When Thinking May Not Serve Your Trading

I was listening to a recorded hypnosis seminar today and the speaker was talking about how the brain is made up of two parts. As I often do I see how the content of this information is relevant to my own trading.

 

 

 

 

 

 

 

 

 

 

 

 

The first part of the brain is called the thinker and that is where you start to form opinions on anything, for example: I think the market is bullish, I think the economic data justifies higher stock prices, I believe the market is going to drop. All of these are what you think and essentially your opinions.

The second part of the brain is the prover. The prover is essentially your unconscious and its job is to prove whatever the thinker thinks. The moment that you start to have opinions on what you believe the market is going to do or should do, your unconscious mind sets out to prove that correct.

It can do that in a form of reading a newspaper article, a blog post, or simply listening to somebody else opinion on the market and filtering out all that is irrelevant or that goes against your opinion. Your unconscious mind is sorting the data that you believe to be true and this can be very dangerous in your trading. Essentially all of this is describing what many of you know is called a trading bias. It’s not that any of this is new, but I particularly like the way this speaker was describing this process and I just wanted to share this with you in hopes of when you find yourself having a particular bias on the markets you will stop and reconsider which part of your brain is doing your thinking for you: is it the thinker or the prover. Once you’ve identified that then you can decide if your opinion is serving you in your trading or if you need to reevaluate and come back to a more centered, balanced point of view.