Trading NLP

Trading NLP! Does it exist? Definitely trading nlp exists and there are even books dedicated to NLP and trading.

The first question is what is NLP? According to Wikipedia

Neuro-linguistic programming (NLP) is defined as an approach to communication, personal development, and psychotherapy created in the 1970s. The title refers to a stated connection between the neurological processes ("neuro"), language ("linguistic"), and behavioral patterns that have been learned through experience ("programming") and can be organized to achieve specific goals in life.

The leading book for trading application of NLP is "NLP for Traders and investors: Personal Strategies to Give You the Edge Over Those Using Just Fundamental and Technical Analysis" by Terry Carroll.

From historical perspective NLP come with several books having more scientific perspective. The Structure of Magic I: A Book About Language and Therapy v. 1 (Structure of Magic): A Book About Language and Therapy.

Later its creators opted for more pragmatic and commercial evolution. The NLP has been simplifed and dedicated towards to ordinary public.

I think that this was partially (or mainly) the reason for the critical attitude from the scientific community. As you can read the main Wikipedia article this is the main thing that comes "According to certain neuroscientists,[3] psychologists,[4][5] and linguists,[6][7]NLP is unsupported by current scientific evidence, and uses incorrect and misleading terms and concepts."

Even more "Criticisms go beyond the lack of empirical evidence for effectiveness; critics say that NLP exhibits pseudoscientific characteristics,[14] title,[3] concepts and terminology.[6][15] NLP is used as an example of pseudoscience for facilitating the teaching of scientific literacy at the professional and university level.[7][16][17] NLP also appears on peer reviewed expert-consensus based lists of discredited interventions."[5]

OK you can read here as "discredited interventions","pseudoscience" and my favorite "lack of empirical evidence for effectiveness".

So you can ask WHY BOTHER with nlp.

I can structure my opinion as follows:


-I think that when NLP was created it was ahead of its time. As NLP is multidisciplinary (and scientists hate the multidisciplinary approach because that makes them work much harder). I think that pose a real problem of fair statistical evaluation. The reason is that it is too complex and a lot of bias can be achieved mainly by not understanding it.

-The second thing is that NLP is not science, it was developped as a technology. And NLP is technology. So NLP is not a unified scientific hypothesis as for example the Standard model in physics and if you disprove one part of the model the whole thing collapses. NLP is a set of techniques (I prefer the term psycho technology).

So my opinion is that NLP can and should be used pragmatically. That means to focus on a specific technique and approach and to see if it works or not and not to bother with the whole thing (being mostly not proved and criticisezed).

The NLP modelling

The NLP modelling for traders is probably the most central implications in practice. The reason is that trading is difficult and very psychologically demanding. And that may crack psychically even the most brilliant minds.

The ideas is to select the appropriate mind programs used by traders, to analyse them, to copy them and finally to use them.


That is the NLP perspective, in other words the most deep thaughts spoken by the masters are just words, unless you have the knowledge to implement that in practice.'

I really I am not sure but it is completely normal not to understand me for the moment.

The ideas is how to protect your self and to have a clear methodology for that.

That is why I am mostly interested in the modelling and the use of internal ressources part of NLP. The use of anchors and anchoring and conditionning is a valid scientific and psychological process. (Here again I am concerned about the most immediate scientific support and not the scientific validity of NLP in general).


Example of NLP modelling target strategy

So I would give an immediate example, otherwize it may remain totally unclear.

I was asking one trader what is his psychological attitude towards the EA optimization.

His answers is that for him that is a way to compute an optimum strategy. In that strategy the losses are a part of the strategy.

And here comes immediately a psychological strategy for dealing with the losses.

The next question was how he considers psychologically the losses?

The losses are a part of the strategy they are computed in the strategy and they are inevitable.

(So here this is not about reasonning it is about how psychologically you deal with the situation).



The next psychological test is if the losses are within the risk limits of the strategy or not and that need to be computed beforehands.



Then using the NLP you could program to follow that strategy using the typical methods that may be unique for every human being.

So here that is not the truth, that is just a technology to deal with the stress that comes from trading a EA. With the tools of NLP it is possible to incorporate that strategy without the NLP technology those are just words.