Author: FTUK

How To Decide If Forex Or Stocks Is The Best Fit For You 

Posted on by FTUK

If you have decided to dabble with trading, or even take a leap into the unknown and aim to make your living as a trader, you might have been weighing up the pros and cons of forex trading versus stocks. This is a decision that requires careful thought, and there are many factors that will influence your decision.

 

 

Forex trading involves buying and selling currency pairs on the foreign exchange market with the aim of making a profit. When you buy one currency, you simultaneously sell the other. Traders analyse market trends and price patterns in order to anticipate which way the markets are going to move, and to help them to identify the optimum time to buy or sell.

 

Just 20 years ago, forex trading was the preserve of financial institutions and full-time city traders. Now the markets have opened up into the world’s largest financial exchange with a trade volume of about $5bn per day, and they are highly active almost round the clock. Anyone can access them online via a broker platform.

 

 

Stock market trading allows traders to buy small shares of blue-chip companies, such as Microsoft or Apple, or many thousands of others. If the company performs well, the value of the shares increases, enabling you to sell them at a profit. Conversely, if the company performance declines, the value of shares drops.

 

Here’s an overview of the key differences between the forex market and the stock market, and how to decide which style of trading might suit you best.

 

 

Market access

 

One of the major draws of the forex market is that it offers almost 24/7 access, with peak trading hours that conveniently coincide with the hours just before and after a typical 9-5 day. This means that you can trade at a time that is convenient to you, and it is very possible to fit forex trading around a full-time job.

 

This is an ideal way to gain experience and build up confidence without the pressure to instantly make consistent profits. Forex trading is a skill that takes time and patience to acquire, and newcomers need to be well-prepared with technical knowledge and armed with psychological resilience (more on this topic later).

 

Therefore, the flexibility of the forex markets, with 24 hour access to the overlapping London, New York, Tokyo, and Sydney markets, offer new traders the opportunity to trade in a market with high liquidity at almost any time. This means that even if you have just a small window of time to invest, it’s still possible to get a foot in the door.

 

On the other hand, the stock markets operate strictly on fixed trading hours on a centralised exchange, usually between 8am and 4pm. They are also closed at the weekend and during public holidays, so there is much less flexibility in the hours you can trade. If you have a full time job, this can be very limiting.

 

 

Leverage opportunities

 

The forex markets offer much higher leverage opportunities than the stock markets. This is the use of borrowed capital to invest in a currency or stock, and it can be borrowed from a broker. Typically, a stock market broker will offer leverage ratios of 2:1, whereas forex brokers tend to offer much higher leverage ratios of 50:1 or even 100:1.

 

This gives you the chance to significantly amplify your potential profits. For example, if you have £1,000 invested in your account, you can access instant forex funding to use a 100:1 leverage ratio to open a position. This would mean that you can control a position of £100,000 in the forex market.

 

 

If the value of your currency pair increases by just 1 per cent, then the value of your position rises to £101,000. If you decide to sell your investment at this point, you would make a profit of £1,000, minus any broker fees. Without leverage, your investment would have yielded a profit of just £10; hardly worth the time and effort put into making the trade.

 

However, the potential for higher rewards comes with the downsides of higher risks. If the value of your currency pair falls by 1 per cent, then you would be £1,000 out of pocket, effectively wiping out your initial investment. Therefore, if you are considering trying your hand at forex trading, you need to be fully aware of the risks.

 

The key to successful forex trading is a solid risk management strategy and a good understanding of how the forex market works.

Market volatility

 

Volatility in the markets refers to short-term price fluctuations. This can bring the potential for keen traders to make significant profits, but it also carries the risk of heavy losses.

The forex markets are considered to be more volatile than the stock markets, because they are more susceptible to the influence of geopolitical and global economic events such as elections, inflation rates, and international trade. Stock markets are more dependent on the performance of individual companies, and therefore tend to be more stable.

 

Therefore, people who relish the challenge of short-term trading are more likely to be suited to forex trading. Blue-chip shareholders tend to adopt more long-term strategies, and this may minimise risk, but it does not offer the same potential for making a steady and profitable income.

Skilled forex traders can supplement their monthly income very comfortably without having to give up their main occupation, whereas stock trading is generally considered to be a more advanced method of investing capital rather than actively generating a steady income.

 

Points to consider if you think forex trading is right for you

 

If the opportunities afforded by high liquidity, flexible trading hours, and high leverage appeal to you, then forex trading may be the right choice. However, it’s important to be aware of the psychology of trading before you plunge in. This applies to both forex and stock trading, but the aforementioned benefits of forex also make it more high risk.

 

Underprepared traders can be taken by surprise when they are under pressure to make fast decisions that will have significant financial consequences. Money provokes strong emotions in even the most stoical of people, and not many of us are truly indifferent to the amount we have. This is because it is so fundamental to our survival and mental and physical comfort.

Therefore, you need to have confidence in the risks you are taking and avoid being tempted by greed for bigger profits, or too crippled by the fear and anxiety of making a loss. Only invest what you can afford to lose, and when considering leverage, it’s best to trade with just one or two per cent of your account value at first.

 

Use stop losses on all of your trades, which allows you to set a limit on the amount you can lose, protecting you from catastrophic losses.

Never risk losing an amount of money that would compromise your ability to pay for life’s essentials, such as rent, bills, and food, or this would lead to a very slippery slope indeed. Amateur traders who make a stinging loss can be provoked into making further rash trades in the hope of recouping their losses.

This can be a natural reaction through panic, fear, shame, or a sense of entitlement. However, successful forex trading relies on being able to make unbiased decisions based on cold facts and market analysis. It’s about risk management, and you should never make decisions in the heat of the moment.

 

Many forex traders practise meditation or deliberately focus on a good work-life balance to keep themselves emotionally stable and grounded. This helps them to step back from a difficult situation and reflect before they act.

Of course, it’s impossible to fully protect yourself from losses, and it happens to the most experienced traders, but the key is to find a balanced strategy that will bring consistent profits over time.

 

Tips for learning about forex trading

 

Forex trading is undoubtedly demanding, and it takes plenty of effort, commitment and patience to succeed.

It is a broad and sometimes complex field, but the majority of traders concentrate on the seven major currencies of the US dollar (USD), the Great British Pound (GBP) the Euro (EUR), the Canadian dollar (CAD), the Japanese yen (JPY), the Swiss franc (CHF), and the Australian dollar (AUD).

 

This helps to narrow down the focus, particularly when you are starting out. There are of course many more world currencies, which are referred to as minor currencies and exotics. However, these tend to be more volatile and challenging to trade than the majors, so beginners are advised to avoid them until they gain more experience and confidence.

There is a vast range of resources available to anyone who wishes to learn more about forex trading, and much of the information is free to access online. There are also many books, podcasts, webinars, and online courses available, so it’s easy to find a method that suits your learning style, schedule, and budget.

