You still don’t think that keeping a detailed forex trading journal is enough for you? If you want to take your journaling to the next level, you might want to get a tape recorder and record how you talk to yourself while trading. Sounds crazy, doesn’t it?
You might not always be aware of it, but forex traders like you and me tend to talk to ourselves while we’re actually trading.
When looking for trade setups, deciding whether or not to take a trade, cursing the markets when the price doesn’t go our way, or praising ourselves when profit targets are hit, we often talk to ourselves.
Psychologists call these conversations “priming.” Priming is an implicit memory effect in which being exposed to a certain stimulus affects how you react to that same stimulus later on.
Simply put, how we act in the present is usually based on how we acted in the past.
This is why ads usually try to make you feel good about the product.
In a way, talking to ourselves while trading forex is like advertising to ourselves because it links our thoughts and feelings to specific events. This makes us more likely to have the same kind of reaction when the same event happens again in the future.
There are three main types of self-talk that forex traders usually use, and each one has both positive and negative effects.
Talk about the environment vs. talk about how you feel
People who talk out loud about the market environment (like price action, changes in market sentiment, etc.) are more likely to be successful at forex trading than people who talk about their feelings, whether they’re good or bad.
This makes sense from a scientific point of view. The process of making decisions happens in the front part of our brains. But when we are emotionally stressed, our heart rates go up and it gets harder to get to the frontal region.
If you say out loud how you feel, it could make your emotions stronger and make it harder for your brain to make the kind of logical decisions you need for forex trading.
Active and passive speech
Even though it seems silly, the trader who talks to himself as “I” is more likely to succeed than the one who talks to himself as “me.”
The reason for this is that “me” shows that a person is only a target of action and can be hurt by what happens.
On the other hand, “I” means that the person is taking part. If you want to be in charge of these things, you say “I eat,” “I do,” “I will take profit,” and “I trade.”
No one will ever be able to control the markets. But people who take charge of what they can and try to be useful wherever they are are more likely to be successful.
Talk about trading vs. wasting time
It shouldn’t be a surprise that traders who can keep their attention on the markets do better than those who can’t.
Even when they’re not trading, successful forex traders show how persistent they are by reading about the markets or talking with other traders about trading strategies. It seems like they are preparing to compete by using their free time to find a way to beat the market.
Those who can’t pay attention, on the other hand, are usually just surfing the web or talking to their friends. These traders only do what they can to get out of the market.
Don’t worry if you’ve been telling yourself bad things more than good ones. Priming takes place in our minds. So, all we have to do to fix it is make a conscious effort to stay away from it.
Here, a recorder will be useful. Pay attention to what you say when you’re trading. If you don’t have one, you can start a forex trading journal and write down what you say.
If you tend to yell out loud when you make a good trade or talk too much about Umbrella Academy during trading hours, it will be easier to change your behavior.
“If you don't find a way to make money while you sleep, you will work until you die.”
- Warren Buffett
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