How trader’s mind works?

Our mind works in several basic modes.

A plan prepared calmly is rational, well thought out and sensible. However, just before the entry, strong emotions arise and suddenly the same plan seems weak and not adapted to the market.

Why is this so?

When we think rationally, frontal lobe activity dominates in the brain. When emotions (fear) arise, the amygdala takes over as the dominant center. Amygdala is the center responsible for the reaction to danger. It prepares our body to fight or flee. It is a very powerful survival mechanism and it works today just as it did thousands of years ago in the meme. And it is still just as necessary. It’s what helped our race survive on the planet.

But when the amygdala kicks in (because strong emotions have arisen, which our defense systems identify as a threat) our view of the situation changes: This is why we see and evaluate the same situation differently.

The prescription is as follows:

1. The first thing is to be aware of this mechanism. It is powerful, but it can be stopped or even blocked.
But awareness alone can make you not give up and try to return to rational “sober” thinking.

2. If you have a good idea and plan (always write it down, just a simple note, a few sentences) – then after some time return to the situation that previously “froze” you.

Did the market behave as you expected?

Was your plan good?

If many times the market confirms your assumptions (idea and plan), it means that you are doing quite well.

So you have an extra motivation to work on breaking the amygdala and acting in spite of it.
Most people, with time, get used to the “danger” and stress in such situations decreases.

“My emotions are somewhere in the background” – Joe Ross.

We are preparing a big training for professional traders on this very topic.