Online Trading: Restructure Your Mindset to Boost Success Chances

Earning with online trading is not just a matter of technique but also of psychology. In fact, some believe that it is mainly a matter of psychology... And not entirely wrongly. Certainly, the psychological sphere has a dramatic impact on everyone's trading activities, both experts and beginners. The dynamics concern human beings in general, and the ways in which our minds work. Yet it is possible to influence cognitive processes, even at a deep level, and eliminate the idiosyncrasies that stand between the individual and success. Not that it's easy. In fact, it is very complicated to go against one's instincts and "restructure the mind". However, it is possible to achieve the goal and acquire a skill that is certainly useful for one's trading activity but can also be spent in all areas of life, from professional to private. We discuss this in this article, offering an overview of the cognitive processes that involve all those who operate in the market and proposing a solution that can be followed by anyone willing to invest time and mental resources.

What happens in the mind of the trader (and human beings in general)

Obviously, everyone is different, has their own particularities, even in the ways they face dangers. Nevertheless, we all belong to the same species, and are the fruits of the same evolutionary path. In essence, we share some cognitive processes, which have a dramatic and often conscious impact on everyday activities, including online trading. Some of these cognitive mechanisms, and especially those related to dangerous situations, have a stronger impact than others. Exactly, dangerous situations. In its own way, online trading can correspond to a "perennial" dangerous situation. Sometimes the danger is low, other times it is more intense and able to threaten objectively unpleasant consequences, such as the loss of money. On the other hand, some moments are more chaotic than others, and are characterized by the breaking of patterns, by the occurrence of unforeseen events capable of invalidating the most disciplined technical analysis. It is precisely at that moment that the probabilities of making mistakes become higher. Of course, the probabilities increase as the technical baggage narrows. More experienced traders have more arrows in their quiver, but the tendency to make mistakes increases regardless of personal background. What happens in those moments? Simply put, a fight-or-flight mechanism is activated. The mind perceives the danger, therefore it acts by rewarding instinct more than rationality. The aim is to obtain a short-term benefit, whatever the cost. This mechanism, acquired in the most atavistic past of human beings, when the danger was represented by the presence of a super-predator. It is a mechanism of self-preservation that is suited to real life-threatening situations, and that goes badly with the activities of modern man, including trading, when a long-term benefit should be preferred. Unfortunately, it is a mechanism that is always activated, automatically, without the individual realizing it. In everyday life, this translates into gestures and words issued automatically, instinctively. In most cases, everything is resolved with a bad impression, at worst. But what happens when this mechanism is activated in the middle of a trading session? Well, a phenomenon that all traders experience arises: feelings of fear, tension, and increasing stress emerge. Above all, there is a certain difficulty in reasoning with clarity, reasoning becomes less fluid, thoughts overlap. At the same time, some also experience symptoms such as increased heart rate and heavy sweating. In short, psychological pressure increases. The result is often a collapse of effectiveness, a marked tendency to make mistakes and, ultimately, the failure of the trader. These mechanisms concern all traders for a simple reason: they concern all men in general. They can be kept at bay with experience, as procedural memory somehow intervenes on unconscious thought, limiting its effects. But it is obvious: the instinct for self-preservation is activated, and can still cause damage. Is there a solution to all this? Theoretically yes, and it has to do with the concept of mental restructuring.

How to restructure the mind

The goal is to suppress as needed the instinct for self-preservation, in order to maintain clarity even in the most convulsive moments and reason for the long-term benefit, rather than tending towards a momentary benefit. A benefit that in the midst of a trading session... Is perfectly useless. How to restructure the mind? The most direct way is to form mental images that can somehow counter unconscious thought, that can bring the mind back to a situation of closure, thus turning off the self-preservation mechanism. The production and reiteration of these mental images is no small matter, it takes time, commitment and willpower. Also because it is like going against one's instincts, against a biological response. However, it is possible to adopt some measures that can favor this process of "rationalization". For example, it is possible to act starting from the body, first dominating one's physical response. If it is true that the activation of the self-preservation instinct also corresponds to a physical reaction, which includes increased heart rate, increased sweating and muscle tension, then all that remains is to... Relax. Relax first and foremost from a physical point of view. Everyone can easily find their way but in most cases what works are long, deep breaths, perhaps done with eyes closed and in total silence. It only takes a few seconds to be able to regain control of oneself, and avoid being completely controlled by one's instincts. It is therefore a matter of integrating meditation techniques into one's trading activity. It is worth repeating: it is not simple, losing concentration is the norm, but with commitment and practice the goal can be achieved.