One of the things that comes up often from books and market gurus is the notion that a trader must become a robot. Perhaps you’ve come across this adage as well. Unfortunately, it is not true nor is it possible. When you think of robots, what may come to mind is the iconic “Data” that was the anthropomorphic robot on Star Trek; and the not-so-mechanical but still robot-like “Spock” whose character was devoid of emotions. The fact of the matter is that emotions are an inextricable part of being human. Emotions cannot be taken out of the trading equation no matter how much you would like it to be so, but you can do some mental training to curb negative results.. I would submit that even if you could “trade like a robot” that is, devoid of emotions, you would not want to. If you were devoid of emotions it’s true that you would not be plagued by fear, greed, anger, anxiety, doubt or worry which are some of the main culprits that cause erratic behavior like rule violations and breaking commitments. What is also true is that you would not have the advantage of emotions like determination, inspiration, joy, passion or love which are positive emotions that actually support decisions and choices that are in your best interest.
The evidence has been piling up throughout history and now neuroscientists have proven it’s true: The brain’s wiring emphatically relies on emotion over intellect in decision-making. The research has shown that about 90% of all of your decisions are based upon how you feel – not logic. Additionally, those choices and decisions directly impact follow-through and keeping rule commitments…the crux of the trade. Furthermore, those pesky adverse emotions do take a heavy toll on your trading results because they directly affect behavior in very negative ways.
Now, you can put some distance between your emotions and your trading. This can be done through mental training. The same type of training astronauts, military, special agents and world class athletes go through. They learn step-by-step protocols and practice over and over again until the sequence of steps has been assimilated into unconscious control. At that point the mental training takes over and the fear of failure, although not fully eliminated, has been systematically desensitized, meaning that the individual is able to focus with greater intention on the task at hand without the potentially overwhelming specter of fear and/or other debilitating emotions mucking up their process. In other words, they may feel a level of fear but still do what they must because the mental training has developed the capacity for emotional strength and endurance regarding the process. It is the same with your trading; mental training or developing and incorporating a strategic protocol and then practicing until it has been integrated into unconscious competence supports the trading results that you desire. Over time you will build the skill necessary to traverse the pitfalls that loom on the trading horizon. This also involves creating consistency in your approach, analysis, planning and follow-through along with consistency in your ability to remain aligned, calm, grounded and centered to develop the capacity for emotional stamina and durability in the trade.
Training yourself by doing mental and emotional push-ups is essential to building the persistence and perseverance necessary for becoming a consistently successful trader. Just like training for a marathon or other grueling physical challenge, you must remain diligent throughout the early baby steps while keeping your eyes on the purpose of it all…your BIG why. Then on into the longer strides as you expand your proficiency and strategic accuracy one trade at a time. All along the way, with each valuable mistake and failure, you will gain more and more evidence on not only what does not work, but also what does work, thereby fueling the bonfire of your resolve to take another step further and get better one trade at a time. You can do this! We take your training seriously and we are poised to help you achieve your trading goals through our “Mastering the Mental Game” online and on-location courses. Ask your Online Trading Academy representative for more information. Also, get my book, From Pain to Profit: Secrets of the Peak Performance Trader.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.
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