How To Let Go Of Perfectionism

Posted on by FTUK

We’ve said it before and we’ll say it again… the key to becoming the best forex trader you possibly can be is to become more self-aware.

Yes, of course, you do need to understand the technical aspects of trading and you do need to be able to identify potentially lucrative opportunities through statistical data analysis, but if this is your sole focus and if you don’t turn the lens inwards at some point, you’re sure to see your success start to plateau.

 

Deepening your understanding of who you are as a person and what your particular strengths and weaknesses are will show you just what you need to dial down on at a personal level to help give your trading performance a long-lasting boost.

It can be difficult to admit to yourself just what your weaknesses are but the more you push past the discomfort, the easier it will become. The more tough conversations you have with yourself, the more you’ll see that doing so ultimately gives you the freedom to grow and develop… and this is when the real work starts to take place!

 

One particular trait that many traders have in common is perfectionism.

These traders usually have incredibly high exacting standards, so much so that they put increasing amounts of pressure on themselves to meet these standards. When you couple this with the perfectionist’s tendency to be very self-critical, you can see how it might be a recipe for disaster.

 

Perfectionists are also typically incredibly well organised and thrive on structure, are often hyper-aware of every little mistake they make and often find it very difficult to move on from perceived errors.

 

This, in particular, can prove to be the downfall of many a perfectionist trader as it’s vital to learn from the mistakes you make along the way if you’re to improve and progress. If you fixate on mistakes and are unable to let them go, you’ll never see the success you’re looking for.

Of course, this isn’t to say that a little bit of a perfectionist attitude isn’t a good thing and if you’ve identified these characteristics within yourself, you can turn them to your advantage if you’re clever about it.

 

Yes, perfectionism can be a very real burden, one that can cause a huge amount of stress and burnout (every trader’s worst nightmare!) because of the amount of pressure you put on yourself to meet your own impossibly high expectations… but, conversely, herein lies the answer.

 

What if you were to aim to be a good perfectionist?

 

One who sets high standards, yes, but standards that are ultimately very achievable through hard work, determination, motivation and perseverance?

 

These are all skills and traits that the most profitable traders will have in abundance, so it stands to reason that you could develop these in such a way as to help you keep your perfectionism under control and working for you, instead of against.

So, if you do believe yourself to be a perfectionist, now’s the time to take a big step away from the trading desk and indulge in some self-reflection to see if this trait is doing more harm than good.

 

If you come to the conclusion that this is in fact the case, try to adopt a more non-judgemental approach, give yourself a break and set yourself more realistic goals, ones that you’re more likely to achieve.

Take it step by step, bit by bit and you’ll soon get where you want to be, without experiencing the high anxiety and stress levels that are the natural bedfellows of bad perfectionism characteristics.

 

The dangers of perfectionism

 

While perfectionism can drive success to a point, it can quickly become problematic and it can quickly take its toll on your mental and emotional health and wellbeing if you’re not in tune with yourself and honest about how you’re feeling.

Part of the problem for perfectionists is that they often feel as though nothing is ever good enough, no matter what. Even if they hit their goals, they often experience a sense of dissatisfaction and they often struggle to find joy in what they’re doing.

 

This can then lead to feelings of low self-worth and you can find yourself trapped in a web of negative self-talk and thought patterns, which in turn can quickly spiral into all sorts of debilitating mental health conditions, everything from stress, anxiety and depression to obsessive compulsive disorder.

 

Interestingly, perfectionism can also lead to procrastination and extreme task avoidance, driven by a fear of failure – something that can really have a big impact on your trading performance.

Procrastinating every now and again is normal and something all of us can expect to experience from time to time but if it’s really starting to get in the way and stopping you from completing the necessary tasks you need to each day, it’s certainly something you’ll need to get on top of if you do want to become one of the top forex traders out there.

 

What you need to do now is to see how you can take this trait and make it work towards your advantage, transforming yourself into an adaptive/positive perfectionist. This means you’ll be in a position to set those high standards and have those lofty goals in sight, working relentlessly to achieve what you have in mind and enjoy the journey at the same time.

Positive perfectionists are those with a growth mindset, people who love nothing more than being challenged and rising to these challenges, solving problems successfully as they go.

In short, their perfectionism becomes a strength, rather than a weakness… and this is exactly what perfectionist traders need to prioritise if they want to reach the pinnacle of success.

 

How to overcome your perfectionist traits

 

Once you’ve identified that you do have perfectionistic tendencies, that’s half the battle won! Admitting it to yourself puts the power back in your hands and gives you greater control over your own life, allowing you to make the necessary changes to overcome it.

Start off by challenging your thought patterns, your behaviours and your beliefs. Write down a list of pursuits that you absolutely have to be perfect at and why you believe this has to be the case.

From there, you can start working out different strategies to help you overcome these thoughts and behaviours, giving yourself tools and resources to fall back on when necessary.

 

Another effective strategy (away from the forex markets) is to give yourself the opportunity to fail. This can be hard at first and you probably won’t like making mistakes, but doing so gives you the opportunity to learn and grow as a person – and as a trader.

Why not find a new hobby or pastime that you’ve never tried before, something that you probably won’t excel at in the beginning.

Rather than trying to be the best or trying to perfect the art, simply aim on having fun and enjoying yourself as you learn and slowly improve. What you’re likely to find is that the mistakes you make are a vital part of your development in your chosen activity… and the same is certainly true for the trading floor.

 

It’s also important to check in with yourself regularly and pay close attention to your feelings and emotions, something that is actually essential for all traders, whether they’re perfectionists or otherwise.

Paying attention to yourself emotionally and identifying how you feel about certain tasks or jobs may be an indication that you’ve set yourself an impossible goal, one that you’ll struggle to achieve.

 

Simply listen to what you’re trying to tell yourself and make adjustments to your goals accordingly – and if you catch yourself engaging in negative self-talk, stop and try to flip this on its head with some affirmations to help encourage more positive thinking.

And, finally, make sure that you keep the bigger picture at the forefront of your mind at all times. All the most successful traders out there are able to keep their ultimate goals in the picture frame so that everything they do and every decision they make helps to take them one step further in the right direction.

 

Maintaining a big-picture perspective allows you to see the connections between the smaller daily tasks you do and your long-term goals. Ultimately, this means that you’ll cut the distance between the two, making the journey more efficient – and more enjoyable.

This means leaving your perfectionist tendencies at the door, prioritising quality over performing each task perfectly in its entirety although, of course, this is often easier said than done.

 

As with anything, you need to give yourself time and be patient with yourself to ensure you progress and don’t go backwards. Simply take your time, don’t rush and don’t expect to see results overnight. Put less pressure on yourself and you’re sure to reap the benefits sooner rather than later.

Why You Need To Be Prepared For Success In Forex Trading

Posted on by FTUK

Forex trading is an exciting opportunity, with trillions of dollars exchanged on the markets every day. Besides the possibility of making extra money, learning how to trade can expand your outlook on life and even change you for the better as a person. It’s a steep learning curve with great potential rewards.

