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Manage Your Emotions (Part 2 – Intelligence)

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Emotions always outweigh knowledge. You may have extensive knowledge of trading, but this wisdom may not be worth a dime if you are not able to manage your emotions to overcome your insecurities.

This is because any thought process is an emotionally dependent state, so controlling emotions in the process of trading is a decisive factor for its success.

There is no need to give up control of your emotional state. This common belief is ingrained in the minds of traders and blinds them to their potential.

Emotions are biological in origin, absorbing your intellect. They are activated whenever the habitual neural model fails – opening a position on a setup / firing a trigger / condition / fulfilling a condition, exiting a position prematurely, or incurring losses.

What are these emotions? A trader with emotional intelligence does not seek to get rid of emotions. On the contrary, he tries to free himself from them, because he knows that they create a mentality in which he evaluates and reacts to market processes.

The intelligence that is involved in the process of trading is a product of the emotional state in which you trade. Based on this “charged with emotions” process of thinking, the process of making trading decisions is formed. You begin to think that you are able to trade successfully in virtual mode, but in real trading your performance will deteriorate dramatically.

Trading in each of these modes is carried out in different emotionally dependent states of mind, while the trader analyzes the same market information.

In the process of virtual trading, you reflect and evaluate the situation in a state of mind that is free from thinking about the possibility of real losses, since the uncertain situation in the market is taken calmly. In addition, there is no real loss, and your emotional brain knows this. When real losses become possible in the process of real trading, the way of emotional thinking will change.

Once this probability is increased, trading will suddenly cease to be just some cold-blooded exercise for the brain without painful consequences. Potential losses will now become real, regardless of the forecast of the likely course of events. Such a scenario is perceived by the emotional brain, which controls the thought process, as a threat to its existence.

A trader with an unprepared intellect and an independent/same mind/reason falls into uncertainty for the reason that this ambiguity can lead to real, not virtual, losses. If this is explained in terms of the brain’s own mechanisms, then the brain will cause/generate/initiate fear. This is due to a program built into your genetic predisposition.

The brain has an innate tendency to justify/verify/determine the validity of a prediction/question a prediction made based on pattern recognition, even if that prediction was wrong most of the time. (This propensity has allowed our human species to make progress while avoiding potential danger.)

This was critical to the survival of the human race. Unfortunately, traders have brought this predisposition to avoid potential danger into the world of trading. They did it out of fear of uncertainty. Depending on your level of adaptation, you will experience it in the form of doubt, self-doubt, impulse control, or even euphoric thinking.

These primitive patterns that limit your ability to trade were created by your emotional brain in order to survive. In order to get past your current threshold and start making consistent profits, you need to retrain your brain to deal with uncertainty and manage probability.

Your brain was never designed to trade, but you can learn what makes it work/how it works and how to rewire it so you can develop the ability to overcome the shaking while trading.

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