Lessons on trading: How to trade forex like a hen
March 13, 2016
Show all

Lessons On Trading: Why Mindset Matters

“…..As a man thinketh in his heart (mind) so is he” – KJV (Prov. 23:7)

“…..As a man thinketh in his heart (mind) so is he” – KJV (Prov. 23:7)

Many traders like to focus solely on trading strategies, others on both trading strategies and money management but not many focus on the three tripods of forex trading:-trading strategy, money management and mindset. This is why in the world of forex trading 95% of the traders lose money. In this article, I briefly discuss why mindset is the key to moving you to higher realms of returns and/or moving you from the majority of the losing 95% to the elite 5%.

Understand The Power Of The Mind

In the early part of the twentieth century, Albert Einstein introduced us to his ground breaking Relativity theory in physics. He essentially showed us that matter(anything that occupies space and has mass) could be converted to energy and vice versa. This was quantified in his famous equation; E=mcwhere E is energy, m is mass and c is the speed of light. This means everything in our universe is ultimately energy. Your thoughts are waves of energy. Today we know that the brain has four common brain waves (Beta, Alpha, Theta and Delta Waves) which are akin to the different gears of a car. The boundaries between the physical and the thought worlds disappear. This is because, thoughts(energy) are things(matter). Poverty/scarcity is therefore a manifestation of one’s state of mind or thoughts. This is very crucial to understand not only for success in trading but also in life. Your inner thought life will reflect in your physical world as shown by the energy mass equivalence equation from Einstein. In other words, whatever is obtaining in your outer world today is a reflection of what is going on in your inner world. Quantum mechanics allows us to understand this better.

Understanding how your mind works is therefore very important because your mind can be your ally or  foe to success in the forex markets and life in general. You can shift the gears of your mind to trade better and succeed in life. Instead of operating on the Beta wavelength of your mind for most of the day, you can operate at higher gears and get better results. One way to do this is via meditation (but this is a discussion for another day).

Your subconcious mind is like a garden. What you plant there will manifest in your life

René Descartes famously said, “I think, therefore I am”.  This statement was made about 400 years ago, way before we truly understood how the mind works. Since then, we now know that his statement was a universal truth. There is a part of the brain scientists call the extrathalamic control modulatory system or the Reticular Activating System (RAS). This is the scientific term for the network of nerve pathways at the base of the brain connecting to the spine. The RAS acts like the doorkeeper in between the conscious mind and the subconscious mind (garden). No you do not have two minds as it were, just one mind with two functions; the conscious and subconscious mind. Some call this the duality of the mind. Whatever belief or affirmation your conscious mind reads or affirms has to pass through the RAS in order to get to the subconscious mind. If the RAS filters these beliefs out, your physical world does not change and all your efforts to achieve your goals eventually fail. If thoughts are successfully planted in the garden(subconscious mind), after getting through the door keeper (RAS), they will eventually manifest in the physical. It follows therefore that if thoughts of trading success and financial abundance get to the subconscious mind, you will be able to succeed in the market. Why is this?


Because your mind will be like a magnetized piece of iron able to lift about twelve times its weight.  Unfortunately, many traders and folks in general, do not pay attention to the state of their mind’s dominant thoughts. This is akin to being like a demagnetized piece of iron not able to even lift a feather. I believe the majority of losing traders are in this category. Henry Ford once said, ”Whether you believe you can  or can’t you are right either way.” This is a profound truth. You can not get better results in any facet of your life if your subconscious mind is not programmed correctly. This is true even in the trading world. You can be wired to be a trader through the trading courses or lessons you took but still remain programmed for failure due to your mentality. Thus, the world today is replete with traders that dream of success in the markets and yet are programmed for failure deep in their subconscious minds. In fact, if you study the major religions globally, you will see this universal truth about the power of thoughts being alluded to one way or the other.

Reprogram Your Financial Thermostat

A flea was placed in a jar. The flea jumped and hit the lid of the jar a couple of times. After a while, the flea jumped only high enough not to hit the lid. When the lid was removed, the flea still jumped only high enough like the previous times before the lid was removed, because it thought and believed the lid was still there. Most traders and people in the world are like this flea; they are limited financially and can not exceed a threshold because over time they have inadvertently programmed a limit internally due to one reason or the other. For instance, many forex traders believe that forex is a zero sum game. I do not believe so. A zero sum game means that after all your efforts, the net result will be zero meaning  after trading the markets for 12 months you ought to have zero gain. Obviously, this goes against the very grain of reasoning why a trader should even consider trading. This belief alone can limit your trading results and cause you to even have a low financial set point without recognizing where the source of your limitation is emanating from. This is very crucial because a trader who has a low financial thermostat set point, will not be able to make a living from the markets despite using the best forex strategies. You can not experience expansion on the outside without expansion on the inside. Poverty and Wealth are both functions of the mindset. It sounds too good to be true but this is the crux of the matter. Forex trading is mostly a mental game and only traders and investors who have understood how to align their thoughts with success do well.

Many traders need to reprogram their financial thermostat set points to higher thresholds in order to move to the 5% of the elite profitable traders. Do you seem to be hitting a ceiling in your earnings from the market or life in general? Maybe it is time to take a critical look at your belief system about money, the markets and prosperity and reprogram your subconscious mind. As you do this, you will begin to see changes for the better.

In conclusion I quote James Allen who said, “Mind is the Master-power that moulds and makes, and Man is Mind, and evermore he takes the tool of thought, and shaping what he wills, brings forth a thousand joys, a thousand ills:- he thinks in secret, and it comes to pass: environment is but his looking-glass.”

Happy trading!

1 Comment

  1. Masego says:

    Very true…nice article!

Leave a Reply

Your email address will not be published. Required fields are marked *