 

Before you even begin trading, you can give yourself the best chance for success with the right preparation. Some people might dream about how success will change their lives, whether that may be through extra money or increased power and status.

 

However, the truth is that you need to be prepared to be successful, rather than sit back and hope that success will change your life. As the saying goes, ‘Success occurs when preparation meets opportunity.’ But what does this mean exactly?

 

Well, success tends to be elusive to people who lack confidence and self-knowledge, so there is little to be achieved by telling yourself that when you are successful you will become happy and confident. This is the wrong way around; you need to work hard to cultivate that positivity and self confidence in order to attract success in the first place.

 

Of course, this is easier said than done, and at times it may be a case of winging it and bouncing back from failure. The important point to remember is that all successful people go through this process, sometimes to an extreme and lengthy degree. Behind the story of any famous sportsperson or musician is a tale of hours and hours of practice and preparation.

 

Sometimes, fate will play a role and even the best laid plans will go astray. This is particularly true in forex trading when even the most seasoned professional can’t be sure 100% of the time which way the markets will turn. However, learning to deal with failure is all part and parcel of becoming a successful forex trader.

 

How do you define success?

 

 

The first step is to define what success means to you. Most people, if they are completely honest, will equate success with making a lot of money, and there is nothing wrong with this goal in itself. Almost all of us would like to live with greater financial security and comfort, with the freedom to travel wherever we please and enjoy the finer things in life.

 

However, this level of financial success rarely happens when we pursue money for its own sake, particularly in the complex world of forex trading. Therefore it’s important to refine what your goals are, and look beyond the simplistic one of making a lot of money.

 

This is because the only way to give yourself any chance of making consistent profits in forex trading is to focus on minimising and managing your risk level. When you are purely chasing dollars you will inevitably take your eye off the ball and come a cropper. And how do you best manage risk? You have probably already guessed, it is through preparation.

 

How to prepare for success

 

So by now it is clear that the success fairy does not sprinkle you with magic dust at random; you have to take charge of your mindset so that you are in the best position to recognize and take advantage of the opportunities to make consistent profits. These chances are always out there for the taking of the well prepared person.

 

Prepare a sound trading strategy

 

Trading strategies are obviously a whole separate topic, and there is plenty of advice out there about how to cultivate a trading strategy that works for you. You should already know your preferred time frame, methodology, and currency pairs, and have practised implementing them with a demo account.

 

Most of all, you should have a sound risk management strategy in place. These are the checks and balances that will stop you from incurring catastrophic losses and compromising your ability to afford the basics of living. Make sure that you understand what your risk tolerance is, how to use stop losses, and how to safely use leverage.

 

Underpinning all of this should be a wider level of understanding of the forex markets and the factors that influence them. This includes learning to analyse the economic news for signs of changes to monetary policy, political events, natural disasters and so on. You should know how any geopolitical current affairs will impact the value of your currency pairs.

 

Mental preparation

 

The next step is to cultivate the right mindset for forex trading. Think of yourself as a mental athlete who needs to get fit in order to be competitive and stay the course. Your strategy will give you the rules of the road, but you still need to learn how to drive the car in a smooth and efficient manner.

 

 

The best place to start is with your pre-trading routine. This helps to set up your day so that you begin in a calm and orderly manner and are ready to deal with the rigours of the day. Some people find that 15 or 20 minutes of exercise is beneficial to help them mentally focus and feel alert and energised.

 

Other people find that a short meditation routine puts them in the right frame of mind. This involves training your mind to focus on the present moment rather than follow its natural tendency to wander from one thought to another. It can take practice to see the benefits, but many people use it as a way of sharpening their powers of concentration.

 

Once you are mentally warmed up and in a positive state of mind, work your way through a checklist before beginning to make trades. This might include checking the economic news for any events relevant to your currency pairs, and making any necessary adjustments to your trading strategy.

 

Emotional management

 

Forex trading elicits strong and deep seated emotions in even the most laid back personalities. You might more readily associate primal emotions of fear, greed, and loss and their dastardly consequences with Shakespearean tragedies, and that seems a whole world away from the logic driven numbers game of the financial markets.

 

However, when we are trading as an individual, we are putting our finances on the line, and this is tied in with our ability to pay for life’s essentials. In other words, the primitive survival instincts will come into play, passed down through the centuries from our ancestors when losing really was a matter of life and death.

 

These emotions can catch out the unwary trader, especially those who think that they are too strong to be affected by them. Everyone makes emotion driven decisions whether consciously or subconsciously, so to try and deny or repress these feelings is very dangerous.

 

The best traders are aware of their emotional state even at moments of intense pressure. They are not prone to hubris and overconfidence, and yet neither are they timid and overly cautious in their decision making. They deal calmly with failures and never indulge in the temptation to revenge trade.

 

This requires self-knowledge to overcome any personal traits, such as impatience or impulsiveness. It also demands emotional intelligence and the ability to recognize and step away from a potentially risky situation. A good trader will always refer back to their trading strategy and market research rather than cave into their instincts.

 

Remember: you do not ‘trust your gut’ ever in forex trading, because this will lead to poor decisions. It’s a game of strategy, not of chasing dollars, which is why it is so dangerous to equate success purely with money. Patience and discipline are the qualities that give the biggest pay-off between risk and reward.

 

At times, you will feel nervous, excited, frustrated, pressured, confused, and so on when you are trading, because no one can completely shut down their emotions and it isn’t a healthy state of mind in any case. The key is to always learn to step aside even when faced with the unexpected and refer to your trading strategy, and act on objective reasoning only.

 

Everyone is different, and when it comes to the most effective way to manage your emotions, it may be a case of trial and error. For some, maintaining a good work-life balance with plenty of exercise, a healthy diet, and positive relationships is key. Other people draw on meditation strategies to help them focus and filter out the ‘white noise’ of their emotions.

 

All this takes time, but if you are determined you will find that your mental resilience and powers of objectivity improve with practice. This will help to set you on the best path to success as a forex trader.

 

The right environment

 

One point that can be overlooked is the physical space in which we trade. While trading can be carried out from anywhere with an internet connection, your surroundings can subconsciously influence your mood and behaviour.

 

If at all possible, have a dedicated zone in your house where you can be completely free from distractions and keep your workspace tidy and well organised.

 

If you are looking for instant forex funding, please get in touch with us today.

 

Why Forex Traders Need To Be The Boss Of An Amygdala Hijack

Posted on by FTUK

Forex trading is a potentially lucrative and rewarding occupation, and to get ahead you need to be prepared to work hard and never miss a beat. It is a game that demands a hard head and emotional detachment in order to succeed.

Paradoxically, mastering true emotional detachment isn’t about attempting to turn yourself into an automaton, but about cultivating emotional intelligence. This will put you in control of every decision that you make, so that you are never at the mercy of emotions such as fear, greed, impatience, excitement, or anxiety.

