(first understand yourself, then decide how you should be trading...)
Watch the video below.
It’s a quick test of your observation skills.
Do not proceed until you’ve done this – otherwise you won’t get the full value of what I’ll be sharing with you.
What just happened here?
You see… in order to make sense of all the information our 5 senses pick up, the brain prioritizes, organizes and eliminates some of that information. Otherwise, our every day lives would be overloaded with sensory information that would make decision-making practically impossible.
The following is a scene from Sherlock Holmes. If you’ve watched the movie, you’ll know this scene well.
In it, Robert Downey Jr. plays the perceptive detective whose keen attention to detail has helped him solve difficult cases and escape from dangerous situations.
In this scene however, we gain an insight to how his gift can also be a curse.
Imagine being at a restaurant and deciding your order – all you want to do is take a look at the menu and decide what to eat.
And if your brain didn’t tune out all other sensory information, you’d be bombarded with all the sights of people, their faces, their clothes, the food, the decor, and sounds of peoples’ conversations, the clinking of wine glasses, the shuffling of feet, etc…
If you had to consciously process all that information, you’d be overwhelmed and paralyzed from taking any action.
Quite literally, human beings can’t make decisions with all that information. So the brain eliminates most of the sensory input, so we can focus on what’s 'relevant'.
In this restaurant example, our ears would actually pick up all the conversations and noises around us. However, the brain figures out (on its own) that we are only interested in paying attention to what’s immediately in front of us, and tunes out all other noises it considers ‘irrelevant’, which we would then experience as ‘white noise’ or ‘background noise’.
In this sense, the brain works very well in paying attention to immediate concerns.
However, this comes at the cost of ignoring some of the other information that might be critical for effective decision-making.
On this note, consider this…
What if … your eyes actually did observe the moon-walking bear, but your brain simply discarded that information because it wasn’t considered to be “relevant”?
Now check out this color changing card trick:
How could we have missed something so obvious that happened right in front of our eyes?
You see… our eyes did observe these changes, but our brain tunes out that information because our attention was focused on something else… so the brain shuts out all other “irrelevant” information from our awareness, making it seem like nothing else had changed.
And we can’t help it – that’s just how our brains are wired.
Interestingly, this is the same reason why after closing a losing trade, it suddenly becomes clear that we should have closed it long ago – the signs were there, but we somehow just didn’t “see” them.
This has huge implications when it comes to trading.
So how can we fix this attention imbalance?
The answer is, we can’t.
As traders, there are so many things happening at the same time that it’s impossible to know what to pay attention to, all the time.
And so I think you’re starting to get an idea of why it’s easy for most retail traders to lose money.
Many of our failures begin within us, and we’re completely unaware of it.
That’s just the tip of the iceberg
What I’ve just described to you is 1 of 9 mental and emotional handicaps that traders face every
day, regardless of whether they’re aware of it, or not.
This is why so many people are still unable to make money consistently, even though they may be trading with a winning system.
The same mental processes that serve us well in daily life, are unfortunately the same ones that cause terrible mistakes in the realm of trading…
…and they can’t be avoided. All the discipline in the world isn’t going to help.
So the first step here is to identify and understand these handicaps… so we can devise a way of trading that sidesteps these issues, instead of taking them head on (and losing).
Click here to continue… (Page 5 of 6)