INTRODUCTION

The number of day traders has increased significantly in the last couple of years (1). Factors responsible for this increase include the COVID-19 pandemic and a rise in the unemployment rate. These factors compelled many to turn to day trading for self-sustenance, profit-making, passing time, and whatnot. Others were lured into day trading by stories of unimaginable profits and the promise of lifelong fortune in a short period, only to discover that there is more to day trading than meets the eye.

Day trading is like every profession in the world: it is characterized by triumphs and trials, highs and lows, and a rollercoaster of emotions depending on different factors, including the performance of your trades; however, this truth is scarcely preached. Many people only see day trading as a quick path to fortune; they forget or sometimes ignore the fact that day trading can also be a quick path to penury because day trading fortunes can be lost as quickly as they are made. To mitigate life-wrecking losses, traders must have the right trading strategy and robust fiscal backup, but, more importantly, the right psychology. Success on the trading floor goes beyond understanding candle stick patterns and proper trade timing. The value of the mindset in the business of trading cannot be overemphasized.

The above is why this article series towers high in level of importance. This article series comprehensively discusses the major emotional challenges that prevent day traders from cultivating the right psychology for profitable daily trading. The pieces offer evidence-based interventions such as Neuro-linguistic programming and hypnosis as veritable interventions to overcome these challenges. The series also covers a brief description of day trading and its challenges, as well as trading psychology in this introductory piece. With a promise of delightful reads, let's delve right in!

DAY TRADING: WHAT IS IT?

The Oxford English dictionary captures the crucial elements of 'day trading' succinctly with its definition of day trading as "a form of [financial instrument] dealing in which individuals buy and sell [financial instrument] over the internet over a period of a single day's trading, with the intention of profiting from small price fluctuations (2)." The above definition underscores the fact that day traders buy and sell financial instruments within the same day - and that distinguishes them from other traders.

Unfortunately, day traders are not immune to the experiences of other traders on the trading floor, and, if anything, they are more susceptible to emotional fluctuations than other traders, as price fluctuations affect their trades more. So, for day traders, having the right psychology while trading cannot be overemphasized, however, many day traders constantly find themselves on the trading floor without the right state of mind because day traders face lots of emotional challenges while trading; let's take a careful look at some of them.

THE CHALLENGES OF A DAY TRADER

Day trading is not an easy profession. It is a profession that tests more than just your knowledge. It tests the limits of your emotional fortitude and the strength of your character, among other things. Day trading is a mentally demanding occupation, particularly when advanced trading techniques such inner circle trading (ICT) and smart money concepts (SMC)(3) are used.

Day traders who use these techniques face unique mental challenges that can affect their performance and overall mental health. One of these difficulties is dealing with high levels of stress and pressure. ICT and SMC techniques demand the analysis of extensive amounts of data and entering and exiting positions based on unpredictable market trends and signals. This is mentally exhausting. It may cause a trader to feel inadequate, causing the trader to panic and become anxious when unexpected yet dire situations arise.

Another challenge many day traders using these techniques may face is the fear of missing out because they feel they are unworthy. This fear occurs when traders feel the need to enter a trade anxiously before missing out on a big profit opportunity; more often than not, they miss the opportunity and begin to believe it is because they are undeserving of it.

Additionally, day traders may feel they do not matter and as a result start experiencing feelings of isolation and loneliness. Unlike 9-5 jobs, day traders work alone and from the comfort of their respective locations and hence do not often have the social support and interaction office jobs employees enjoy. When traders feel they do not count and can't prevail, it impacts their overall mental well-being trading and their trading performance.

Sometimes, day traders, ICT and SMC technique users especially, battle with feelings of powerlessness. Because trading requires a lot of technical know-how and analytical skills, many traders feel incompetent and powerless to determine their outcome. They run with the idea that the odds that determine their outcomes are too abstract and unpredictable for them to succeed and may as a result give up.

However, these challenges can be surmounted. To mitigate these challenges, aside from taking steps to improve their mental health and overall well-being by taking breaks, meditating, seeking support from family and friends, and taking part in social activities, day traders would find using therapeutic techniques such as Neuro-Linguistic Programming (NLP) and hypnotherapy helpful.

CAN NLP AND HYPNOSIS HELP TRADERS OVERCOME THE CHALLENGES HIGHLIGHTED ABOVE?