 

The first step to really being in control of your emotions is to understand a little bit about how your brain processes them. There’s no need to delve into degree level psychology, but it’s really useful to know some of the science.

The part of the brain that is responsible for dealing with our emotions is called the amygdala. It also plays a role in other important functions, including forming memories, learning, and sensory processing. Furthermore, the amygdala is linked to a larger network called the limbic system, which is closely associated with emotional control and behaviour.

 

The amygdala deals with our most primal emotions, and in particular fear and anxiety. This is an evolutionary feature, because our ancestors had to be on constant alert for dangerous predators. Early humans faced life threatening situations on a daily basis, and their brains were primed to instantly recognise and respond to a potential aggressor.

 

When a threat has been identified, it triggers the sympathetic nervous system, AKA the ‘fight or flight’ response. This tells the body to pump more blood to the muscles in preparation for physical combat or a swift departure, so the heart beats quicker and the breathing becomes fast and shallow.

 

Now you may well be thinking, what does all this have to do with forex trading? Well, when we are trading, whether you like it or not we are dealing with a resource that is now the basis for our survival: money. It’s what we all need to keep a roof over our heads and ourselves and our families fed, not to mention pay for all the extras that make life feel worthwhile.

 

We may not be literally facing fearsome beasts slinking through the undergrowth looking for their lunch, but we are facing the mighty forces of the market with the potential to take our precious resource away from us. This evokes strong feelings of fear, and opens the gateway to all sorts of other intense emotions, such as anxiety, anger, greed, and outright panic.

 

Obviously, in the 21st century we still need this powerful response to dangerous situations, because sometimes we are in physical danger. However, a lot of the time the stressors are psychological, and we have no physical outlet for this sudden surge of adrenaline. This can lead to what psychologists call an ‘amygdala attack.’

 

This is a term that was first coined by the psychologist Daniel Goleman in his groundbreaking book Emotional Intelligence (1995). It describes the process where the rational brain is overridden by intense emotion, so that our reactions are not based on logical thought.

We have probably all ruefully reflected on a hasty action that was prompted by an intense emotion such as anger or fear at some point in our lives. For example, you might snap at a loved one who is asking seemingly trivial questions when you are anxious to leave the house in time for work, or curse at a sluggish computer when you have a looming deadline.

 

This is what Goleman defines as an ‘amygdala attack.’ You will probably have noticed some physical symptoms that accompany it, including a racing heart, fast breathing, tense muscles, and even feelings of nausea. After the attack subsides, you realise that your actions were disproportionate or inappropriate for the situation.

 

Sometimes there are no particular consequences for an attack. However, in certain situations they can be corrosive or even seriously damaging. It does not take much of a leap of imagination to realise how they can affect our performance as forex traders. It’s an activity that carries risks and uncertainties, as well as potentially lucrative rewards.

 

The fear of making losses or the desire to make profits can cloud judgement and lead to impulsive decisions. In the complex world of forex trading, this is a slippery slope that can lead to a downward spiral of further mistakes. For example, suffering one loss can provoke ‘revenge trading.’

 

This is a major reason why many beginner traders fail and ultimately decide to quit, and you will always find it featured in those ‘most common forex trading mistakes’ type lists and articles.

 

When a trader suffers a loss, the first step should always be to go back to the strategy to work out what went wrong, and refrain from making another trade for at least a day or two.

 

Inexperienced traders often scramble to try and recover their loss as soon as possible, relying on luck far more often than judgement. However, the forex markets are oblivious to human emotions or lucky strikes, and the only way to get a good result is through clear and rational analysis of the market conditions.

 

The revenge trader may have had a run of good fortune and therefore have a sense of entitlement and an exaggerated idea about their own abilities. A sudden loss can provoke anger or cause hurt pride and loss of face, or even feelings of shame and humiliation among colleagues, family members and friends.

 

This can drive an irrational and disproportionate reaction, such as doubling a position to try and recover the lost money. Because the trade was made in haste rather than because of a genuine opportunity existing in the market, it will only compound the failure and make the financial loss more painful.

 

This destructive cycle therefore needs to be broken or preempted before it takes hold.

 

How can you manage an amygdala hijack?

There is no sure fire way of preventing an amygdala hijack because it is an instinctive human reaction. Some people may be more prone than others; we all have different personalities, temperaments and life experiences that have shaped us as human beings. However, even the most hot headed and impulsive person can learn some control.

The first step is to identify situations where you are vulnerable to an attack, and recognise when one might be about to take you over. This will usually happen when you are about to make a loss, or just after you have made a loss. Your first reaction should always be to step back and stop trading for at least a day so that you can make a rational decision.

Physically remove yourself from the computer screen by going for a walk or making a cup of coffee, then take a few deep breaths. It can even be helpful to picture yourself doing this in advance of a bad outcome, so that you just need to reach the action down from the shelf with no extra effort.

You may find that engaging in a meditation practice such as mindfulness meditation is helpful. This is a way of training the brain to focus on the present moment and to look objectively at the world around you, rather than to become wrapped up in our habitual thoughts and feelings.

Some of the world’s most successful traders and businesspeople start their day off with 15 or 20 minutes of meditation to get them in the right mindset for the rigours of trading. When practised regularly, it can sharpen the focus and concentration of the mind, enabling you to more quickly and effectively step away from unhelpful emotions and recalibrate.

Once the moment of danger has passed, take a look at your trade in the cold light of day and try to work out why it wasn’t successful. Remember that losses happen to everyone, and you need to view them simply as business expenses rather than a sign of personal incompetence or a malevolent market that is out to get you.

Make an assessment of the current market conditions. Are there any factors that are causing uncertainty or volatility, such as an election campaign in a country with a major economy, or a natural disaster or outbreak of war? Maybe you underestimated the impact that these events would have.

It may be necessary to review and adjust your trading strategy so that it is more aligned with the market conditions. Make sure that you learn from the experience and mentally rehearse how you will deal with it next time.

Forex trading is a continual learning curve, not just for facts and figures but also in self-discipline and emotional management. With a little effort, it is possible to become more in charge of your own behaviour and set yourself on track to being a resilient and emotionally intelligent trader.

If you are looking for funded trading accounts in the UK, please visit our website today.

Clocking In: Good Time Management Tips For Forex Traders

Posted on by FTUK

Forex trading offers unique opportunities, with instant funding and highly liquid markets that operate around the clock. However, this 24-hour availability can represent a double edged sword: with the possibility of trading at almost any time of the day or night, it can be easy to become unfocused and not settle into the most effective trading pattern.

 

 

Why is good time management crucial for forex traders?

 

The temptation is there to trade at every available opportunity, and this is understandable, especially if like most people, you are juggling trading with another job. However, quantity is often the enemy of quality in forex trading. Pushing yourself to work at every hour of the day won’t necessarily result in more successful trades, and it could soon lead to burnout.

