Trading Tricks Of The Mind
No matter how good at trading you are, there a times when your trading simply will not come off as you had expected.
You are out of sync with the markets and there is a danger that you might be "scratching round" for trades.
Perhaps you are hesitant because you don’t want to give the profits back after a good run.
Maybe your system is going through an unexpected lengthy period of drawdown? In these situations it is easy to become unsure of your abilities as a trader, your system, the markets, your technical analysis and indicators...
Your self talk is not the greatest either and might be along these lines:
"The COT report, fundamentals, everything ‘says’ it is going up but, I can’t handle the volatility, these markets are crap, maybe I put some options on, maybe I sell X when it gets up there, or, maybe not……hmm".
Sounds familiar ? You bet !
Our Conditioning
What is happening here? Well, put simply, you are thinking too much, but you knew that anyway!
On an average day we have around 60 000 thoughts, and the vast majority, 75% of those thoughts are negative for most of us. Add to this the fact that in every moment we take in 4 million pieces of information, which are stored somewhere in the subconscious mind, ready for recall, when appropriate, it becomes obvious that we are functioning on autopilot to a large extend.
In fact 95 % of our behaviour is subconscious, and this figure is even higher when we enter stressful situations, such as trading.
Early social conditioning by our parents and schooling adds to phenomenon. In fact, observed closely, most of our thinking and our habitual way of reacting is our own.
How can I make such a preposterous statement?
Let us take a quick look at how we learn. There are basically two ways:
By experience: For example you burn your fingers on a hot plate, you obviously don’t do it again.
By example: You are told by your parents to do certain things in certain ways, you believe them and do as you are told. After all you did not know any better then. Up to the age of around eight years we are in a permanent alpha and theta state, the state of “super learning”. Everything we are taught and we experience, is filed away without critical evaluation.
The conditioning continues at school, college or university: Your are taught “How to Think and what to Think” about a subject.
The odds are you take all this Conditioning on board as “Your Knowledge” and act on it, more then likely still to this day.
This pattern permeates every aspect of your life and it plays tricks with your mind when trading too, even though you may be blissfully unaware of this.
The Brain Processes Information Like a Computer
Every piece of learned and empiric material is stored in the brain somewhere.
Similar to a computer routine things are easily accessible. Problems only arise when you change your behaviour and it deviates from your original conditioning. This of course is the case with traders, because in order to be persistently successful, you will have learned new behaviour which is in direct opposition to your instincts or conditioning.
Most traders will have learned to inegrate the new "software", which is the new way of thinking and taking action in accordancew with that thinking. It has become automatic, for the most part.
However, in difficult market conditions, or when personal problems stretch the mental system to the limit, the computer of the mind can crash.
This could result in uncoupling the new conditioning and temporarily falling back into the old conditioning. This type of behaviour, which is a form of escapism may wreak havoc with your performance and selfesteem.
In a fast moving environment like the markets such situations cannot be tolerated for long. You need help and you need it fast.
How can you help yourself out of a tight mental spot before it gets out of hand?
The first part is always Awareness
This, of course, is very difficult when you are emtionally confused or upset. Your mind cannot distinguish reality from fiction any more. Small problems get blown out of proportion and indecision or procrastination often are the consequence, a killer for any trader.
Prevention is always best and a regular mental maintenance program will help you to minimise the negative consequences when you are in emotional downtime.
I get excellent results working with traders and business people increasing and maintaining mental equilibrium and self awareness even when the going gets tough, using EFT.
Knowing exactly how you react under stress and which coping mechanisms you employ regularly to de-stress the system, is very empowering. This knowledge will also greatly increase your performance as a trader.
You may think that you cannot control your circumstances, and you certainly are not able to control market fluctuations to suit your trading style.
You are in total control of your mind though, and if you are not yet, you can learn how to control your thinking, simply by learning awareness of your thoughts.
The beauty of EFT is that it can help you become more cognisant, often in minutes, thus changing your mind state from stressed, indecisive, confused, or whatever it may be to more positive, proactive and creative.
Learn to master EFT, it may dramatically change your trading life and your life in general for the better, as it has mine.
Find more information on Emotional Freedom Technique here...
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