What sometimes amazes me about trading is a belief that we must approach the market in a specific way to bring about success. When I hear people say “you must be like this” or “you should approach the market like that” I have to chuckle to myself. True, there are some core skills which are beneficial to any trader, but the way in which our brains work vary in perhaps one important way and failing to recognize this in yourself is like well, forcing a left hander to bat right handed. I guess it’s really boils down to the old adage: “find a method which suits your personality”.
The human brain (on which I am not an expert) generally speaking has two major aspects to it. The left and the right side of the brain have different functions and the balance in different individuals can vary. The left side of the brain we are told is responsible for logical, analytical and the more practical sides to personality. The right side of the brain takes account of a person’s emotions, intuition and creativity.
As they pertain to trading, I believe the different balances are mostly obvious in their benefits. Strong left brain advantages are very much about logical planning and discipline. Mechanical trading is a possible strength. Right brain dominance is about intuition and creativity. Seeing the market as a combination of forces and becoming synchronized with it is potentially such a powerful tool for a trader if they can harness it. A combination of both the left brain practical and logical nature with right brain intuition and creativity would surely be a force in trading the markets.
But whilst there are benefits to each, there are also negative aspects to contend with. Traders who are predominantly left-brained are prone to being very rigid in their approach. Also they must think a great deal through, when sometimes the speed of the market requires seemingly Jedi-like skills. A right-brained trader might struggle with consistency of execution despite having a good idea of where the market is headed. As I always like to point out, it’s not the knowing of where the market is headed that makes money, but the effective management of a position while it’s on its way that brings success. So a mix of the two should bring about the greatest chance of success right? Yes and no. The problem with a more balanced type trader is often that they get conflicting messages. There is a need to be methodical, yet when they trade there is often the urge to satisfy their gut instincts about the markets. Acting in a purely methodical fashion only leads to the feeling of ‘missing out’ on the biggest moves and taking cues from the right side of the brain can lead to breaking of rules and discipline which ends in losses when trades don’t play out quite like they were expected to.
To ‘bat’ in our natural way, we must first recognize where our left brain/right brain balance lies. We absolutely must endeavor to incorporate our greatest assets into the way we trade and work on the areas where we are weakest. However, gut instinct and intuition are formed from practical experience and underlying competence in a method. Without this, it’s often true that the feeling of what may happen is no better than tossing a coin or in many cases worse. But if you’re both logical and intuitive in nature, you must approach the market in a way which allows you not only to capitalize on your practical skills, but also gives you the freedom to trade with your instinct and enter “the zone”. The market can be a raging torrent of activity at times and so you must either be mechanical in trading it or mechanically approach how you trade your intuitions. There is no room for uncertainty or indecision at these times.
I feel that so long as a trader has strong self-awareness, any type can experience great success. However, to trade truly with a left and right brain in harmony is something which I believe can potentially elevate a trader to the highest level of performance.
Albert Einstein once said:-
“If I were not a physicist, I would probably be a musician. I often think in music. I live my daydreams in music. I see my life in terms of music.”
I believe that he would have made a wonderful trader, don’t you?
Trade well.