 

Forex trading has many aspects to it, and the best traders understand that it’s a continual learning curve. It’s crucial to have a good knowledge of the basics to avoid falling into bear traps. However, in such a dynamic and complex market you always need to be broadening and deepening your understanding to stay ahead of the game.

 

For example, it’s important to keep up with the geopolitical events that might affect currency prices, and study the latest economic data releases that are relevant to the currency pairs you trade with. Then there’s technical analysis tools to get to grips with, which can help you to identify the best times to enter and exit the markets.

 

As well as all this, you need to closely monitor and review your trading and risk management strategies, and also keep track of your progress in a trading journal. It’s no wonder that most traders occasionally feel overwhelmed by their to-do lists. With such open-ended tasks, it can be easy to get sidetracked down unnecessary routes that eat up your time.

 

 

Time management is therefore important not just to guard against overtrading, but also to help you filter out distractions and save you from getting bogged down in a miasma of detail. It may be fascinating to disappear down the occasional rabbit hole, and who knows, the information may lead to a brilliant trading move one day.

 

 

However, without discipline and focus, the majority of good trading opportunities will pass you by. It’s therefore important to learn how to navigate the forex markets in a time-efficient manner, to protect both your capital investment and your mental health. Here are some tips to help you put together an effective time management strategy.

 

 

Understand forex market trading hours

 

The first step is to work out when the most active trading hours are for the currency pairs that you trade with. Although the markets are open 24 hours a day, they operate across overlapping time zones rather than in a globally uniform manner.

 

Essentially, trading hours are divided into four major sessions: London (7am to 4pm GMT); New York (noon to 8pm GMT); Sydney (10pm to 5am GMT); and Tokyo (11pm to 8am GMT). The London (or European) session opens just as the Tokyo (or Asian) session is closing, and this crossover period can be a particularly active time.

 

 

When the New York (or North American) session opens at noon, there is another spike in trading activity. There is a further period of volatility towards the end of the day when the London market is preparing to close. If you are trading majors such as the EUR/USD, then look for crossover times to identify the best trading hours.

 

 

However, the most active and volatile periods do not suit all types of trading strategies. They may benefit scalpers or swing traders, but if you prefer to adopt long term trading positions, then you are probably best avoiding the active hours for your currency pairs.

For people who work full time hours of 9-5, it’s still possible to trade during the peak hours for the major currencies such as the EUR, the USD, and the GBP, because these peak at 7am -9am and 4pm-7pm.

 

 

Work out your priorities

 

As previously mentioned, forex trading can seem like a many-headed monster at times. To avoid exhausting yourself by trying to do everything, work out those aspects that are most critical and relevant to your trading strategy. For example, if you favour technical analysis, allocate a proportion of your time to market analysis and interpretation.

 

 

If you focus more on fundamental analysis, make sure that you use the most credible and reliable sources. Set alerts and reminders for new economic data releases that are relevant to your currency pairs, and follow news topics for geopolitical events such as elections, civil unrest, international conflict, natural disasters, and so on.

 

 

However, bookend the time you spend on research and analysis, otherwise it can turn into an amorphous and never-ending task that will constantly distract you from taking the next steps. Be fussy about the credibility of your sources, because an hour spent absorbing high-quality content is worth a day spent wading through misinformation and fake news.

 

 

Establish a routine

 

Decide how many hours per day or week you have to devote to trading, and then divide up each training session into specific tasks. For example, you might spend the first hour on research and analysis, the second on reviewing your current positions and identifying new opportunities, and the third on placing trades and reviewing completed trades.

Consider your strengths and weaknesses

 

 

How you use your time to best effect depends to a certain extent on your personality and individual strengths and weaknesses. Spend some time on self-reflection, or alternatively take a personality test or ask the opinion of friends, family, and colleagues. This can be more helpful than self-assessment, because we all have blind spots.

 

 

If you are an impatient person with quick wits and a high tolerance for risk, then you may suit trading sessions in short sharp bursts rather than longer blocks of time. Be strict about not packing in too many trades, and develop the emotional resilience needed to avoid revenge trading.

On the other hand, if you are a deep thinker and dislike being rushed into decisions, you will probably thrive with longer trading sessions that allow you to drill down into detail and think carefully about your next moves. However, keep an eye on your goals and make sure that you are not being over-cautious in your decision making.

 

 

Sort out your trading environment

 

It is likely that you are working from home, and this is not always conducive to an ideal trading environment. If you do have a spare room to use as an office, zone off a space with furniture or a screen, to form a physical as well as mental barrier between yourself and the rest of the household.

 

Make it clear that you do not want any interruptions, and make sure the TV is off and pets and kids are in another room. Shut down any ‘fun’ browsing windows on your computer and give 100 per cent of your focus to your work. If necessary, invest in some good-quality noise cancelling headphones to block out unwanted noise from elsewhere.

 

This way when you sit down at your desk, you will instantly be in work mode, and find it easier to break free from any mental clutter than can cause your mind to wander and eat away at your precious time.

Recognise when doing nothing is the best policy

 

Do not put yourself under pressure to place a trade if there is no genuinely good reason or opportunity to do so. Trading for the sake of it will only drag down your profit targets, and could lead into a spiral of disillusionment. The best traders have mastered the art of knowing when to do nothing.

 

 

Take regular breaks

 

Finally, scheduling in time for rest and self-care is just as important as everything else. Forex trading is mentally and emotionally demanding, and if you are not careful you can fall prey to stress and exhaustion. Make time to do activities that refresh your batteries, such as exercise, hobbies, or socialising with friends.

 

 

Time is money, as the aphorism goes, but in forex trading the truth is more complex than this. Of course, you need to put the time in to get the results you want, but how you use the time is more important than simply clocking up the hours and maxing out your trading budget.

A good time management strategy will steer you away from the temptation to overtrade, which will only result in burnout and disillusionment. It will also help you to sort out your priorities, so that you do not waste time and energy on activities that bear no immediate relevance to your currency pairs or trading strategy.

 

 

By learning how to make your time work for you, you will soon be on the path to making consistent profits in your forex trading, and each small success will breed further success.

Is Forex Trading A Realistic Full Time Career Choice?

Posted on by FTUK

The idea of making forex trading a full-time career appeals to a diverse range of people, and you may wonder if this is an achievable goal, or an unrealistic pipe-dream. There are many rewards and advantages to be found in a forex trading career, although there are some risks to consider as well. Here’s how to decide if full-time trading is a realistic career for you.

 

Have a clear understanding of what’s involved

First of all, if you are completely new to forex trading, it’s essential that you put in some ground work to help you develop a good understanding of what’s involved. Forex is a continual learning process and it’s best to build on solid foundations.

 

Some people have the misconception that it’s a quick and easy way to make a lot of money, but this is far from the truth. Forex trading requires a high level of discipline, motivation and commitment, as well as good technical skills and market knowledge. As well as this, it requires the ability to accept a certain level of risk and to be able to handle failure well.

