Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 4 - Technical Analysis
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 5 - Psychology
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 6 - Risk and Money Management
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Human interaction with the external world occurs through five sensory channels known as:

  • Visual (Sight)
  • Auditory (Hearing)
  • Kinaesthetic (Feeling)
  • Olfactory (Smell)
  • Gustatory (Taste)

However, your five senses are also used in the internal world of your imagination, either consciously (such as when an Olympic sportsman or sportswoman mentally rehearses winning a gold medal) or subconsciously (such as when you have a dream which at the time seems real). What this means is that the imagination is a powerful tool which has the potential to change our personalities, our characters and our lives either for the worse or for the better. The reason for this is because the human nervous system cannot differentiate between actual experiences and imagined ones, which can be proven very simply using the following exercise:

Close your eyes, and visualise a bright yellow lemon in front of you on a table, next to a sharp knife. Reach out and feel the texture of the pitted skin, then bring the lemon out to your nose and inhale the fresh citrus scent deeply. Then place the lemon down on the table and imagine cutting it in half with the knife slowly – feel the pressure of the lemon as you push the knife through. Then take one half, bring it up to your knife, then sink your teeth into the fresh, zesty lemon slowly…

If done correctly, this simple yet effective exercise will illustrate just how powerful the imagination is in generating sensory experiences without any external stimulus – sometimes to the extent of making your eyes and mouth water as you imagine biting into the lemon! Therefore, the repeated use of the imagination can be used by a trader to generate the experiences you wish to create in real-life during your trading.

Imagination plays a far greater role in our lives than most of us realise, we act, and feel not according to what things are really like, but according to the image our mind perceives.

We have certain mental images of ourselves, our world, and the people around us, and our behaviour will act as though the images we have are the truth, and reality, rather than the things they represent.

Therefore, it makes sense to understand that if our ideas and mental images concerning ourselves are distorted or unrealistic, then our reaction to our environment will likewise be inappropriate.

When we accept and realise that our actions, feelings, and behaviour are direct results of our stored images and beliefs, it gives us the psychological switches needed to change personality.

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