Bio(Logical) Way of Handling Emotions While Trading.



Handling Emotions While Trading Is Difficult,


But It Will Make You A Better Trader.


Here,


I have explained Biological Way Of Handling Emotions.


Do you know small part of human brain called "Amygdala" is the primary response for emotional responses (including fear, anxiety, and aggression).



- The amygdala is part of the brain’s limbic system.


- The limbic system is responsible for a person’s emotional and behavioral responses.


I know, Now you are thinking how the hell is this "Amygdala is controlling me while trading"?


Let me explain the work of Amygdala.


- Primary role of Amygdala is to protect Human from day one (Approx. 150 Millions years)

- It is doing its work from the times of cavemen till now.

- It only acts, and reacts, based on what it senses in the environment; nothing else.


Let me give a real life example...

Consider you are walking alone in the road.


- Suddenly you are seeing Snake in front you, What you will do now?


There are 3 possibility,



1. Fight:


- You will start fight against the Snake.


Called Fight Mode.



2. Flight:


- You start escaping from the situation, When you realize that you are NOT going to win against the Snake.


Called Flight Mode.




3. Freeze:


- Your mind goes shutdown, You don't know what to do next.

- You stand still without doing anything.


Called Freeze Mode.




- It is important to note that when the amygdala senses fear, it becomes more active,

- And “logical and rational” brain will become less active or disabled.


Now Let's see how this Amygdala control while Trading?



For example,


Your position is going against you, Price is approaching your STOP LOSS.


Now, Your heart rate gets increased in preparation of danger.


Amygdala triggers and sense this is danger for you.


As its sole purpose is to ensure your Survivability.


It will start the work.



Again there is 3 possibilities,


1. Fight:


- You will add more positions to your losing trade, hoping price will reverse in your favor.

- Here, You are fighting against the market.



2. Flight:


- Because of fear, You start exiting your losing trade.

- Here, You are taking Stoploss at predefined area.



3. Freeze:


- Your logical mind stops working.

- Amygdala takes control of you and you will not anything, lately you will exit with big loss.

- Here, This is disaster for your trading account.



These 3 are the most common situations, where most the traders going through while trading.



How we can handle it?


It is very difficult to escape from Amygdala Hijack.


Instead,


Let's find where other traders are facing these situations using our chart. I call this a "Logical Trading System"


Simply,



By understanding other traders emotions & decisions we can take our trading decisions.


This is Market Reality. Let's understand the "Logical Trading System".


&


Handle the emotions while trading than ever before.


To see this in live market, Join Simple Trader Telegram Channel.


See you in LIVE Session!



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