 

You will need to have a degree of emotional intelligence and self awareness, so you do not let feelings such as fear, greed, and anger get in the way of your decision making. There is plenty of material available on trading psychology, and it’s strongly recommended to do some research into this field alongside the technical aspects of forex trading.

 

What are the advantages of a forex trading career?

 

Having said all that, there are many advantages to forex trading, which makes it an attractive career choice for a diverse range of people. The forex markets are highly liquid, which means that they are constantly active and it’s easy to buy and sell currency pairs at a high volume without significantly impacting the exchange rate.

 

A highly flexible work schedule

It’s a truly global marketplace that operates across all time zones, so it’s possible to trade almost 24/7 from anywhere in the world. This flexibility makes forex trading a particularly popular career for the ‘digital nomad’ generation who combine travel with work, because location is unimportant, apart from the need to have a reliable internet connection.

 

It also appeals to anyone who dislikes the rigid nine to five working structure, irrespective of where they live, and it can suit people with caring commitments. It can offer the chance to be your own boss, work the hours you choose, set your own profit targets, and be in charge of your work-life balance.

 

This freedom and independence can be empowering, giving you confidence in your own abilities and putting you in charge of your own destiny.

 

Low start-up costs

Unlike most attempts at starting your own business, you can begin forex trading with very little capital and investment. Choose an instant forex funding firm that offers high leverage, and you will be able to work your way up to trading with a much larger amount of capital. Even if you have less than £500 to work with, there’s still an opportunity worth taking.

 

No qualifications to entry

Unlike most financial careers, you don’t need any formal training or qualifications, nor do you have to undergo a rigorous and daunting recruitment process in order to get the job. This can be a huge advantage for people who have not gone down the conventional educational pathways when they were younger, and don’t have any advanced level qualifications.

 

It also suits people who may be recent graduates, but want something different to the standard milkround of interviews and assessment centres that are the usual way onto a graduate career path. If you are happy working on your own initiative and thrive best when working alone, forex trading might be a good career choice for you.

 

Plenty of learning opportunities

Most people who trade forex are self-taught, and in the digital age there is a wealth of information freely available to help you build up your knowledge and skills. Some companies offer structured training courses and webinars if you want to take a more formal approach to learning.

 

There’s also a huge range of books, podcasts and video material available, so your only difficulty might be knowing where to start.

 

A broad range of trading styles

Although you will need certain mental attributes to be a good forex trader, there’s no rigid set of rules about the right or wrong way to do things. Over time, you will develop your own trading strategy based on your personal strengths and weaknesses. For example, impatient people who thrive under pressure may be suited to scalping or day trading.

 

More placid and patient personalities who like to work methodically and think over their next move carefully may be better suited to swing trading or long-term trading. This means that there are many paths to profitability in forex trading, and you do not need to fit in with a cookie-cutter mould to be successful.

 

The most important way to make progress is to continually evolve your strategy and review your progress, and to be prepared to learn from your mistakes.

 

Volatile markets that offer frequent profit-making opportunities

The forex markets can be volatile, with sharp price swings in the major currencies. For well-prepared traders, this offers the opportunity to make significant profits.

 

Drawbacks of a full-time forex trading career

Some people will be ideally suited to full time forex trading, but this is usually because they already have lots of experience on a part time basis, or that they are transferring from another demanding finance career. If you are intending to make forex trading your main income source from little or no previous experience, it’s important to be aware of the pitfalls.

 

High level of risk

There’s no such thing as a 100 per cent success rate in forex trading. It is inherently risky due to market volatility and even experienced traders regularly make losses. Therefore you need to be able to live with a degree of uncertainty, and be prepared to constantly manage risk.

 

No guaranteed income

One of the biggest challenges to making forex trading your full-time career is that it is impossible to guarantee a steady income, especially when you are just starting out. It is unrealistic to expect that you can go from little or no experience to making enough profit to support yourself within a few weeks, or even months.

 

Therefore, unless you have another income source to rely on and are able to withstand losses, it’s strongly suggested that to begin with, you trade with a demo account and then trade live part-time while you find your feet. Otherwise, you will be setting yourself unachievable goals and are likely to feel under too much pressure.

 

Trading is mainly about managing risk rather than pursuing profit, and if you have a ‘sink or swim; mentality, it can lead to mistakes and bad decisions that could be a slippery slope into financial disaster. You can be cushioned from this if you have a significant amount of start-up capital, but even so, a gradual transition to full-time is always the wisest course of action.

 

Self-discipline and lifestyle

Forex trading can be an isolating career, so consider if this will suit your personality and lifestyle. There are online communities where you can connect with other traders and share ideas and advice, but essentially you will be working alone for much of the time.

 

Therefore, you will have to make an effort to maintain a good work-life balance so that you can benefit from real-world social interactions. This will help you to stay emotionally buoyant and better able to withstand the ups and downs that forex trading will inevitably bring.

 

You will also need the self-discipline to keep learning and refining your strategy, because the forex markets are highly dynamic and if you just tread water, it’s likely that you will soon get behind the curve.

 

Consider if you have the right level of motivation and commitment for self-directed learning, with no one to hold you accountable to your progress. If you think that this might be an obstacle for you, it might be possible to reach out to a more experienced trader who will be willing to mentor you through the early stages of your career.

 

One of main reasons people give up forex trading is a lack of practical knowledge combined with impatience and high expectations. To be successful, you need to set yourself small achievable goals and take very small risks in the early stages.

 

Learn how to regulate your emotions so that your decisions are always based on logic rather than emotions such as greed, fear, or anger. Cultivate the ability to walk away and do nothing rather than let yourself be hustled into a poorly-thought through move.

 

Full-time forex trading is a realistic goal for some, but always be aware of the risks involved, and make the transition in well-managed stages rather than assuming that you will be able to have a sustainable career from the outset.

How To Tailor Your Forex Trading Style To Your Personality

Posted on by FTUK

As anyone who is beginning their forex trading journey will know, there is a huge amount of new information to take on board. Developing an understanding of the markets and getting to grips with technical and fundamental analysis is a steep learning curve, and it takes a lot of time, mental focus and commitment. 

This process is essential so that you have a good foundational knowledge of what forex trading is all about and how it works. Understanding the key technical analysis tools and the bearing of geopolitical and economic events on the markets is crucial to putting together a solid trading strategy.

However, no matter how well-informed you are and how carefully you have thought about your trading plan, there’s one very important element that you may not have considered: yourself. If your strategy sets you against your natural personality traits, then you will always be fighting these tendencies and it will impact on your performance as a trader.

To give yourself the best chance of success, it is important to spend some time on self-reflection and identify your core personality traits. This will help you to harness the power of your natural ways of thinking and emotional responses to your advantage, rather than setting them up as continual obstacles to overcome. 

Here are some tips to help you personalise your approach to forex trading, and give you a unique edge that will help your energies and abilities to flow naturally. 

