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Psychology and trading / The color combination in the charts.

trading psychology

Trading psychology.

Trading psychology is one of a series of blogs I will be writing in the near future.

“The Forex Scalper”

Let’s start with number one the color combination in the charts.
And why is this an important topic and should we take it into account?
In this blog I am going to explain all this to you and at the end you will understand exactly what I mean.
We as humans have a psychological attraction to colors, red often indicates danger in a psychological way.
And green and blue, for example, are two positive colors.

Colors can arouse a certain emotion and this can of course be different for each person.
For example, you can make associations with color through culture or perhaps something you have experienced in the past. All in all, colors give off an emotion to people.

Emotions and color. / Trading psychology.

Our brain is wired to pay attention to objects that are of a contrasting color compared to its surroundings. It helped our ancestors to find food, or to notice potential dangers and hazards.
Also, in the animal and plant kingdom, bright colors serve certain survival functions such as reproduction and protection.

Colors are unarguably a valuable marketing tool. However, the question is: are some colors better for specific purposes? Let’s find out how you can leverage the effects of color on behavior.

Colors and their emotional associations are rooted in our cultural upbringing. They vary among cultures. In English, you are green with envy, in German yellow (gelb vor Neid sein). Purple is often associated with wealth, royalty and nobility. In Thailand and Brazil, purple is the color of mourning, however.

Also, within a culture, there can be differences, depending on the situation. Red can represent romance in a flower shop (red roses) or violence and unfairness during a football match (red card).

Color of neutral? / Trading psychology.

trading psychology

But what exactly does this have to do with the charts? And its colors?
Now that we know that colors can evoke certain emotions in people, this will work the same way in the charts.
There will of course be a difference, I mean one trader will be less bothered by this than the other.
But a lot of revenge trading or trading against your plan and so on can be avoided by keeping your charts neutral.

Let’s look to the color combination of for example the bottom chart here with regard to US30 first of all I will show you a color chart in which most trades have a lot of emotions, red and green it can make you decide to do a trade faster for example than you actually want to.
I am not saying that every trader is like this, but especially the beginning and even the advanced trader can find that bit of emotion in this.

trading psychology

trading psychology


You will find a chart I call them a black on black chart, it shows little to no emotions for many, there is no color incorporated in the chart so you take the piece ”bullish” buyers / bearish ”sellers” completely away.

psychology and trading

trading psychology

One is not the other, so this is really unique for everyone.
So changing the colors what is nice for your eye and especially with your psyche is key here.
If you have problems with this, I will definitely advise you to use a chart without colors and see if this improves your trading.

I also show the outcome of images above, of course in color and neutral.

psychology and trading

trading psychology

Conclusion.

Don’t be guided by emotions and/or psychological aspect in trading this is something that usually grows with time.
The message in this message if you find yourself in this above message it might be an idea to change your color combination.

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About Author
Kevin The Forex Scalper

Welcome to my author blog. With over 12 years of experience in the financial markets, Trading is more than a profession for me; it's a passion that has fueled my curiosity and determination. Over the years, I've explored various trading strategies, dabbled in different asset classes, and navigated through the ever-evolving landscape of technology and innovation. Through it all, I've witnessed firsthand the transformation of the financial industry. My mission is to share the wealth of knowledge I've gained over the years with you, my fellow traders and aspiring investors. Whether you're a seasoned pro looking for fresh perspectives or a newcomer eager to understand the basics, you'll find something valuable here.

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