Trading Psychology

Part 2: Trading Psychology – The Brain

Trading Brain and Loss and profit step by step

Trading Brain and Loss and profit step by step

The brain, also known as the central nervous system, is a huge computing center and consists of billions of nerve cells that are closely linked to billions of other synapses.
The brain is always the most active of all organs and takes over the central control of individual bodily processes. To be able to provide these services, the brain requires large amounts of oxygen and glucose.
The brain is divided into different areas

  1.  Cerebrum
  2.  Cerebellum (midbrain)
  3.  Midbrain
  4.  hindbrain
  5.  Bridge

The midbrain, hindbrain, and pons make up the brain stem. So there are almost three Brain types: cerebrum, diencephalon, and brainstem
All brain types work together, and each of these regions has its functions. the cerebrum is the youngest and largest brain.


  • Organizational characteristics
  • Communication
  • Creativity
  • Rationality
  • Think
  • Memories

The cortex is divided into two hemispheres, left and right, with the left controlling the right side of the body and the right controlling the left. The cerebral cortex can be divided into 4 areas: frontal lobes, parietal lobes, temporal lobes, and hindcutaneous lobes.


  • Frontal lobes: behavior and personality
  • Parietal lobes: sensory system
  • Temporal lobes: speech perception
  • Hips flaps: visual perception

Several areas are always involved in all processes in our brains.

The cerebellum (interbrain), is the emotional brain (control center of emotions) also called the limbic system?


  • Filters sensory information on the way to the cerebrum, since we perceive a lot every day but a lot is not usable (also known as the gateway to consciousness).
  • Coordination of movement sequences (is also involved in more complex movement sequences, such as driving a car for the first time)
  • Equilibrium function

The brainstem (reptilian brain), is the oldest brain and is also called the reptilian brain because it was already in reptiles at that time. It has one task, namely to “survive”, which is also the reason why many people find it so difficult to be happy and satisfied, because the brain is not there for us to be happy and satisfied, but as already mentioned, for us surviving.

Another important point is to know which part of the brain we communicate with and which one we use to take in what is said.
We communicate with the cerebral cortex (speech center), which means that we as humans communicate with a different part of the brain than how we listen.
Everyone has had a situation where they talked to another person, but didn’t understand each other (same language) and therefore talked completely past each other. This is exactly because we communicate with the cerebral cortex and the other party listens with the brainstem.

The brain asks itself 3 questions:
1. What do I have to pay attention to?
2. Is the situation dangerous?
3. Is it new or exciting?
4. What do I have to do?

  • Have you ever wondered why we actually “love” to look directly at our cell phones in the morning?
  • It’s exciting and we’re curious, it’s ultimately not as “boring” as our planned everyday life. Constant feed updates, new events happening in the world, constant push notifications, etc.

Alpha status:
As soon as we interact with another human, our reptilian brain subconsciously compares itself to the other and then decides whether to subordinate or superior. It happens in every situation, it happens because the reptilian brain sets the framework for something (frameworks are usually NOT changeable), but in that case, you can change it and the reason why frameworks are so essential is that the one who sets the frameworks, always wins.

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