Why Visualizing Your Trading Profits is Vital to Success

Winsor Hoang  |

There is a saying: “if you can think it, you can do it.” And it is very true. However, it’s not simply thinking that will help you get better results, but actually seeing yourself do it. This act of seeing yourself do something in a realistic manner is called visualization. Done regularly, in an effective manner, visualization can help you produce better results as a Forex trader.

What is Visualization?

To visualize is to mentally practice or train yourself towards a goal or task. When someone visualizes, they mentally put themselves into the situation or goal allowing the mind to go through the steps and/or emotions that they would have to endure if it were happening in real life. For example, an Olympic athlete will visualize themselves on the podium with the gold medal around their neck. Or they will imagine themselves going through a game plan, scoring goals or blocking the shots of their opponents. The athlete would mentally set themselves up for each step of their desired goal as well as the emotions felt before, during and after each goal. Now, while visualization is typical to the sports world, it can work for virtually any goal including increasing your Forex trading profits.

Why Does Visualization Work?

Practice is practice. When we practice something, we strengthen and reinforce the neural pathway that helps us complete that task. The more you practice something the easier it becomes to do it. It becomes habitual. Thus when you visualize yourself making confident trading decisions, you reinforce the neural pathway that would take the action in real life. In other words, you are training your mind to take a certain course of action and the more you train it the easier it will be for your mind to focus on the action, and the desired emotions required to complete the task.

The mind is a powerful tool. It not only lets us complete tasks, but it helps us complete those tasks better. When a trader visualizes the process of trading before he begins by mentally putting himself into each and every step, and focuses on obtaining the desired results, he is letting his mind guide him to accomplish those steps with more confidence and ease.

How Can Visualization Help Your Trades?

For a trader to enter “the zone”—the place where trading is natural and not rot of emotional hurdles, the trader must be in a relaxed state. Traders are usually on edge when they trade, and no one can blame them. After all, they are putting their finances on the line and no one likes losing money. This anxiousness can be seen in physical symptoms such as increased heartbeat, heavy breathing, headaches, tension in the muscles and in extreme cases stomach pains and nausea. A trader will also experience emotional symptoms due to their unrelaxed state: nervousness, anxiety, second guessing, and impulsive decision making. All this leads to making trading mistakes that can ruin your account. Visualization can eliminate these negative symptoms by helping the trader relax. A trader will mentally practice each move, but they will also visualize themselves being calm as they make their trading decisions, and this will help them make better real-life trading decisions.

To be able to put it into practice however so they can make good trades a trader needs to know how to visualize. Below is a general process a trader can use to help them visualize so they can stay calm and make better Forex trading decisions.

1. Relax and Block Out Distractions

In order to effectively visualize, your mind must be free of distractions so it can focus on the mental practice and the goal. You also want to be as relaxed as possible. To do this, find a comfortable and well supported chair or sofa, and take a moment to become aware of your body. Start with your forehead and make your way down until you reach your toes, taking mental notes of any areas of tension and being aware of your breathing and heart rate. Once you have done the quick scan of your body, from head to toe, interrupt your normal breathing pattern to do some breathing exercises. To begin, hold your breath for about 3 seconds then release the breath until you have nothing left. Now, take a big deep breath in and hold in your diaphragm for about 10 seconds. Release this breath slowly, allowing it to leak out similar to the way air leaks from a tire. Some people may need to count as they exhale, in order to keep it gradual and to stay focused. Repeat this breathing process 10 times. You may find it helpful to imagine yourself in a relaxing environment, such as a beach. Some find it helpful to imagine themselves being massaged. The goal is to release the tension in the body, especially in those places you noted earlier, and enter a relaxed state.

2. Get Yourself Focused 

At this point, you should be feeling less tense and this is a great starting point, but you want to take this a step further. You don’t just want to feel less tense. You want to visualize a more relaxed version of you each and every time you trade. You want to get to a point where you aren’t just doing breathing exercises after a stressful trading day, but instead entering the office and sitting at your computer as a calm cool and collected trader. Your mind has to be able to create, develop, and believe in this super relaxed version of you who is focused and ready to trade. Therefore, visualize yourself confidently entering your office and taking your seat. Visualize yourself looking at the overnight market activity and relevant newsflow. Let your mind practice updating charts, checking your positions and using all this data to formulate the day’s game plan. Watch yourself do all this as the confident, focused, and relaxed version of you.

3. Get in the Zone

Keeping focused on the relaxed version of you; visualize yourself going through a trading day. The markets are open, your positions are open, and you’ve identified potential setups. Visualize yourself making a successful trade where you have checked your criteria against the system, you have monitored the position, and once it reaches the profit level, you calmly and unexcitedly take the position off. Visualize a losing trade. Watch yourself monitor the market and seeing it reach your stop loss position. As the position reaches the level, see yourself close it in calm, unemotional, or anxious manner. With each visualization scenario, whether it is a winning or losing trade, focus on the calm confident version of you and always congratulate yourself on being a disciplined trader when you go through a calm, unemotional sample trade. Let your mind practice and project a believable image of you trading without the high levels of stress and tension. Add as much detail to visualization exercise as you can, such as details in your office, the time of day and each step you take as you trade. The more details you have, the more developed and focused the mental practice will be, and this will make it more effective to internalize this version of you so it becomes you.

As a manual trader, there are so many challenges that you must overcome. Practicing visualization and relaxation are some of the tools that you must master on top of improving your trading skills. Consequently, it takes years to master trading. Alternatively, you can use automated algorithmic trading as your solution. This will remove a lot of your road blocks allowing you to focus only on relaxation techniques. 

By Winsor Hoang, who is the founder and CEO of CTS Forex, a Vancouver-based automated, statistical, risk-managed FX trading system. Using his statistical and automated system design experience at Nortel Networks, RIM and Sierra Wireless, he began developing automated systematic solutions and, in 2010, after seven years of development, testing and trading his own money, introduced CTS Forex to the market. Winsor has nearly two decades and more than twenty thousand hours of trading experience. His automated FX trading system continues to produce consistent returns, regardless of market flux. Hoang is a registered professional engineer, and holds a Bachelor of Engineer from the University of Victoria.For more information visit www.ctsforex.com. Winsor’s latest book ,The Bull, the Bear and the Baboon, is available for purchase at Amazon.com, Barnesandnoble.com, as well as other online booksellers. 


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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