Look at the Below Picture What you See a Floor or a Ceiling - Optical Illusion is also called a Visual illusion is characterized by Visually Perceived images that differ from objective reality. The Information Gathered by the Eye is process in the Brain to give a perception that does not tally with the physical measurement of the Stimulus Source
The Same Illusions Are created in the Price By the Market Makers or Market Manipulators - So to understand this first we should understand How our Human Brain is Functions and what are its Limitation -
Our Human Brain First Collect the Facts and Figures and then its is Processed for analysis - this is how we make the decisions - now the second thing we should understand is that this human brain has some limitations -and everything in this world has its limitation - their is no such things which are unlimited
IF we take the Example of our Ears it has also some limitation - we can hear the Sound to a particular level of Frequency beyond that frequency if we hear it will damage our ears - Even our Body has limitation of body temperature- Below 96 degree we will die and above 110 degree we will die - so the limitation of our body temperature is 14 degree -so below or above that temperature our body does not cope with that temperature -
Now if we speak about the Human brain it has also some limitation - and in trading it is the only thing which we use so to understand trading or investing first we should understand its function and how it works - so that we can increase our efficiency as a trader or investor
When we make the Decision we make the Decision Consciously - while making decision consciously our Pre frontal cortex is working this function is activated and helps us to take the decision - Say for Example you have decided to buy Nifty - Here your Pre frontal Cortex Function is activated
The Second Function is Sensory Precortex and this part is activated when our focus is Diverted for example if you consciously decide through Your trading system that you are going to buy nifty and technically you are convinced that its a good buy Signal - Now here the market Divert your Focus By Volatility by make sharp movements like 100 Points down 50 points up then again 50 Points down - 40 points up - Now your Focus is Diverted by the Market Through Volatility and your afraid to execute your Buy Position - Because your focus is diverted
So as a Trader or investor we should work on The secondary Function that is Sensory Pre cortex and we cannot control the market volatility but we can work on our selves to improve our decision making process
Say for Example - You are learning to drive the Bike For the First time in your Life - Here your First Fuction is activated that is Pre frontal cortex - You are very Conscious about your Surroundings and then your secondary function will be activated that is sensory pre cortex where your focus will be diverted by traffic - by people - by sound - and number of things and you will fall couple of times and you will get hurt - but in this process a time will come where you will learn to ride the bike and balance it effortlessly and this balancing process cannot be thought you have to learn it by yourself and then your brain is set to auto drive - and it will not get distracted or diverted by the traffic or any sound -
So in stock market to set our brain on auto drive we have to tie ourselves with a trading system which suits our personality - and have to improve it in the process - you will not get the perfect system initially its an on going process and thus by following a system you will avoid unnecessary noise which are created by market
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