How to Develop a “Trading Brain”

Lots of books have been written about both sides of our brain. The left side is the more linear, formula-dependent, action-oriented brain and the right side understands design, symphony and context. Nobel laureate Daniel Kahneman calls them System I and System II.

The first system – the one that came up with the word Hill (Jack and Jill are up ____) pushed you. He always does. The bad news is that you can’t even close it. Want proof?

Which font is bigger?

There’s a voice inside your brain saying left at the first moment. But if you look closely they are equal. Now look at it again. The left still looks bigger. this is the problem. System I do not shut up.

On the other hand, System II thinks seriously, understands and then responds. It is activated when the first system fails. Only when the system fails. Let’s run it.

47 * 53 =?

The system I am now noisy. Don’t know what to do. Now System II takes over.

(The above experiment is copied from Thinking Fast and Slow – a leading book in psychology.)

But what does this have to do with trading?

Herein lies the problem of trading. Trading is fast. No time to respond. The second system needs time to absorb, absorb and respond. And order I’m like a drunken lazy drool that will pick out what comes. He hates hard work. Same system I am your friend in trading. System II sleeps when the market is open. This is the whole problem.

This is why trading is so hard!!

Now you have two options. Don’t Trade – Just Invest – Use System II.

Or – take a hard hit and train System I to obey your commands. It is far from easy. It’s like trying to push a mountain. But this is the only way out. Pushing mountains takes years. Hence the great traders take years to develop. Their reactions take years to reshape.

But what is the process? How is one system tamed I am?

3P process I call it. It applies to every drastic change in life. Practice, pain and proof.

Exercise Practice isn’t perfect. Practice makes it permanent. Bruce Lee explains it best.


Habits are never broken, they are replaced. (Read Charles Duhigg – The Power of Habit.) Old habits take time to replace. You need to hit them. Do it over and over again. Do it 10,000 times like Bruce Lee

pain Every great achievement requires pain. Your birth was painful. Building muscle is painful. Running an entire marathon is painful. But it’s always the last muscle-building exercise. That extra power you get when you run on the last lap – it’s called The Runners High. This is what makes you what you are. This is how a moth breaks out and becomes a butterfly.

Muhammad Ali explains it well…


guide Test your system again. Test your beliefs again. Test all the signals you want to trade on. Test it a thousand times. Convince your mind that they work. Your brain needs to respond in seconds and can’t do that if it doesn’t trust the data. Confidence comes from trust. From trust comes victory.

And after all this comes discipline. stuck to it. follow her. trust him. But just like something has to go wrong in every movie only at the last minute it also happens in circulation too. There are a few demons to conquer before you get to the princess.

The six demons that will come between you and the princess.

Information – Information during market hours is a distraction. Turn it off. We have a plan. stuck to it. Turn off the TV and turn off the phone, especially WhatsApp.

Paid – This is the son of information. You see some news, some headlines on CNBC and let yourself go. This is not what ace dealers do. They don’t drift

Insomnia Rest well every day. Trading is a system in all walks of life. You are a samurai. Remember that. Your mind needs rest. If you track the Dow at night, it means only two things – you are stuck in a bad situation that you need to get out of or you are over-leveraged which is equally bad.

ignorance Be well informed about the news regarding your stock. Be aware of the total data numbers that will be released during the trading day and factor that into your plan.

ideology As a trader, don’t focus on one method. Learn how to evolve. Market development. The systems work and then suddenly stop working. Different systems operate in different markets. Be aware of that. Keep adapting.

I – I’m here mean you. This means EGO. You have no ego. Price is the man in you to the market floor. When he tells you to get out, run as if your tail is on. Don’t ask anyone what to do. Nobody knows anything anyway 😛

(I could also say Intraday – but that would just be a rude joke to some people)

After completing the 3P operation and fighting these demons, you will get your princess.

And that, ladies and gentlemen, how to become a great merchant

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