Make an honest appraisal of your personality


If you are not totally honest with yourself about your natural strengths and weaknesses, you will always be jumping from one trading style to another without developing prowess in any. You will struggle to make consistent profits and may even become so discouraged that you decide that forex trading isn’t for you.

However, it’s much more likely that you just haven’t found a trading style that matches your personality. There are a variety of ways you can assess your personality. For example, it is possible to take in-depth psychological and personality tests at an assessment centre or online, although you will need to pay for these and make the time commitment. 

It may be worth investing the time and money if you are interested in a formal and systematic assessment that has been designed by a psychologist. These types of tests are commonly used by large organisations to help them make decisions when hiring staff, to make sure that the candidate is a good fit for the role.

The tests are designed to measure aspects of personality and behaviour such as introversion and extroversion, temperament, motivation and resilience. They can be useful because no matter how well we think we know ourselves, most of us have blind spots or biassed views of ourselves based on outdated information. 

By taking a personality test from a recognised source, such as the famous Myers-Briggs test, you will be able to get a rounded view of your personality that is less subject to your own interpretation. This could be useful if you have limiting beliefs about yourself that were formed in your childhood or youth, or shaped by a negative past relationship. 

The test might help you to recognise strengths that you weren’t fully aware of, and to understand your weaknesses better. A weakness isn’t necessarily something you could or should overcome, it’s just a useful pointer that might suggest you are more suited to one particular trading style over another. 

The personality test can increase your confidence by helping you to better understand where your strengths lie, and to let go of subjective psychological baggage that has been holding you back. There are some free online assessments, although these may be rather generic and superficial in nature, but it may be a good starting point.

If the concept of a personality test does not appeal to you, then spend some time in self-reflection. Ask yourself questions such as whether you enjoy working under pressure, how patient or impulsive you are, your attitude to risk, and whether you have a methodical mind with an eye for detail, or if you prefer to think about the bigger picture. 

It can help to write down your thoughts and feelings rather than just keeping them in your head. Daily journaling can help you to identify patterns of behaviour that you weren’t aware of. 

You may wish to ask the opinion of trusted friends, family members or colleagues. However, they may not be completely honest for fear of causing offence. If on the other hand they do not offer criticism in a constructive manner, it could knock your confidence and upset your relationship with them.

Understand your risk tolerance

Risk tolerance refers to the amount of money you are prepared to lose on each trade. This will depend to a large extent on the amount of capital you can spare without compromising your personal finances. It also depends on your attitude; some people are naturally conservative and cautious, and others are bolder and can handle uncertainty well.

Risk management is a cornerstone of successful forex trading, and it’s strongly linked to emotional intelligence. Read up on trading psychology, which goes beyond personality and explores the reasons why financial trading can elicit powerful emotions, and how they can impact on our trading decisions.

Successful trading requires you to think clearly and objectively, and to step back from subjective and emotion-led decisions. 

Select your trading style

Now you have a better understanding of your personality and your risk tolerance, you can think about what trading style might suit you best. 

Scalping


Scalping is a fast-paced trading style that involves making trades within a few minutes or even seconds of each other. It suits traders with sharp lively minds who thrive on making quick decisions under pressure. It requires energy, focus, and a good balance between confidence and over confidence.  

This trading style may suit people who tend to be impatient but are highly focused and motivated. Because of the fast nature of the trading, it requires a high level of risk tolerance and emotional awareness. Some impulsive people can be driven by their emotions rather than objective thinking, so be aware of this.

Day trading


Day trading involves completing a trade within one day. If you are a highly focused and organised person who doesn’t like to take big risks, then this trading style might suit you. It takes away some of the uncertainty and waiting time of swing trading, but is less pressured than scalping. However, you’ll still need to feel confident with making quick decisions.

Day trading is quite time consuming. Most forex traders do not have 100 per cent of their time to commit to trading and will combine it with another job. Consider whether you are able to fit a whole day of intensive trading into your lifestyle.

Swing trading


Swing trading involves holding a trade over a few days or even weeks. This requires self-discipline and patience, and a phlegmatic personality type who enjoys identifying patterns and is strong-willed enough not to panic when a trade appears to be turning against them. 

Position trading


Position trading involves holding trades open for several weeks, months, or even years. It requires a good understanding of fundamental analysis so that you can keep ahead of market movements and plot the best time to complete your trades. It may suit traders who do not have very much spare time, because day to day you don’t need to do a lot. 

As you can imagine, this style of trading suits people who have the patience to hold the trade through turbulent times without being swayed by geopolitical events or public opinion. It may suit introverted people who are independent thinkers and have an aptitude for fundamental market analysis.  

Be flexible in your approach


Even after a lot of self-reflection and forward planning, it may be impossible to predict which trading style will suit your personality until you have tried out one or two approaches. Remember that your style may evolve as you become more experienced and confident, so stay open minded and flexible.

However, give each style a fair trial and don’t chop and change every time a trade doesn’t go your way. All trading styles have their advantages and disadvantages, and it’s impossible to find a watertight formula that will work for you every time.  

Be aware of your strengths and weaknesses, work on your emotional intelligence and ability to manage risk, and be prepared to learn from others. Above all, make sure that you have a trading style that you enjoy, find rewarding for more than just financial reasons, and fits in with your lifestyle. 

This way you are more likely to build a sustainable forex trading career that will soon be generating a steady income. 

How To Use Match-Trader With FTUK

Posted on by FTUK

Hi traders, in this new article, We’re going to show you how to use Match Trader, the new platform replacing “Platform 5”. We had to switch platforms to keep providing you with the best experience. Today, you’ll learn where to find your credentials, how to set up the platform, and how to use it.

 

https://checkout.ftuk.com/wp-content/uploads/2024/03/Match-Trade-Tutorial.mp4

Finding Your Credentials
If you have already been trading with us, you will receive your credentials on an email.
If you are purchasing a new account, you will also receive your credentials via email or you may also view them on your trader dashboard.
Go to checkout.ftuk.com and log in to your dashboard. Click on the account status icon on the right side of the screen.
You’ll see your login info, including, platform, password, and email….

Logging In and Using Match Trader
log in to the platform through the link below :
https://mtt.checkout.ftuk.com/login

Enter the dashboard login email
and also the password you have received by mail and it’s also available on your dashboard.

You’ll see accounts, news feed, tradable pairs, and a chart.

Personalizing Your Charts
You can easily personalize the chart and open multiple charts at the same time.
You can also add or remove favorite pairs from the list.

Placing a Trade
To place a trade, click on “New Order” or select the pair you want to trade on the chart.
You can choose between market orders and pending orders (buy limit or sell limit).
If you choose a market order, you can set the volume, stop loss, and take profit.
Match Trader will calculate the risk for you based on the volume you entered.
You can see the commission and spread in real-time before placing the trade.

