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What is Neuroplasticity and How Does it Apply to Traders in the Financial Markets?

At the most basic level, neuroplasticity is our brain’s ability to change from new experiences, learnings, thoughts and actions.

trading paradigm update your neural pathways

The building blocks of the brain and nervous system are nerve cells called neurons that act as messengers, carrying information in order to communicate with our sensory organs, muscles, and other parts of our body. There are over 85 billion neurons in our brain which have the ability to be shaped and re-organized to form new pathways. These pathways can become stronger with repetition or weaker with lack of use. Our brain even has the ability to create new neurons through a process called neurogenesis. In other words, we actually have the ability to change our brain’s physical structure by interrupting old thought patterns and adding new ones.

Early researchers wrongly believed that the human brain was fixed shortly after birth (some time between infancy and childhood). But research has proven that the brain is extraordinarily flexible at all ages. Our childhood is full of formative years when we’re essentially being programmed and conditioned, and at some point when we finally reach adulthood we start to think it’s close to impossible for us to change. We have thoughts like: “This is just how I am”, “I need to stay true to myself” or “He/She was born that way”.

But the reality is that people can certainly change, especially if they consciously point their mind in the direction of their goals. Over time, we mindlessly develop automatic thought patterns and habits through repetition. But with purpose and dedication, we can take an active role in eradicating our bad thought patterns and reinforcing good ones. For most of us, our old selves (thought patterns, behaviors, habits, perceptions, beliefs, etc.) aren’t capable of achieving our goal (becoming consistently profitable traders).

Everyone is Wired Differently – Your Brain is the Hardware, But You Feed it the Software: 

It’s important to realize that everyone is wired differently. We have our own individual circumstances and experiences, and our perceptions and reactions to those circumstances and experiences can vary drastically. Why is it that one person can view a particular experience as painful and reason to give up hope, while another person can view that same experience as a challenge and motivation to grow? They’re presented with the same information, yet see the information from completely different perspectives. It seems like it’s not the events themselves that shape us, but rather our beliefs about what those events mean. Take a minute or two to think about a few times in your life when a particular event happened and your own personal perspective on it was completely different from somebody else’s you knew – I’m sure you could name quite a few.

Ray Dalio Principles Wired Quote

Throughout life, we’ve all formed our own insecurities, bad habits, biases, and defense mechanisms based on our own interpretations of various events and information. Unfortunately, we may not even consciously recognize the existence of many of them. These negative thought and behavior patterns have become such an automatic process in our brain that we barely, if ever, take notice of them. But that doesn’t mean we can’t change them if we want to. We just have to consciously work at it. The source of change is within us (our brain) and we just have to feed it better information (positive, empowering information related to our goal). So before proceeding, take some time to think about your own personal insecurities, bad habits, biases, and defense mechanisms that you would like to adjust or eliminate. Self-awareness is the first step in changing our disempowering attitudes and beliefs.

3 Steps to Facilitate the Rewiring Process – Train Yourself to Think Differently:

1. Adjust Your Self-Image

Regrettably, most people’s mental portraits of themselves are negative and distorted. We tend to dwell on our negative experiences of the past, and all too often consider ourselves losers or victims because of it. So take a few moments to consider how you typically talk to yourself – what’s the inner dialogue like? Is it positive and uplifting or negative and discouraging? Are you holding yourself back with negative thoughts and beliefs? If it’s mostly negative, then it’s time to replace those negative thoughts with ones that are more encouraging and validating. Have you had experiences of achievement in the past? I’m sure you have. Everybody has. So use them now as motivation. Imagine that “winning feeling” for your future that you’ve already felt in the past. Start dwelling on the positive, desirable goals you want to achieve instead of the negative, undesirable fears holding you back.

Now is also the time to forgive yourself for past mistakes and failures, and move on constructively. Also, take a close look at your life and realize where you’re placing conditions on your happiness: “When I turn 18, I’ll be happy”, “When I get married, I’ll be happy”, “When I pay off my mortgage, I’ll be happy”, and the list goes on and on. This type of thinking is nonsense, so release the attachment to happiness you have with them. Happiness isn’t a destination. It’s a lifestyle. You have to choose to live it. You might be thinking right now that all this positive self-talk seems silly, but think about how neuroplasticity can eventually cement these thought patterns into your mind. The more we actively practice having these positive thoughts, the more we condition our brain to think this way in the future. With repetition, new neural pathways will form and strengthen, while the ones we don’t reinforce or use will weaken and die. Over time, we can replace our old negative thought patterns with new positive ones. Negativity is no longer the default.

