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AN INSIGHT
TO DAY TRADING

THE POWER OF VISUALISATION IN DAY TRADING


Successful day trading requires clear rules about the actual trade execution as well as with regards to the mental condition. Both requires training which on the one side can be achieved through screen time, however, visualisation one the other side represents an effective tool to further strengthen the own abilities off the screens. This article investigates the effect of visualisation and transfers it to the topic of day trading.


Brain studies provide a strong scientific basis for how and why visualisation works. Research reveals that thoughts create the same mental instructions as actions. Mental visualisation has an impact on many cognitive processes in the brain confirming the brain is getting trained for the actual physical performance during the visualisation – in other words, we stimulate the brain activity through visualising the same way as when actually performing the action.


The thalamus is the responsible part of brain which serves this unique role, ranging from relaying sensory and motor signals, as well as regulation of consciousness and alertness. It makes no distinction between inner and outer realities. Therefore, any idea that is visualised intensively enough will take on a semblance of reality in the brain - the actual belief becomes neurologically real and the brain responds accordingly. This effect has specifically been visible when people meditated intensively on a specific goal over an extended period of time. The brain begins relating to that meditated idea as of it were reality.


During the research, neuroscientists discovered two very fundamental characteristics of the brain that help visualisation work the way it does – first, the brain thinks in pictures and second, the brain cannot distinguish whether something is just imagined or actually experienced. It was noticed that visualisation creates neural pathways in the brain which act as a blue-print to be followed in the actual physical performance concluding while visualising the brain creates the same neural pathways as actually doing it.


Sian Beilock of University of Chicago has done pioneering research in this area and considers visualisation an important aspect for setting any goal since much of the unconscious brain is build around a visual construction of the world. Many studies have confirmed that visualising the performance actually improves the execution in the real world. Neural connections are formed and the strength of the connections is directly proportional to the intensity of the individual’s imagination - feeling strengthens the neural connections.


Famous people like basketball legend Michael Jordan, musician and entrepreneur Jaz Z and actors like Will Smith and Jim Carrey have confirmed to use visualisation techniques to cultivate a sense of belief, build confidence and create momentum to realise their ultimate goals.


Finally, transferring this concept to day trading, screen time can be extended to visualisation. Getting into a meditative mode and visualising the own trading plan and rules helps to better internalise them getting a clear picture of what to look for. Additionally, different trading scenarios can be visualised like the perfect trade including the location and setup, reversal and breakout situations. Also, scenarios where a sense of anxiousness is experienced can be recreated during the visualisation to train dealing with the respective emotions and be better prepared in live situations. When a concept is visualised over and over, the brain begins to respond as the concept was real – the respective neural connections are formed. Ideas for visualisation can be taken directly from the recent experience or trade reviews for example providing a clear focus on what to visualise. As a result, those concepts begin to feel more obtainable and real motivating other parts of the brain take intentional action in the physical world.