November 14, 2012

Do You Trade Like a Monkey?

Do You Trade Like a Monkey?

Frontal lobe animation

Imagine if we can teach monkeys to trade. Can we turn them into a bunch of successful 'monkey' traders? Or they will fail miserably?

Human brain's structure is far more complex compared to other living being on earth. With our brain we can think, planned ahead, build and create. With our brain also, we can feel emotion, retain our memory, and making decision.

It is inevitable that we will use our brain when we trade. There are two main parts of our brain:

Frontal Lobe, which are built to separate us from an ape. With it we can create a plan and thinking logical and rationally towards any incoming stimulus.

The Limbic system, is the 'primitive' part of our brain. Which is responsible for 'fight or flight' act.

limbic system on our brain
When we are angry because of the losing trades, the blood suddenly rush from the frontal lobe to the limbic system and increased our heart rate, blood pressure, muscle tension similar to a cornered beast. Ready to fight or flight.

Many people not really aware how their emotion affect their trading and life. Now that you know it, is it not wise enough to learn about your own personal trading behaviors and act to your own best interest.

Share This

About ArrowFX

Technically analyze the forex market mainly on USDJPY, EURUSD and GBPUSD by using market rhythm method started by Philip Nel on Forex Factory. The thread started on 2007 and still alive.
Designed By Blogger Templates