2. Use Visualization and Imagination to Describe Your Goal to Your Brain

In order to become a new and improved version of ourselves, we must vividly describe the new paradigm to our brain. Providing a detailed picture of who we want to become and what we want to achieve will direct both our conscious and unconscious mind toward that goal. If done correctly and with enough conviction, our mind will always be on the lookout for any information that can help us achieve the changes we want. Just think about the many great ideas that have come to people when they were doing something seemingly unrelated to the problem they were trying to solve. They described the problem so frequently and vividly to their mind that the answer came to them when they weren’t even consciously thinking about it. This is the unconscious mind at work. We just have to learn how to direct it. Where our focus goes, our energy flows.

If we constantly remind ourselves of our goal and visualize it vividly, it puts our entire being on the lookout for anything that can help achieve it. As crazy as it sounds, we should also imagine as if we’ve already achieved it. Our unconscious mind doesn’t know the difference between imagination and reality, so even just imagining that we’re already the person we want to be and achieving our goals can have a positive impact. There are many instances in which people who visualized correctly performing a specific task before actually doing it were able to execute it at a much higher level than those who didn’t take the time to visualize it at all. This proves that pure mental practice can sometimes be just as good as physical practice. Our brain is essentially interpreting our mental imagery as equivalent to to the real-life action. So if we simply imagine ourselves trading with a calm and composed demeanor, following our rules with discipline, and being consistent in our overall approach, then it will greatly benefit us when the real time comes.

3. Link Pleasure to Changing and Pain to Not Changing

What ties everything together for long-lasting success is our ability to attach pleasure to changing in order to become the new version of ourselves (a consistently profitable trader) and attach intense pain to not changing (staying an inconsistent, impulsive, and unprofitable trader). Some people link so much pain to changing, no matter what the situation, that no changes ever stick in their lives. But if they actually took the time to review the impact of changing vs. not changing on themselves, it would bring quite a bit of clarity to their situation. Take smokers, for example. They’ve made smoking a habit because it brings them a sense of momentary comfort, gratification, and stress relief. But then there are all the rather obvious negative aspects of smoking that include the cost, smell, and long list of health risks, among other things. So why do smokers continue to smoke even when they know the negative effects of it? It’s simply because they view changing as more painful than not changing. If at some point, however, they’re able to internally switch to it being more painful for them not to change, then lasting change becomes a real possibility.

They key to linking pleasure and pain effectively is with our own internal pressure. It can’t come from external sources. We have to make a real decision within ourselves and commit to achieving the result we want. If you’re currently an inconsistent, struggling trader and you want to become a consistent, thriving trader, you have to figure out within yourself what you’re going to do about it. Do you think changing your mindset is painful? What about the pain of not changing your mindset? What will it cost you emotionally and financially? How will your success or failure impact your family? What kind of momentum can the change create in your life? How much happier would you be after achieving the change? After answering these types of questions for yourself, you can see exactly what your deep-down desires and fears are. If we can associate a tremendous amount of pain to staying the same and exceptional pleasure to becoming the person we want to be, then we have a great chance of making a permanent change. But if we choose not to change, we’ll continue to get the same results. In nature, stagnation leads to dysfunction, disease, and death. The ultimate secret to success and happiness is consistently making progress toward our goals.

Mindfulness Meditation – Another Powerful Force in Rewiring Your Brain:

Most people approach mindfulness meditation with resistance and confusion at first, but soon realize that there’s no better activity for questioning their beliefs and becoming more self-aware. There’s a misconception that it’s religious, but it’s simply brain exercise that’s strongly backed by highly-regarded scientists, therapists, business leaders, and many others. It has been proven to reduce stress, anxiety, and depression, and improve focus, self-control, and creative thinking, among so many other great benefits. Having a consistent meditation practice is essential for successful traders, and best of all, it’s simple and free.

Top Rated Trading Mindset:Psychology Course

The point of mindfulness meditation is to focus inward, usually on an anchor like your breath. The idea is to relax and quiet the mind, but you’ll never be able to quiet the mind completely. Thinking is a natural function of your brain, so as thoughts pop up, we want to detach from them and become objective observers. It teaches us that even though we’re constantly having thoughts, we don’t have to identify with them, especially if they’re flat-out wrong, negative, or disempowering. A lot of people think it’s about suppressing thoughts completely, but it’s actually about becoming more aware of them, detaching from them, observing them without judgment, and then bringing our attention back to our anchor (in this case, the breath). There’s a sense of calmness that comes over you as you take measured and consistent breaths. You become more present, non-judgmental, and equanimous. All traders should sincerely commit to a consistent meditation practice in order to experience the benefits.

