The Trading Psychology Of Decision Making

The Trading Psychology Of Decision Making

Let’s start our discussion with decision making. Just how
important is the decision making process to the way we trade?
To answer that question let’s talk about the word decision.


The simple truth is that there isn’t anything you do without
making a decision first.  Absolutely everything you do requires
the effort of deciding to do it. When you get out of bed in
the morning, you are deciding to rise, when you make your
morning cup of coffee you must decide to put forth the
effort first.


Even things as simple speaking or walking require you to
make the decision to do so. There isn’t a moment in our
lives when we aren’t making a decision.


You can’t even get off with “deciding not to decide”, since
in doing so you are putting forth the conscious effort to
make that decision. Even when within your own mind as you
think – you are making decisions on how to direct your
thoughts, how to mold an idea, and we decide how and when
to direct and focus our attention.


Since we cannot “not decide”, and in reality are making a lot
of conscious, un-conscious, and semi-conscious decisions
each day then it is then fair to say that:


Everything about us, including (but not limited to)


– Our Actions
– Our Attitudes
– Our Emotions
– Our Thoughts
– Our Imagination


Are the result of our decisions and the ways in which we
decide to focus our attentions towards  or away from something.


This brings us to the psychology of decision making. The term
psychology comes from the term pscyche (that is, our own
combined mental and emotional makeup). The way we make any
given decision, out of the thousands we make each day, is
directly affected by our own psyche.


Every single person on the planet internalizes things
differently. We have all had different experiences, we have
different thought processes, and we all see things in slightly
different ways. One image may represent something completely
different to you than it does to your neighbor.


If something influences our psyche (the way we view the world)
then it also influences the way we internalize. The way we
internalize information affects every decision we make.

That is why the SOT trade plan works so well for all types of People / Traders 
because it is just that a PLAN, a plan that is easy to follow
it eliminates the need for the decision process to become complicated
everything we need to decide upon has already been taken care of
and we enter the trade by following our plan.