Want Bigger Investing Profits? Try Using Your “Whole Brain”

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We’ve all heard of super-smart people.

And if truth be known, I always experience a little “brain-envy” when I hear about them. For example, Babe Ruth was tested by two Columbia psychology students.

They discovered that the Babe’s brain worked at 90% efficiency, compared to the 60% efficiency measured for most of us humans.

I would be oh-so grateful if my brain would kick-in with a few brilliant thoughts 30% more of the time.  Still, I say that with only a partial tongue-in-cheek attitude.

Because I’ve learned in my studies over the past two years that we can—if we choose—use much more of our brain and use it far more efficiently.

Problem is, we humans like to be comfortable.  And as such, most of us are content to use the same areas of our brain as the chief “go to” zones for our thoughts, decisions and actions . . . over and over again, all day, every day. In so doing, we ignore accessing the other parts that could offer up new and rewarding opportunities. 

My colleague and neuroscience specialist, Diane Alexander, agrees. “Not using all of our brain’s capacity is comparable to someone living in a ten-bedroom house, but using only two of those bedrooms,” she notes.

“Some of the other eight bedrooms may be furnished with finer furniture and richer views, but that resident will never enjoy or benefit from them.”

0624_brain-stock-market-ticker_397x278Just so, we all have the capacity of using a much bigger capacity of that three-pound organ that dwells beneath our skulls. And once we learn how to use more of our brain, we will be surprised and gratified at how this can improve our investing profits and indeed, other parts of our lives.

First, let’s look at the different parts, or quadrants of the brain. You’ve probably heard of the “left brain, right brain” model created by Roger Sperry in the 1970’s.

Sperry’s theory determined that people who operate from the left side of the brain were considered to be logical and analytical, while those who process life through the right side were thought to be creative and people-centered.

In 1981, however, Ned Herrmann, a physicist by training, and the Manager of Management Education at the General Electric Co., took Sperry’s model to a new level, or the “Whole Brain” model.

Using his own research, as well as elements of studies from Sperry and other neuroscientists, Herrmann discovered that the brain perceives and processes information from four quadrants.

The quadrants include the two halves of the cerebral cortex (the upper part of the brain) and the two halves of the limbic system (the mid part of the brain).

Herrmann’s research also contended that ninety-seven percent of the people on Earth tend to approach their lives using one to three quadrants of their brains, or less.  Only 2.5% of us naturally use all four quadrants of our brains on a regular basis.

Note Herrmann’s Whole Brain Model diagram, below.

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Whole Brain Model—Four Quadrant Model of the Brain

This Four Quadrant Model clearly shows that we each have four “rooms” we can visit in our brains that will help us to develop a higher level of thoughts, more insightful decisions and more effective actions than we thought possible—not only in our trading and investing, but in each nook and cranny of our lives. We simply have to consciously decide to access these quadrants and focus on strengthening them.

For our purpose today, let’s take a quick look at each of your brain’s quadrants and discuss how you can use them to improve your stock market results.

  1. Quadrant A: This is the quadrant in you use to research market fundamentals and evaluate analyst’s reports, analyze price charts and indicators, and study financial books, newspapers, and websites. I think you’ll agree that all investors and traders need to spend time in this quadrant.  But, what if just the thought of researching a company’s fundamentals makes your eyes (and brain) glaze over? Try this:  Dedicate 15-minutes, five days a week, to reading news or reports targeted to new positions you are considering, or those that pertain to your current positions. At the end of the week, you’ll have two and one-half extra hours of research under your belt—research that could result in decisions and actions that increase your profits.
  1. Quadrant B: If being organized soothes your soul, you may enjoy developing and implementing a step-by-step approach to entering and exiting positions, and maintaining up-to-date records. But if the sight of a spreadsheet gives you shortness of breath, please take a pause and remember:  Good organization in both planning, risk-management and record-keeping is key to pocketing juicy profits in the market.  As Benjamin Franklin said, “If you fail to plan, you plan to fail.”
  1. Quadrant C: Trading and investing don’t have to be lonely occupations. You can cultivate the social aspects of the market, such as participating in chat rooms, communicating with other traders and investors online, joining an investment club, or attending a financial conference. And here’s a brain bonus:  Our brains need social support to function at their highest levels. When we connect with others, we release oxytocin, a “feel good” chemical that calms our minds and reduces stress.
  1. Quadrant D: If you view the markets primarily from this quadrant, you surely enjoy coming from a “big picture” perspective. You probably like to conceptualize the potential growth of sectors or companies. You may also find that identifying price patterns on charts comes easily to you. Since the market is a forward-looking (and thinking) vehicle, all of us would do well to occasionally climb out of our usual information “ruts,” and widen our horizons into other areas of the market. Try checking out financial publications that you’ve not read before, or spend a few minutes exploring areas of the market new to you, such as forex or bonds. Who knows, you may trip over an exciting new opportunity.url

Babe Ruth evidently used his brain more efficiently without any effort on his part. But with a little determination, we can climb to his level. When we consciously chose to use our “whole brain,” by consulting our brains’ different quadrants, we will find that we earn bigger profits in the market and enjoy a fuller, more satisfying life.

Until next time,

keep green on your screen!

Toni Turner

Toni Turner is the President of TrendStar Group, LLC, is an accomplished technical analyst as well as a popular educator and sought-after speaker in the financial arena.

She is also the author of best-selling books: A Beginner’s Guide to Short-Term Trading, Short-Term Trading in the New Stock Market and Invest to Win: Earn and Keep Profits Bull and Bear Markets With the GainsMaster Approach, co-authored with Gordon Scott, CMT.