Closing a Trade

You can close your entire position by tapping the “X” button.
You can also close a partial position by tapping on the screen on the right.
Closed positions will be listed under the “Closed Positions” tab.

Placing a Pending Order

To place a pending order, select “Buy Limit” or “Sell Limit.”
Set the price, stop loss, and take profit for your pending order.
You can also set the order to expire at a specific time.

Getting To Grips With Your Lizard Brain!

Posted on by FTUK

At first, learning the fine art of forex trading is very much about gaining an understanding of the markets, what drives them and what influences them in the long and short term, and how you can use your newfound knowledge to your advantage when it comes to trading currency pairs.

But what you’re sure to find once you’ve got to grips with all the industry jargon and have established a trading routine for yourself is just how much of a journey of self-discovery trading actually is.

 

This is often something that surprises people when they first venture into the forex fray, but without introspection, without self-reflection and without developing your self-awareness, you’ll never reach the dizzying heights of success. If you’ve found yourself starting to plateau of late, this could certainly be one of the reasons why.

 

One of the biggest areas to focus if you want to become a better trader is your emotional management and regulation. Emotions need to be kept in check and trading needs to be approached at all times from a place of rationale and reasoning… but, of course, we’re people first and traders second, so this can be very hard to achieve.

 

It’s an area that the majority of traders struggle with when they first start out – and even seasoned pros need a reminder from time to time, so don’t feel disheartened if you do think your emotions are leading the charge right now. It all comes down to practice and arming yourself with the knowledge and skills you need to keep the end goal in sight at all times.

 

Part of the issue is that a lot of our behaviour is so ingrained that we often react to stimuli on impulse, without really thinking about it until it’s too late. Our innate natural responses kick in and we make decisions and take action based on an emotional process that’s largely out of our control.

This can be very difficult indeed to get a handle on but it’s a must if you want to drive success your way… and this is where deepening your knowledge of your lizard brain might well come in particularly handy.

 

So, now’s the perfect time to ask:

Just what is our lizard brain anyway?

 

The human brain is divided up into three major parts: The forebrain, the midbrain and the hindbrain. The forebrain is the biggest of these, making up the majority of the cerebrum, which is split into two hemispheres that are linked by the corpus callosum.

The structures found within the forebrain include the hypothalamus, the cerebrum, the pituitary gland and the limbic system… or the lizard brain, if you will.

 

The limbic system can be found deep in the middle of the brain and it’s often referred to as the emotional brain, because it’s so heavily involved in driving our behaviour and emotional responses to stimuli, particularly when it comes to survival behaviours such as fight or flight, feeding, reproduction and caring for our young.

 

When the lizard brain is triggered, it can assume control and bypass your neocortex (or thinking brain), which in turn leads to impulsive and irrational behaviour. 

 

Triggers like perceived threats to safety (financial, emotional, social or otherwise), stress, hunger and addiction can all activate your lizard brain, robbing you of logical thought and making you act and react in a more primal way.

 

Of course, it’s entirely natural to lose your cool and react without thinking from time to time. We’ve all been there once or twice and, no doubt, we’ll all find ourselves there again in the future… but what’s important is to learn to identify situations that could cause potential issues, allowing you to keep your reactions in check and prevent you from self-sabotaging as far as is practicably possible.

That’s often easier said than done, however, because unfortunately our lizard brain reactions are evolutionarily ingrained and you’re fighting against centuries of natural selection. 

 

Our limbic system is all about quick, protective reactions, which were incredibly important for our earlier ancestors, who were constantly facing all sorts of dangerous threats. Back then, ignoring the lizard brain’s warning system inevitably meant a somewhat sticky end. 

When faced with a threat, the lizard brain would look to past experiences and apply these to the current situation, cutting off your prefrontal cortex and forcing you into action without thought to keep you out of harm’s way and ensure your survival no matter what.

 

That was all very well and good for our ancestors, but it does pose something of a problem for us in the 21st century. Our lizard brains are unable to discern between physical threats and psychological ones, so it often fires up when there’s really no need, overestimating the danger and underestimating your ability to handle it.

 

The good news, however, is that it’s entirely possible to keep your lizard brain under control and you are still in the driving seat, able to make a choice between action and reaction… with a bit of practice, of course!

 

Beating your lizard brain for trading success

Keeping your cool is what trading is all about, staying calm and collected in the face of adversity but also in the face of success. 

Reacting impulsively to both positive and negative scenarios won’t see you reach the pinnacles of trading success, so it’s important that you’re able to develop your sense of self-awareness to such an extent that you’re able to stay in the driving seat no matter what, keeping your lizard brain on a very tight leash.

 

Devising long-term trading strategies based on in-depth analysis is the bedrock of any successful trading career, but when the lizard brain is in charge, our decisions are largely driven by fear and all our hard work goes out of the window. We act rashly, we take chances we wouldn’t otherwise take and our mistakes can cost us dearly.

 

Stress is likely to be the biggest factor for traders trying to keep their limbic system in check, so finding stress-busting measures that you can fall back on will certainly stand you in excellent stead.

 

First of all, don’t be afraid to take a step back if you need to. Stress affects how clearly you’re able to think and keeping yourself in a stressful situation means you can quickly find yourself in a downward spiral. 

 

Get up, move around, take a break, get outside, hit the gym, do some mindfulness breathing exercises… all of this can help you recentre, revitalise yourself and allow you to return to your desk with a fresh outlook and a calmer mind.

 

Secondly, start to tune into how your body feels. When your lizard brain is kicking in as an innate response, you’ll find that your body starts to give you physical cues, whether that’s an increase in heart rate, a sudden sweat break out or a tightening feeling in your stomach. 

These are all signs and symptoms to be on high alert for, so you can stop what you’re doing, take a few deep breaths, calm down and restore balance to both body and mind.

 

Intentional breathing is one of the very best ways to activate your parasympathetic nervous system in times of strife, stimulating the vagus nerve and sending signals to your brain to slow your heart rate down and lower your blood pressure. You’ll be feeling ready to attack the trading floor with a fresh perspective in no time.

 

When you’re not trading, there are also countless opportunities to strengthen and activate your prefrontal cortex (your thinking brain) so that when you do return to your laptop, you can do so with even greater confidence that your lizard brain won’t trip you up.

Creativing thinking, problem-solving and reasoning exercises can help you practise self-control, giving you the tools you need to remain calm while trading, regardless of what the day throws at you. 

 

Also known as grounding exercises, these techniques work to engage all five of your senses, focusing the mind on the present moment and activating the thinking brain as a result.

 

To get you started, try the 5-4-3-2-1 technique, where you name five things you can see, four you can touch and name, three sounds you can identify, two scents you can smell and one thing you can taste.

 

You might be sceptical at first but through regular practice you’re sure to find that you’re better able to respond in a more rational and calm manner to all sorts of challenging circumstances that may have flummoxed you in the past.

 

Good luck! Let us know how the lizard brain training goes!