Summary: In this article we will discuss about the main types of traders’ brains and how they affect their way of visualizing and trading in financial markets like Forex.
We know from research with brain scan that our mood and outlook on market behavior depend on our brain type.
In summary, there are five general types of brains. Among the traders and investors, the three most important brains are compulsive, impulsive and anxious.
People with compulsive brains tend to be trapped in a particular thinking about the market. “It’s too high.” “It’s too manipulated.” “It’s too risky.” It’s too … “whatever. Individuals with compulsive brains tend to trade completely on their own terms and usually are not open to comments or other options.
People with impulsive brains are exactly the opposite. Usually they are unpredictable and have no control over impulse in trading / investing and their everyday life. Without much discipline, they start many more projects compared to those that they complete. They live for creativity and make their ideas possible.
People with anxious brains live as if they had a rain cloud above. They pay more attention to the obstacles for their own success (or the success of others) that the ways in which something might work. They do not like to try new things and do not appreciate the novelty.
The fourth type is the depressed brain. These people tend to feel victimized by the market. They have a mentality of “Rodney Dangerfield” in the belief that they are never treated fairly by the markets. Therefore, always blame the banks, the markets, the goverment, robots, news, companies, or whatever to justify problems with their investments and trades in the market. This kind of thinking rationalizes and justifies its pre-existing state of mind.
The fifth type is a combination of compulsive and impulsive brain. These people tend to be compulsively impulsive, which means they have an addictive relationship with the market and trading. Therefore, they trade excessively because they are merery trading in the same way as a mouse that press a lever to generate pleasure signals in the brain.