It used to be thought that after we had grown into adults our brain was our brain and that was that. We could not change it. Whatever cognitive abilities you were born with, were yours forever.
What if your brain was actually very plastic and capable of changing? Wouldn’t that be awesome and hold a lot of potential for your trading results?
On Forex School Online we discuss a lot about strategy, how you can use the very best strategies to become the best trader, plus exactly what you need to do to start becoming and to stay profitable. In today’s lesson however we are going to take a look at something a little different and super interesting.
You may come from a job as a lawyer, dog walker or a receptionist, but you are here because you want to make money by trading. To do that your brain will need to start changing to form the best patterns and pathways so you can become the trader you want to become.
Shaping Your Brain – What We Now Know
We now know that the brain is constantly changing and being molded and adapting depending on its experiences.
New behaviors, new teachings, environmental changes and physical injuries can all cause the brain to grow new neural pathways or reorganize existing ones it already has in place. This amazingly can change how information is processed.
I will give you a cool example of how the brain changes when a person is doing a new job or has new behaviors given to them, from a 2000 study on London taxi drivers (Maguire et al., 2000). To get their license they spend about two years learning to navigate the city’s streets.
After this training and study, fMRI scans showed that 16 male taxi drivers had larger hippocampuses (the spatial & memory part of the brain) than a control group of 50 healthy males.
And the longer the time spent as a taxi driver, the larger the hippocampus tended to be.
As a brain area involved in memory and navigation, the hippocampus seemed to have changed in response to the taxi drivers’ experiences.
As a trader what do you get out of this first part of the lesson?
Your Brain is Changing All The Time
As a trader the whole idea is for you to create a profitable edge over the market so you can make money.
You need to be able to turn to your charts on each day, go into the market, know exactly what your edge looks like and then pounce so that after all your losing trades, your breakevens and winners, you come out on top with profits.
Some people who don’t understand trading properly or what exactly trading is all about call trading gambling. There is a clear-cut difference.
The difference is that traders are trading with a clear and profitable edge on their side. Traders never gamble because they know they will make money overall after the losses have been factored in.
Gamblers, however, do not know if they are profitable or if the trade they are about to place has any edge at all, but they place it and risk money anyway.
The tricky part with your job as a trader is getting from beginner stages to being a super powerful, confident and consistent trader who has a profitable edge that you trust and you are not gambling.
We know that your brain is not going to hold you back because AS LONG AS YOU DO THE CORRECT THINGS it will mold and change with you.
This includes your subconscious brain / mind, which is just as important and is something that we often discuss.
Your subconscious brain is your 6th sense, or the part of the brain that you don’t notice. It picks up all your feelings, trade memories, and when you were scared or nervous about situations.
I discuss why this part of the brain is so important to your trading success and how you can learn to not only trust it, but also improve it in the trading lesson:
If You Don’t Pick & Stick – Can You Learn the Streets of Forex?
What a lot of traders do is pick a method, then jump to another, then move into a random Forex Forum of some sort and jump to another system or indicator that promises some incredible returns.
Going back to the example we showed at the top of this lesson, what would have happened to the taxi drivers and would the same memory part of their brains shown the same incredible results if they moved from their London routes after 6 months and gone to New York, then moved again to Melbourne 6 months later?
Of course not. They would be very average at knowing those 3 locations, but not fantastic at the one like they became!
This exact same principle applies to your trading and every part of it, including your subconscious brain. The reason the taxi driver built abnormally huge memory parts of their brains is because they were experts at what they did.
They had driven those same sets of roads time and again, just the same as you going through the same Forex pairs and being in the same markets, the same time frames, using the same trade setups time and again.
When you are using the same strategy time after time, you start to notice things that you previously didn’t through either lack of experience or the market may not have presented it yet to you. You will start to learn how to perfect your method and how to cut losses and increase profits.
You will begin to see gaps where you previously didn’t, and after a while muscle memory will take over.
Doing previously difficult things like setting orders, working out buffers, stops or where targets should go, you will now do with a blindfold.
However, if you are either on the never-ending ‘hunt for the ‘Holy Grail’, or just keep moving from method to method, then you make it hard for your brain to create the new neural pathways that are really needed, and you don’t give yourself a serious chance at success.
Be the A+ Trader You Want to Become
If there is anything you take away from today, then please make it be this: we know that our brains are changing all the time, but more importantly we know that WE have the power to change them, yes we have the power to change them.
So many traders open their demo accounts and then proceed to trash them. DON’T DO THIS!!
Go from here and every trade you place, place it as if you were risking $1 Million dollars.
I DO NOT mean be cautious. I mean with every trade, trade to win, and to be a winner.
Do not go into your demo or any account and just joke trade or mess around. How you practice is how you really trade and how your brain is forming pathways. Practice and form habits for how you want to become.
Do you want to become a winner?
Then become one. Don’t practice how to lose money because it will very quickly become a serious a long-term habit. Your brain is changing ALL THE TIME and you can change it how you want it to change, depending on what you do from here…
3 TRADING HOMEWORK TASKS:
1: Leave Your Question or Comment Below (and I will reply to you) ⬇
2: Download a Forex Trade Tracking Journal – Excel Tracker to Track Your Progress
3: Make Sure to Read Lesson – Always Trade and Practice A+ Price Action Trade Setups