Trading is a Mental Discipline – You Either Control Your Mind or it Controls You:

Most people sacrifice what they want most for what they want now. In other words, they sacrifice their long-term goals by giving into their short-term emotional impulses. Just think about how many people you come across on a daily basis with their heads buried in their phones. Most likely interacting on some sort of social media platform mindlessly scrolling through feeds or desperately hoping for comments, “likes”, or “thumbs up” on their posts. Although some people don’t even realize it, these platforms are benefiting from our intense desire for short-term gratification. But giving into these short-term emotional highs comes at an extraordinary price. It’s less time and effort we have to put into the things we actually want long-term . Our ultimate goals and dreams become distant thoughts until eventually they’re completely abandoned.

what you want most consistent trading

But if you want real change to occur in your trading operations, or your life in general, then it’s time to raise your standards and change your beliefs. We don’t have to allow our programming of the past to dictate our future. If you’re a human with a functional brain, then you’ve been engineered for success. The tools are already within us (brain, neuroplasticity, neurogenesis, etc.) – we just have to feed ourselves the proper information related to our goals. Our thoughts, emotions, and behaviors are all habits which means they can be changed. So we don’t have to go through life believing everything others have said about us or even what we’ve said about ourselves in the past. It’s time to break through the ceiling of “who you are now” to “who you are becoming”. There’s no doubt that all breakthroughs happen from a change in attitudes and beliefs. This type of emotional mastery can help you improve every single aspect of your life (spiritual, physical, financial, etc.). Overall, life is all about problems and overcoming challenges. View them as opportunities to become stronger. It’s not about perfection. Take action, make mistakes, and course-correct as you go. If you’re not making mistakes then you’re not doing something worth doing. The ultimate joy in life comes from personal discovery and development.

But it’s not enough just to understand how to make positive mindset changes. You have to apply the information in order to see results!

Learn More in the Trading Success Framework Course

Written by Matt Thomas (@MattThomasTP)

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Matt Thomas

Founder of, Creator of the Trading Success Framework Course & Trading Paradigm Skool Community, and Intraday Futures Trader Using Auction Market Theory & Profiling (Volume & Market Profile).


  • Miriam Mechelli says:

    This beautiful article on how neuroplasticity enables better trading results is one of my favorite aspects of behavioral finance. It is never enough to be able to remind people of how our mind is affected by all the programming that we undergo in the course of our life, but that our power can change them. Information like this are very important to educate people to improve their lives and to know the functional aspects of the mind, in order to be able to use them to our advantage.

    • Matt Thomas says:

      Hi Miriam – I appreciate your kind words!

      When it comes to trading/investing, people don’t often realize how their mindset/psychology impacts their results. And without a certain level of self-awareness and self-control, these impacts are often negative. Due to our inherent biases and mental programming, we’re just not naturally built to perform effectively within the dynamic, limitless, and uncertain market environment. But the good news – as you mentioned – is that we all have the ability to change our mental/market frameworks if we choose to. It takes work, but it can be done. It’s much easier to default to our old habits that are deeply ingrained, but we have to evolve if we want to achieve long-term success as traders. Take care!

  • Bernard Breytenbach says:

    This whole article is the truth. A person can change or rewire their brain depending if you are willing to change and let go of stuff that is holding you back. I know as in my life I have been through different chapters in my life and I am shocked how much I have changed by having a set of goals I want to achieve and having a never give up attitude. Many people tend to give up and accept where they are in life. For me, I challenge myself every time to improve and be successful. Of course, a roadblock will appear, but it is a test to see how you will handle it. 

    When you want to change and a obstacle appears, remember to not give up and always try to find a way to pass through the obstacle no matter what it is in your life. You are in control and of course God, but remember God gives you the free will to decide what you want to do. Thus, you can achieve anything so long you strive and fight for it.

  • Nettie says:


    This is such an informative article, and I have learned so much!  I am into trading stocks, and I can see your article fitting in to any person’s neurological make-up, and giving everyone helpful strategies to change our way of thinking.  

    In the section “3 Steps To Facilitate The Rewiring Process – Train Yourself To Think Differently”,  I especially liked the Step entitled “Link Pleasure To Change and Pain To Not Changing”.  In the past, I never cared much for change.  I guess it was because I was comfortable performing things the same, familiar way.  After reading your article, I am going to look at change as a pleasurable learning experience, and not something to dread or be afraid of.

    • Matt Thomas says:

      Hi Nettie – thanks for your feedback!

      Linking pleasure to positive change and pain to staying the same is especially critical at the beginning of the change process because our minds will try to trick us into thinking change is painful. Just think about any habits you currently have, like maybe the route you might take to work every day, for example: the thought of taking a new route will probably come with resistance. Even if that new route is better, it’s not what you’re used to. You’re comfortable with the old path.

      This is one of the major reasons why change seems so hard. It takes a lot of grit and resilience to break through that initial level of resistance that we tend to perceive as “pain”. But it’s really just growth – it’s our brain making new, stronger connections, while weakening old, ineffective ones. So we have to be aware of this phenomenon and have a plan in place to counteract it. Take care!

  • LineCowley says:

    This is a fascinating connection between neuroplasticity and trading. Knowing that we can train our brain is very empowering. I love the way in which you say that we must not let the past dictate our future. It is a bit like driving your car forward, but through looking in the rear view mirror. 

