As you exit that losing trade with a painful loss, you curse under your breath and say "Why the hell did I make that stupid trade!!!"  You can't believe it happened again.  He just made another Impulse Trade. 

Being a serious trader, of course you have a Trade Plan with specific criteria for entering trades (more on Trade Plans here)

But when you enter a trade that has nothing to do with your Trade Plan, that's an Impulse Trade.   For many traders making  Impulse Trades is a big problem. 

The strange thing is many traders know intellectually that making impulse trades is dumb, yet they continue to do it anyway.  They seem unable to stop. What's going on here?  Why do you do it?  The short answer is that the BEAST makes you do it.

That's right, the BEAST makes you do it.  What the heck is the BEAST?  It's an appetite that originates in the biological, animal side of human nature.  It is a very real place in the human brain based on how we evolved from more primitive creatures.  The BEAST is that part of the brain that seeks pleasure but doesn't care about the consequences. And it doesn't want to wait.  It's the very same thing that compels the alcoholic to take that next drink.  In the alcoholic, the BEAST is easy to understand - it wants the pleasure of the next drink, but doesn't care about the consequences like liver damage.

Would psychologists or  neuro-scientists ever use the term BEAST?.  Of course not.  It's just a descriptive way to describe the phenomenon.


The concept of the BEAST may sound a little far-fetched, but it sure does explain a lot of irrational self destructive human behavior.  Think about the guy who engages in unprotected sex, knowing full well the consequences. Think about the severely obese person who sits down to eat a half gallon of ice cream.  Think about the kid speeding along at 95 miles an hour, knowing full well if he gets one more speeding ticket he's going to lose his license.
So what on earth does any of this have to do with trading?  In the trader, the BEAST wants the pleasure of big win, but doesn't care about the consequences of wiping out your account.  Or it just wants the excitement of the trade.

Suppose like many traders you do have some problems with Impulse Trades that have baffled you in the past.  And now maybe you're thinking: As strange as this BEAST idea sounds, maybe there's something to it. But how can this help me trade better?  Simple. The next time you're about to pull the trigger on that big trade, just pause a few seconds and ask yourself if the trade really meets all your setup criteria, or maybe it's the BEAST telling you  to act.