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I can’t think – Part 6 – Making use of Subconcious thought

By September 29, 2011February 2nd, 2024Active Investor Psychology secrets, Uncategorized

It is very often the case that creative decisions and ideas tend to arise when our brains are left alone to quietly digest information by applying subconscious thought to a problem at hand. It is very difficult to think creative thoughts when our brains are being deluged with a never ending stream of data and information. According to Joanne Cantor, author of the book Conquer Cyber Overload, it is very difficult to arrive at any “wise” decisions if we are under a constant deluge of information. Harder still is the ability to use additional, ‘old’ or stored information to assist in the decision making process. She argues that we need to constantly pull back from the flow of information to which we are exposed, thus giving our brains a rest and allowing our subconscious to integrate new information with existing knowledge in order to make connections and join some hidden dots. A constant focus on the new and most recent information denies our brain the ability to process information and ideas at a subconscious level.

An information glut tends to impair the subconscious decision making process in two main ways. When faced with an overwhelming amount of information related to a complex decision we tend to default to the conscious ‘mind’, overanalysing the information and feeling paralysed by the weight and amount of information at hand. Secondly, the subconscious mind, when given the chance, can ignore some information that it knows to be un-important to the decision at hand. But when overwhelmed with information it finds it hard to process away the information that it can ignore. The amount of information available online exacerbates these issues enormously as people seek more and more information on a subject before attempting to make a decision. The end result is more confusion and lack of quality decisions in place of allowing the subconscious to quietly process the information at hand – information quality versus quantity.

In a research experiment conducted on MBA students in the US, two groups were asked to choose a share portfolio. One group was inundated with information from analysts, the financial press and other ‘experts’, whilst the second group was only given information on price changes. The second groups return was almost twice that of the first! Not only that, but the level of buying and selling activity in the first group was significantly higher as they bought and sold shares in reaction to news events, tips and other sources of market noise.

Pretty compelling evidence for the need to have a well structured trading plan that allows you to stand back from the noise of the market, stick to your rules, allow your subconscious to process the information and then act on it decisively when you have a call to action.

This brings an end to the “I can’t think” journal posts. I hope my previous articles have helped you understand the process of which our brains actually process information. Let me say that NO human being on the planet has ever arrived at the market with the correct mindset. Obtaining the correct mindset requires each of us to build skills and processes that eliminate the noise and information that is expelled by the media, broker reports, tippers and the like. We each need to devise a rigorous strategy with an edge and then be focused on executing that edge with consistency and objectivity.


  • David Payne says:

    How true. Overtrading is profitable for Brokers moreso than the individual Trader. Unwavering confidence in, and execution of, an objective trading system with edge, are keys to Trading.

  • Gert Lamprecht says:

    Excellent, thought provoking series of articles, Gary. I thoroughly enjoyed them. Deep stuff!

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