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Stress
from trading is one of the biggest killers of new traders. Most people
(I mean traders and non-traders) have little appreciation for what
they go through mentally and physically. So let's spend a little time
on trading stress and what you can do about it.
First, you only have "X" amount of energy to use in your life. Some
goes to walking and talking, some to thinking, some to play
(hopefully) and a great deal goes to managing our emotions. Once you
start burning more energy in one area, another must suffer. Many
traders feel "burnt out" after a day (or lifetime) of trading. Trading
is highly stressful and more so for the beginner. He or she has to
deal with both real and imagined attacks on the psyche, money and
emotional state. Traders burn a lot of energy in this arena, thus,
other areas (walking & talking, for instance) suffer.
What is stress? Here's an example. The Stressor - you just got whacked
for a point and half loser on a 1000 shares. You went "long" just as
you see that stock's CFO being lead off in 'cuffs. Stress Response -
increased perspiration, blood pressure, heart rate, etc. and wanting
to throw your keyboard! This is Distress or Negative Stress. It comes
in two flavors: Acute: Intense, but disappears quickly; and Chronic:
not as intense, lingers for prolonged periods of time.
Because Stock Trading is the second most stressful occupation, next to
disarming live nuclear weapons, it is essential that you learn
effective Stress Management skills! In order to deal effectively with
stress, you must understand how the stress response works.
The Model of (bad) Stress is Five-fold:
1. Stressor - The real situation
2. Perception/Thoughts - Your initial reaction as you perceive the
situation
3. Feelings/Emotions - your psychological response to your perception
4. Physiological Reactions - your body's response to your emotional
state
5. Health Consequences - Energy consumption
1. Stressors are manifold in trading:
You just got whacked
You're distracted by other traders who have lost it!
Your significant "other" is less than supportive.
You're trading with scared money.
2. Your Perceptions
"I can't afford to lose any more money!"
"My wife is going to kill me!"
"It's over for my trading career!"
3. Your Emotional Response
Frustration
Rage
Anger
Fear
4. How your body responds to the Emotion
Increased perspiration
Increased heart rate
Increased blood pressure
Increased muscle tension
Bracing - Jaw clenching, shoulder tightening
5. Your Health
Heart Attack
Stroke
Asthma Attacks
You name it - Headaches, Loss of Appetite, etc.
Progressive Relaxation
Take a deep breath and hold for 5 seconds
As you inhale, clench your fists & jaw & pull your shoulders up to
your ears (tighten your muscles)
As you exhale, release all tension & completely relax downward
Breathing Clouds (Repeat at least 3 times)
Close your eyes and focus all your attention on your breathing
As you inhale, visualize the air that you breathe in as being clean,
fresh air that is pure & energized
Feel the air enter your nose (or mouth), travel up through your sinus
cavities to the top of your head, and down your spinal column to
circulate throughout your body.
As you exhale, visualize that the air leaving your body is dirty air,
dark cloudy smoke that symbolizes all your stressors, frustrations,
and toxins throughout your mind and body.
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