Developing a Successful Forex Trading Mindset Pt. 1

Today’s lesson is just to give you some brief tips on how to develop a successful forex trading mindset. Without a profitable and successful trading mindset, you will be swimming upstream against your emotions/fears, thoughts and unconscious habits which undermine your success.  Perhaps you have noticed this already in your trading, almost as if you are being kept at arms length from trading profitably.

Your trading mindset is really a product of three things;
1) your neuro-physiological wiring

2) your mindset or level of mindfulness 

3) your psychological conditioning

Too many traders always seem to feel it is the system which is holding them back from being profitable. Yet I teach the same price action strategies to hundreds of people, and while many are profitable, others using the same systems are not.

What is the difference between the two?  Their Trading Mindset.

So I will briefly share some key points about the mind, the brain, and how you can help develop a successful trading mindset.  For today’s part 1 of the article, I will focus on the first point, and will cover the other two in the following articles.

Neuro-physiological Wiring (i.e. How Your Brain is Wired)
When your brain changes, so does your mind and vice versa.  They are integrated and help in your development as a forex trader.   Neurons that fire together wire together, and mental activity helps to create new neural structures (positive or negative ones).  Simple unrelated thoughts (about past, present or future) can having significant effects on your trading mindset.

It should be noted there is no compartmentalized portion of your brain just for forex trading.  Everything in your past conditioning and wiring can and will have an effect on your trading success.

The good thing about this is – your mind is neuroplastic and can be re-wired into a whole brain state.  Any subtle changes in brain chemistry, heart rate, etc. can and will alter your concentration, memory and emotions (all critical for trading successfully).

Fantastic ways to alter your neural programming and to build a whole brain state for better performance + a successful trading mindset are a) ERT training, b) a brain gym or using binaural beats c) right diet and lifestyle.

As a whole, your brain has three fundamental functions:

1) Regulation (physiological processes necessary for survival, perception, etc. through exciting or inhibiting neurons)

2) Learning (forming new synapses, pathways and circuits by strengthening or weakening current ones)

3) Selection (working with perception and experience moving towards what is valuable or not)

These three fundamental functions are critical for all mental activity – especially in forex trading.

Regulation
If you have not taught your brain and central nervous system to relax, to breathe slowly and more deeply, your trading will likely be more emotional, panicked and stressed.  You will miss details and make irrational decisions (not trading your strategy, trading with fear, risking too much).  But you can train your brain to regulate the physiological and mental activity through exercise, yoga and breathing practices.

Learning
The best ways to accelerate the learning process is to a) work with a trading mentor, b) practice, study and train to use rule based systems, and c) to train in the markets which provide a feedback loop for you.

Selection
In concert with the learning process, your experience in the markets will help provide a rich context and feedback to help you move towards what is beneficial and valuable for your trading.  This is done by discovering what works and consistently making profits, while moving away from what does not.

Your brain has survival strategies (physical/psychological) hard wired into its cells, and these can help or hurt your trading.  It should be noted, when a survival strategy runs into a high energy (or uncomfortable) situation, the brain will create alarm signals that can and will influence mental activity.

Some of these strategies are;

1) to look for stability/solidity in a constantly changing world
2) to divide what is connected creating a subject/object relationship
3) to avoid pain/threats and seek pleasure

Can you see how these strategies may effect/hurt your trading?  Any of the three stand out?

Food for thought, but perhaps you can explore how they have influenced your trading. This is the first step to building awareness around what makes you tick as a trader, and what you need to work on mentally. Overcoming and transforming these obstacles can (and likely will) mean the difference between making money and losing money.

Regardless, each of these three fundamental functions and strategies will play a critical role in building a successful trading mindset.  Additionally, how your brain is physically wired will either support (or hamper) your learning process.

The good thing is, you can completely train and re-program yourself to be hard wired for successful forex trading.  The only thing missing is working with a proper mentor, a training program, and the right effort.

I hope this helps gives you insights into the mind and why developing a successful trader mindset is important.

I’ll explore more in part two of this article series, so stay tuned, and happy holidays to all!

Kind Regards,
Chris Capre