In this episode of Truth About FX, Walter talks about the impulse control and the psychology of overcoming this trading barrier. He shares some cognitive tricks that can help you work on your trading impulses. He also lets some other tricks off his sleeves on how you can work around your trading discipline and manage your risk.

Download (Duration: 06:15 / 7.2 MB)

In This Episode:

00:50 – block off

02:00 – flashing colors

04:05 – impulse control track

Tweetables:

Control your impulses [Click To Tweet].

You need a plan  [Click To Tweet].

Build up your confidence [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter. We’ve got an interesting question here. Somebody asked: Somehow I’m in love with the Naked Forex trading system but — and “but” is capitalized — I’m always stuck into the M5 and M15 charts because there’s action.

This person saw your video when you’ve talked about trading lower time frames and how it can activate certain parts of the brain that are similar to doing drugs. This person asked “How can I avoid this? Would it be best to just block off the lower time frames in MetaTrader and what’s your best trading style?” How should they go about figuring out which style is best for them?   

Walter: This is a tricky one. Really, what’s going on here is — and this is pretty common — you want to feel like you’re doing something. You want to be a trader which means you’ve got to go trade. You’ve got to take some trades.

A lot of traders, such as myself, I’ve learned though is that overtime if you’re able to just take a step back and do a lot more planning and anticipating and lot less reacting and sort of just going wherever the market sends your way. If you look at it, if you look at the platform — I’m sure you probably noticed this — it doesn’t matter if it’s MetaTrader or any of the other platforms, if you put someone who knew nothing about trading, someone who didn’t know anything about trading, the first thing at all, you plump them in front of the trading platform, typical forex trading platform and then you would plump them in font of a video poker machine in Vegas, there’s no difference.

It’s the same thing. That’s why they make all these noises and flashing colors, it’s to get your attention. That’s exactly what it is. So the question is how do you get away from that?

It all comes down to, in a Psychology term, it comes down to “impulse control”. It means you’re not able to control your impulses. People that have brain damage, this is the number one thing.

If someone has brain damage in front of their head, the frontal lobe which is that part of your brain that basically suppresses you from killing and raping everyone you see, these people go crazy. They try to kill and rape everyone they’ll see.

What we want to do is we want to trade from that area of the brain, not the reptilian emotional part of the brain.