Understanding The Lizard Brain When Trading

Image source - Pixabay

While most people like to think that they're rational, and logical - there's several research works that have proven that humans, are more irrational and illogical in decision making, than we like to admit. When I talk about the lizard brain, I'm talking about the human primitive brain. The brain that our ancestors past down to us.

Unfortunately for the modern day man, humans do not run around in forests or jungles anymore looking for their meals. Right now, you have to be able to think and make logical decisions in order to survive. The lizard brain, or the primitive brain is what helped our ancestors to survive in the jungle, but it's a disadvantage in this modern world.

When you bring in your lizard brain into the trading markets, it's usually a disaster. Research works have it that - it's the lizard brain that makes most people lose lots of money in the markets. It's that fight or flight feeling that you get when trading. The lizard brain hates to lose, and it's for this very reason, it always loses in modern day world.

Image source - Pixabay

You need to understand how your lizard brain works. Some professors and wall street professional traders also call it your rat brain - you need to understand it, if you want to be making profits from the markets. You need to understand how your lizard brain allows greed and fear, affect your trading.

As the market professionals say - you have to go against your lizard brain, in order to win the market. The rat brain is what makes you hold on to losing trades, simply because you don't want to accept the loss. And it's the lizard brain, that makes you quickly take your profits, when you could have allowed it run.