Trading psychology part two. So let's do a quick recap on what we've covered in the previous lecture. First of all, we talked about the fact that modern man's brain hasn't had the time to develop, as he's only been on the planet for circa 35,000 years. And our brain is still influenced by primitive man who was around for 5 million years. Then we talked about the fact that you'll find yourself doing things in your trading, that you know you shouldn't, and that these things are being controlled by your reptilian brain. So what's motivating us to behave in this way?

Well, we are either motivated by fear or by greed, but irrespective of this, we all carrier creates a response to fear than we do to greed. And I'll use this picture to prove my point. And it's basically due to our survival instinct. Again, this dates back to man's primal days where as a caveman, this would make sense because one wrong decision was roaming around on the savanna could mean that your dinner for a woolly mammoth or a saber toothed tiger, instead of him potentially being dinner for you. So let's go back to the traits that we discussed in the previous lecture, and look at our psychology at play. So you enter the trade simply because you think that price would rise.

If this was not part of your trading system, and your trading rules, then most likely, you're acting on an instinct driven by the fear of missing out and then price does this So you panic thinking that this is a false breakout, and you close the trader to loss. At this stage, you're panicking clearly demonstrates that you have both a fear of losing and a fear of being wrong. Then price did this. You felt annoyed because of your fear of missing out. You're thinking about all the profit that you're missing out on, had you been in the trade. But this time, you're a little cautious here.

And this is your survival instinct protecting you. So you wait on this occasion for confirmation. Now, it's your fear of losing. That makes you close this trade with a very small profit. At the doji, you're feeling good about yourself. You close the last trade for profit, then you get confirmation of a reversal.

So you're feeling super confident You're on top of your game, and you can make money on demand. So you go short for fear of missing out on the profits as price well in your mind begins to fall. And as you know, price made a stronger, break higher, and then it stopped you out again. This combination here is a combination of your fear of missing out and greed. And basically, the way this manifested itself was in new places of revenge trade, where you try to recover your previous losses. This type of trade will typically be entered almost immediately, instinctively, with little or no thought or no preparation.

You're only then stopped out again. You would then most likely freeze and this is your fear of being wrong at play, as you've taken two quick losses and really don't know what to do. Especially Seems to actually go in the opposite direction of your entry. So this is what we experienced over say, a 10 minute period. And if you add in the fact that most amateur traders are trading with to larger trade size, I hope you can now see why amateur traders can quickly lose most, if not all of their trade capital in a very short period of time. I hope that you now have come to realize that in trading, it's a psychological battle, where only the mentally tough will survive.

It's not about the system, it's about you. When you do trading, right, it's actually a very boring, repetitive process of doing the same thing over and over again. It's not as exciting as you see on the movies, but this is the only way to become consistent and with consistency comes profit. What I have found is that you need to To be much more forgiving and much more realistic in your trading. This way, you will eventually change your belief system, which becomes easier when you have a trading system that you know works. And B, when you start to see positive results, you have to continually work at your trading until it's simply becomes a habit.

What I've found is that you need to be much more forgiving and much more realistic in your trading. This way, you will eventually change your belief system, which becomes easier when you have a trading system that you know works and be when you begin to see positive results. You have to continually work at your trading until it simply becomes a habit. According to the book The one thing it takes on average 66 days to form a new habit. So it will be hard to change these behaviors. And in Malcolm Gladwell book outliers, it says here it takes 10,000 hours to become an expert at Something this, this is probably not what you want to hear.

But if you want to succeed and make the sort of living a professional trader can do, then Believe me, it's worth it. In the next lecture, we'll look at your trading system and what that means for you as a professional trader.