    Meditation is very powerful and something that I had not considered as important for successful traders. This is a wonderful reminder that we are never too old to learn new things.

    • Matt Thomas says:

      That’s a great analogy about trying to drive a car forward by only looking in the rear view mirror – I like that. We can certainly learn from the past and move forward, but ruminating/living in it won’t help us. Especially when it comes to trading, which requires full concentration in the present/now moment in order to think clearly and execute our plans appropriately.

  • AL. S. says:

    This is an interesting article because it marries stock trading with neuroplasticity. The information that you put forward here would apply to more than just stocks, this really applies to all aspects of your life. You really do create your own world depending on what you feed your brain. If you constantly feed it negative information about yourself and your surroundings, you will eventually make those thoughts into a reality. Like you said, when you and describe the goal to your brain you are automatically tuned, and looking for ways to make the goal a reality, the converse is true as well, if you constantly feed the brain negative and destructive images and imagery, you will be drawn to that as well.

    • Matt Thomas says:

      You’re 100% right, Al! Neuroplasticity is an amazing concept because it applies to changing our mindset (thoughts, emotions, perspectives, etc.) in every aspect of our lives, not just trading. So many people think they have to stay stuck in their current ways of thinking, feeling, and operating, but the truth of the matter is that it’s certainly possible to change with enough intention, discipline, and repetition. We tend to get blinded by our own unique perspective thinking it’s the ultimate truth, but that’s not necessarily the case. We have to be much more objective and flexible, and use the amazing tool of neuroplasticity to our advantage by creating a mindset that serves us instead of hurting us.

  • Kokontala says:

    This is an amazing combination of neuroscience/trading. The concept of neuroplasticity is incredibly empowering – knowing about how our brain’s building blocks transmit information throughout our bodies, how to get rid of bad habits and develop new ones, how to change our perspectives and behaviors, etc. Many people still don’t understand how their brains operate and the impact it has on all of our thoughts and actions.

  • Alex says:

    As someone who has studied Neuro-Linguistic Programming and trading, I love this material. 

    I am a huge believer in hacking your mental makeup and love the bit about anchoring pleasure to change and pain to the lack of change. This is so valuable as most people gravitate to a dislike of change as they mature 

  • Alex says:

    Hello Matt! In my opinion, neuroplasticity is the ultimate key to success. Too many people live their lives thinking that their skillsets and aptitudes are fixed and somehow they can’t rise above themselves. From what I’ve seen, if you train yourself constantly to learn something, sooner or later you are going to become really good at it and that works not only for skills but mentality itself, which you exposed brilliantly in steps for rewiring process. I’m glad you are sharing this message worldwide
    I look forward to your next post!

  • Zayom says:

    Neuroplasticity works this way; We know that the neurons communicate with each other using electrochemical signals. These signals are transmitted through a structure in the neuron called the synapse. Stimulating the neural pathways through a repetitive, memory-forming cognitive function. Additionally, the brain has the ability to create new synapses. While neuroplasticity can occur naturally as we undergo different experiences, changes in the brain can also be activated through neuroplasticity exercises and cognitive training.

  • Connie says:

    WOW – AMAZING – yes, this makes so much sense.  Everything you wrote here is Exactly what I believe to be true.  You hit all the buttons, Self Talk, Your Image of Yourself, Retraining your Brain to look for accomplishments instead of failures – one quote I love is “The Past Does Not Equal The Future” I heard that from Anthony Robbins and it sure has stuck with me.  You Really Can Change Your Life – You are in control of a good portion of what your life is – generally speaking.  Another thought I keep in mind is My Body Will Follow My Most Dominant Thought.  It cannot do anything but.  I really think your article hit a ton of awesome points and anyone not familiar with these types of Self Help Tips, should look into it further.  It can for sure make you a better Trader, A better version of yourself.  Thank You for reminding me – I love reading things that remind me of the way I want to live my life and train my brain.  


    • Matt Thomas says:

      I appreciate your input, Connie! There’s so much truth to the saying: “we are our thoughts”. We essentially live out our thoughts, good or bad. If we’re constantly telling ourselves that we’re losers or failures, then it becomes a self-fulfilling prophecy. Having these negative thoughts will make us behave in ways that are consistent with the ways a “loser” or “failure” would act. But the good news is that this process works with positive thoughts as well. We just have to direct our mind with positive and empowering thoughts instead, and as a result, our behaviors will change to become consistent with those new thoughts. And believe it or not, our behaviors can also have an impact on our thoughts. For example, if you smile you’ll have an extremely difficult time having negative thoughts. When you smile, your mind automatically searches for happy or funny thoughts. This is really powerful stuff that most people just ignore or don’t even believe, but it can have a positive impact on trading or any aspect of life.

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