NeuroInvesting: Build a New Investing Brain

CHAPTER 3

Impulsiveness and Our Brain

DOPAMINE AND THE REWARD NETWORK

It's not me, it's my brain! My brain told me to do that!”

Perhaps, when it comes to our impulsiveness, we choose an easy way to deny responsibility. We can point our finger at a certain part of our brain: the emotional brain. The emotional brain, fueled by its neuro-colleagues, is the engine room of both impulse and impulsiveness.

How does it work, and how do we make it do what we want it to do?

Impulsiveness and Dopamine

Our brain is a happy brain. It's filled with a flow of chemicals to help us feel positive and happy, giving us the blips of thrills and excitement we need once in a while but also capable of impelling us toward impulsive acts.

Dopamine is responsible for our feelings of love and excitement. A healthy dose keeps us balanced, at work and at play. Too little causes loss of zest, poor judgment, and loss of interest. Too much, on the other hand, causes overzealousness, addictions, and temporary overoptimism, playing havoc in life decisions and in investing.

Dopamine released in our brain is often triggered when the activity, reward, or sensation is being experienced. But it's so sensitive and alert that even the anticipation of such a feeling is sufficient to activate the release of this chemical in our brain. It's like the expectation of a hug, the sight of chocolates, or, for traders, the discovery of a strong uptrend on a price chart, are enough to induce the production of the dopamine chemical ...