profitable trader, sitting deep inside waiting for when they will be used?

You know that you are capable of this and are making the most careful efforts but without success. Losses replace profit, the market then gives you money, then takes everything away, even with interest. You spend money and time, but do not achieve success, although you are still sure that it is possible.

You are probably missing something important, but what could it be?

I can assume that no one warned you that a certain mindset is required for successful trading. Either you decided that trading psychology is not your problem area and therefore uninteresting. Many people prefer to think that success in trading is achieved by hard work, willingness to learn while maintaining a winning attitude.They think that having all these qualities will easily begin to win in the stock market.

When losses begin, such traders do not give up and decide that this is part of the educational process. Also, they will pass this stage with their heads held high, because they are confident in their abilities and knowledge. It is just a matter of time.Weeks, months, and even years pass, and the results still show no signs of progress toward which they aspire.

Trading on the stock exchange did not bring consistently profitable results. The soil leaves from under feet at the most inappropriate moment. The rules are violated, followed by repentance, and so on in a vicious circle. The results of trading remain inconsistent, with all the knowledge that the trader has and his desire to win.

Sounds familiar? I think, yes.

The feeling that above you is a glass ceiling that does not allow the potential to open. And no installation to win can not pierce it.The question arises - so what is our weak point, limiting progress? How to unleash your abilities to the fullest?

Success in trading

One of the revelations for the trader is the understanding that the laws of success, useful for other undertakings, do not work in trading. Thinking trader involves a completely different installation and a different way of thinking.

Such components necessary for a winning attitude, such as visualization of a successful outcome, positive mental attitudes, perseverance, willpower and concentration on winning, do not apply to trading.

If they work well in life, then why aren't they effective in trading?

The answer is in the illusion of control.

Our brain was formed in ancient times. It is designed to control the environment and the consequences of being in constant danger - the attack of wild animals, hunger and so on. The man had to survive, here and now. For the sake of survival, our brain learned to make decisions at the speed of lightning. In those days, nobody thought about psychological discomfort, because the world was full of dangers that put lives at risk.

When a successful solution for survival was found, it became a template that automatically turned on in the head, without thinking. The response to the danger should have been quick, and thinking takes too much time. In prehistoric times, it worked perfectly for survival. And the instinct of self-preservation has become the default program, which is launched under the influence of stress. The modern trader does not need to survive in the literal sense of the word. But, entering the stock market, it plunges into uncertainty, it causes stress, and the brain instantly includes a program that has been worked out for thousands of years.

This program is part of our emotional intelligence (as opposed to rational), and it does not make a distinction between biological threat and psychological discomfort. For him, any uncertainty is dangerous, because it is not under his control. Lack of control means only one thing - a threat to biological existence. The instinct of self-preservation is included in the brain in a nanosecond. The brain aims at survival here and now and does not value long-term gain. With this, the trader meets every day.

When you cannot decide to enter a trade, emotional intelligence celebrates victory. He repelled the danger. No entry, no risk of losing money. If you are in a deal, and it moves against you, the brain regards it as an attack and again puts survival on the scales. For him, your life is in danger. He does not want to wait for the deal to unfold, he wants to save you. You, as a trader, do not want to go ahead of time and miss the benefits. But, if you do this, emotional intelligence will again celebrate the victory and fix this pattern in your head.

The emotional mind is always opposed to the rational. If you do not learn to control this innate tendency to instinctive actions, emotions will always prevail over rationality. Emotions interfere with any thinking and oppose attempts to include logic and reason. Until you understand how to work with emotional intelligence, thinking with which you enter the stock market will never meet the needs of trading.

Work on emotions

Emotions affect the quality of the thinking process under the influence of stress. And trading or active investing (anything that involves uncertainty or risk) triggers a stress response that activates the survival instinct for emotional intelligence. One must learn to work with the emotional brain in such a way that it distinguishes between psychological stress and a biological threat. It can be trained so that it reacts differently to uncertainty in trading.

Learning to think like traders.


The emotional brain is our partner (whether we like it or not), but not our advisor. We will have to learn how to regulate emotions so that we can control their intensity. Without this skill, emotions will continue to take you captive. I must say that you do not need to aim at liberation from emotions. It's impossible. It is enough to learn how to manage them. Even in prehistoric times, the emotional brain learned to identify uncertainty (remember that it really was a world full of dangers that really threatened a person’s physical existence) with either aggression or fear.

Every time you experience fear, anger, greed, or an impulse of persecution in trading, know that this is the most primitive program. The problem is that the world for which this solution was effective no longer exists. Nevertheless, it is necessary to appear on the horizon of uncertainty and risk, the instinct of self-preservation is connected, as if we still live in the dangerous world of our ancestors from the Stone Age. This is the default program in our heads, and with it we go out to trade. But you can change it. Remember that initially this pattern did not appear by itself, it was formed after repeated repetitions.

Another risk and uncertainty response

In addition to aggression and emotions based on anger and fear, there are many emotional programs in our brain. For example, discipline, courage, impartiality in the assessment and many others. Selecting the necessary, you can create a new program for the brain to respond to uncertainty and risk. As soon as you find yourself in an uncertain market environment, turn to these emotional programs, so you will create a new associative chain and a completely different brain response. By repeating this exercise, you will be able to supplant the previous reaction, replacing it with a more positive one.

Working on your emotions should start with an introduction to them, understanding how they act and how they affect us. Over time, you will learn to adjust the old emotional patterns that arise when trading. And this is a huge step towards the right thinking for the trader. Everything that is needed for this is inside us. It remains to get rid of the old survival program and take advantage of the enormous potential of our mind.


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