Logical vs. Emotional: The Key Difference in Pro Traders

There are two types of understanding—I'm sure there's a fancy name for them, but I call them logical and emotional. Generally, a newer trader understands all the rules and concepts they need to and can recite them, but they can't follow them as well as they would like. This is because they logically understand a concept, but it generates no emotional response in them.

Close your eyes and imagine putting your hand in a big vat of boiling water. You will feel fear or some negative emotion. Why? Because you emotionally understand that it’s going to hurt. A pro trader emotionally understands that doing stupid things hurts and has an emotional response to them. What’s happening is that the concept has become part of their subconscious. When the trader sees the opportunity, for example, to exit a position early, they find the very idea revolting.

Part of a pro trader’s makeup is that they have a different emotional relationship with trading, where concepts are not just understood logically, but are ingrained in their emotional system.