Before discussing what Neuroscience is and its influence on aspects of a trader’s behavior, let’s first understand what Neuroscience is so that there is a connection between the sites discussed and their influence on the mental and psychological aspects of traders in dealing with the Forex market.
Neuroscience is a science that conducts studies and analyzes the human brain or what is known as neuroscience wherein the study of Neuroscience will fully focus on the study of human behavior that is influenced and controlled by our brain which includes cognitive aspects ( Knowledge), affective (Attitudes and behavior) as well as Psychomotor aspects (Development of mindset) which are influenced by various good things that link interactions between humans, technology, nature, culture and the environment which are recorded in our brains and become separate suggestions to stimulate pattern thinking. thoughts and actions that are carried out both consciously and unconsciously.
In relation to the behavioral aspects of a trader in the world of Forex trading, the influence of neuroscience will dominate and shape the mentality and psychology of a trader from the trading processes and experiences carried out and from seeing, studying and observing trends in market behavior which are influenced by expectations, correctness of analysis and projections and sentiments formed. And in the end a trader will have a sense of Crisis and a sense of Belongin, be quick to respond to market changes, have a quick crisis of market sentiment, get hooked on adrenaline when dealing with the market and what is dangerous is the emergence of insecurity, irritability, increased emotional , while speculating and concluding everything related to the market with a pessimistic, optimistic attitude which if the reality is not like that will make it easy for us to conclude everything with a reactive attitude and tend to lead to justification for the actions we take.
Apart from that, the influence of Neuroscience for a trader because he has interacted with the world of Forex for a long time can create and shape personality character building which carries over to aspects of attitude and behavior in everyday life. Apart from that, the knowledge of Neuroscience is also an important parameter of how influential it is for increasing the intelligence of a trader, especially with regard to intellectual Questions, emotional Questions and Spiritual Questions. (ESQs)
From the explanation above, I myself am confused about what I am writing, so to support Forex trading activities that have positive and quality performance and are oriented towards optimal results and are based on risk aspects, we build them with the aim that our neuroscience can develop positively and productively and be able to consider all the consequences faced in the future, especially to achieve the goals of success and success in the short, medium and long term, a plan or systematic planning is needed that combines planning organizing actuating and controlling aspects, which is preceded by a survey and market feasibility analysis and combined with an attitude of hard work, commitment, discipline, consistency, balancing theory and practice, prioritizing understanding of analysis, strategy, managerial skills in managing funds and having a strong response to the market in seeing moments and opportunities to capture generating profits will form the character of traders who prioritize professionalism, scientific and rational attitudes that will affect our brains in thinking in the future.
Neuroscience is the study of nervous tissue, including the brain and neuron cells, and their relationship to a person’s consciousness and behavior. This study also shows that the brain has the ability to continue to change throughout life, as we gain experience or new knowledge. This ability to change is known as neuroplasticity. This term is a combination of neuro which means a network of cells connected by synapses and plasticity which means it can be formed or changed. Parts of the brain that are frequently used will get stronger while those that are rarely used will weaken.
What does neuroscience have to do with trading?
This topic has been covered a lot, not only in the field of trading but also investment as a whole. So neuroscience helps enlighten traders if trading requires a process. Every analysis activity, reaction, emotion that arises when trading will strengthen our brain network. At first, when we first started trading, we would be nervous and easily panic when the market moved wildly.
But after a few months, this panic will lessen. Why? Because unconsciously, the brain network that regulates panic is getting stronger and we are getting more and more immune. So that trading becomes more relaxed. Likewise with the adrenaline that arises when trading, please compare when you have been trading for 1 year with trading for the first time. The adrenaline sensation will definitely be much different.
That’s why there are wise words about trading, “Trading will shape a person’s character when he stays in this game long enough.”
Trading is not a way to get rich instantly, but to shape your character as a trader so you can get consistent profits. What kind of character? Disciplined, calm, and able to make decisions in a short time. This character will be obtained when our account is not an MC. If MC is intermittent, we will never be able to benefit from this neuroscience.
Because trading is a psychological matter, the rest is technical. Based on the report ‘The Psychology and Neuroscience of Financial Decision Making’, it is known that bona fide investment managers still often have problems in making investment decisions. But all of that can be minimized because of their high flying hours. Their brain capacity has changed and according to the needs of investment (trading).
In the field of neuroscience, there is a therapy called “Cognitive Therapy”, where in cognitive therapy, a person can change a negative mindset to a positive one. For example, someone who is afraid of heights, then with cognitive therapy, the brain’s nerve cells will be given cognitive therapy to change the brain’s view of heights to be not afraid of heights, the result is that through cognitive therapy the person can get rid of his fear of heights so that he doesn’t even have a fear of heights. Altitude which in his brain had been branded as something negative was changed to be positive.
So the core targeted by the field of neuroscience is more or less like how humans can control their brains so that the brain provides a stimulus to do something. The positive use of this knowledge will enable a person to have the mindset that is in accordance with what is desired.
Neuroscience and Forex Trading
In fact, there are no scientific records or definite records regarding the link between neuroscience influencing one’s trading. But if we look at “Cognitive Therapy” in the field of neuroscience which is useful for changing one’s mindset, then this analogy can help someone to adjust their mindset in trading. For example, being not afraid to face the chart, being able to accept losses, or changing yourself to be disciplined.
I can’t be sure, because I’ve never seen it myself. But if you think about it logically, for example someone is difficult to discipline. So it is possible that with cognitive therapy a person can be turned into a discipline, so that those who previously could not trade consistently can be consistent. Maybe that’s what I can conclude to answer how neuroscience can help traders in trading.