The unmistakable answer is that they can. Neuro-linguistic programming and hypnosis can help traders overcome the physical and emotional challenges associated with day trading, irrespective of the techniques (ICT and SMC inclusive) they use. These therapeutic techniques can help traders manage stress, anxiety, inadequacy and other negative emotions that affect their trading performance. Below are detailed but simple explanations of NLP and hypnosis.

NEURO-LINGUISTIC PROGRAMMING IN SIMPLE TERMS

Neuro-Linguistic Programming (NLP) came through the hands of John Grinder and Richard Bandler in the 70s. It has been constantly refined, tested, and scientifically proven to be an effective technique for overcoming negative feelings and attitudes, as well as the consequences of both, since it was first described. The words that make up the name ('NEURO,' 'LINGUISTIC,' AND 'PROGRAMMING') make it clear what the technique is about. NLP is an interventional technique that carefully employs meticulously crafted words (linguistic) to program (programming) the activities of the neurological system (neuro) to enhance productivity and personal development.

NLP is also a proven technique for helping people scale new heights of personal excellence by teaching the patterns and methods used by successful people to achieve excellence in a particular field to others struggling in the same field. Through NLP, traders who are struggling with the challenges above can readily model other people's patterns of overcoming them so that they produce the same results or better.

COMMUNICATING THE MEANING OF HYPNOTHERAPY

Hypnotherapy is a type of therapy that employs guided relaxation and focused attention to help a person achieve a state of deep relaxation and increased receptivity to suggestions. In this state, the hypnotized personality is less aware of his external environment, more aware of his subconscious, and more open to suggestions that can reprogram his or her subconscious mind to overcome negative patterns of behavior, thoughts, and emotions.

Hypnosis helps people overcome fear, reduce anxiety, manage chronic physical and emotional pain, and improve their overall well-being. Misconceptions about hypnosis exist, but contrary to the claims of those misconceptions, hypnosis does not lead to mind control. Instead, the individual needs and preferences of the hypnotized person are still respected during hypnosis.

Hypnosis can address a wide range of mental and physical health issues. And people often use it with other forms of therapy to enhance its effectiveness and achieve lasting results. Hypnotherapy is safe and non-invasive, producing negligible side effects, if any.

CONCLUSION

Day trading, especially when using ICT and Smart Money Concept techniques, can be mentally taxing. Day traders who employ these techniques must know the difficulties that face day traders and take steps to manage their mental health and well-being. Neuro-linguistic programming and hypnosis can be used effectively to help people manage their mental health and well-being.

Hypnotherapy is an ancient but scientific and powerful non-invasive form of therapy that helps people make positive changes by accessing their subconscious mind and reprogramming negative behavioral patterns, thoughts, and emotions. It often produces rapid results and can be used with other forms of therapy. Neuro-linguistic programming, on the other hand, uses language to identify the faults with a behavioral or thought pattern and suggests powerful effective strategies for overcoming the identified patterns. Both are effective for managing all the challenges traders face listed above, as subsequent articles in this series will reveal in more detail.

NEED HELP?

Do you want to know more right now? Here is a link to contact Matthew Tweedie(4), an excellent Hypnotherapist, Hypno-Psychotherapist, NLP Coach, and Hypnosis and NLP Trainer. He is highly trained and professional, and he has a long track record of success with many clients. He is at your disposal.

NEURO-LINGUISTIC PROGRAMMING (NLP) AND HYPNOSIS FOR DAY TRADERS: A SERIES PART 2: OVERCOMING INADEQUACY AS A TRADER WITH NEURO-LINGUISTIC PROGRAMMING (NLP) AND HYPNOSIS

REFERENCES

1. Nova A. Many are chasing the stock market by day trading in the pandemic. It could end badly [Internet]. CNBC. 2020 [cited 2023 Mar 18]. Available from: https://www.cnbc.com/2020/09/21/many-people-turn-to-day-trading-in-pandemic-few-will-be-a-winners.html

2. day-trader noun - Definition, pictures, pronunciation and usage notes | Oxford Advanced Learner’s Dictionary at OxfordLearnersDictionaries.com [Internet]. [cited 2023 Mar 23]. Available from: https://www.oxfordlearnersdictionaries.com/definition/english/day-trader

3. Breaking Down Popular Price Action Strategies (Smart Money Concepts and ICT Trading) - Tradingriot.com [Internet]. [cited 2023 Mar 24]. Available from: https://tradingriot.com/smart-money-concepts-ict/