After working as a broker on Wall Street for 2 years, at a hedge fund for 1 year, trading my own money for 15 years, as well as training traders for the last 8, I've seen one consistent pattern amongst struggling traders.
By and large, they spend 90% of their time training with the charts, reading books, watching videos, leaving approximately 10% for their trading mindset.
The Thinking-Analytical Brain
Regardless of how their currency of time is spent, one variable tends to be constantly
present - they are training only one part of their 'mind', particularly the 'thinking/analytical' part of their brain.
While we are doing analysis, looking at the price action context, determining the impulsive and corrective moves, the type of trend and what levels are key, it is this 'thinking' brain we are using by and large.
This is our 'conscious mind', the internal thoughts we are 'aware' of, all done inside the neo-cortex (latin for 'new brain').
Technically, the neo-cortex is the most 'evolved' portion of our brain. All of our choices on what to trade, calculating risk, or doing our price action analysis is done via the conscious mind. Most of this type of thinking is done in the PFC, or the 'Pre-Frontal Cortex'.
One would think that using the most 'evolved' and 'analytical' portion of our brain would be the best weapon for trading. And herein lies the great twist and irony.
Only 5%
On average, each person has about 60,000 thoughts a day. This translates to about 41 thoughts per second. But of these 60,000 thoughts we have from one waking morning to the next, ~3,000 (or 5%) we are actually 'conscious' of.
If you think about it, this makes sense in our everyday lives. Who needs to consciously 'think' about how to brush your teeth, go to the bathroom, turn on the computer? Most of us don't, and this is because the neural networks for such actions are 'subconscious' and thus automatic, i.e. a 'skill'.
On top of this, the most 'evolved' portion of our brain can only think one conscious thought at a time. It can do this really fast, but only one.
How Does This Relate to Trading?
Tying all this back into our trading reality, if you spend most of your time analyzing price action in the now, reading trading books and watching trading videos, by and large, you are only training one portion of your mind (the conscious mind).
The problem with this formula is that it leaves an imbalanced trading mindset. A subconscious mind that is not properly trained, never digging into our unconscious mind and self-image, will leave us vulnerable to a) repeating the same trading mistakes, and b) inconsistent Execution (which in turn hurts performance).
Both of these mental errors could be due to not properly training our subconscious mind, but they can also be caused by our unconscious mind and self-image.
These are the parts of your trading mind you never (or rarely) train.
meditation
Where Consistency in Execution Comes From
There is only one place consistency in execution comes from - the mind. To have consistency in your execution, you'll need balance and consistency in your mind.
By training only with our 'conscious' mind, we'll have an imbalanced trading mindset, and that by itself will not lead to our trading goals.
Hence, I'll end this creative with two questions:
1) How much of your training time do you focus on your trading mindset?
2) From this time you work on your mindset, how much is dedicated towards your subconscious and unconscious mind?
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