Managing An Emotional Meltdown While Trading

Hello. What we're going to be looking at today is it's really continuation from the last one with the last article where we were looking at, oh, so close, but yet so far away. That was part one. In part two, we're going to say, well, how do you manage an emotional meltdown while you trade? Now, in the first article, what we did is we had a client of mine, Ken, who has been videotaped. And what he's done is he has become aware of what happens to him as he's trading. And he's beginning to see that emotion is biology and that there is no such thing as a mind of emotion. Emotion starts in body, takes over mind, and what he does is he looks at it. He looks at a video of a meltdown of his where he thought it just happened out of nowhere. And what he discovered is there were plenty of precursors there if he'd only had the eyes to see it. So in effect, what we're doing here is he is developing a new set of eyes, a new sense of mindfulness, of his body as emotion. And as he does that, he starts noticing all the stuff that goes on in an emotion. He begins to see that it's actually a triggering that has a process to it. And in the first article, what we did is we explored literally what was happening to him, what he saw, you know, the tightening up, the tunnel vision, just the whole nine yards and the heart beginning to race, the holding of the breath and then the kind of the panning, all that stuff, all that tension, all that fixation. And what happened is he had never seen it. So the initial awakening is going, wow, look at all this stuff that's going on right underneath my nose. And I didn't see it with the video that I use often with my individual clients. He sees it. But next, let's take a look and take one step deeper. Let's drill deeper into what's happening here. First of all, as he's looking at this, all this, all this tension, all this breath, all this fixation is something called arousal. That's the emotion revving up, getting ready to put yourself into action. Okay? Ultimately, the emotion has triggered and sees something threatening. Okay? And often entering a trade, managing a trade to the limbic system, to the emotional brain definitely is seen as a threat to self. Okay? That's just kind of the way it is. Now. The next part, it goes deeper though, is what you discover is that emotion as arousal is revving up, is revving up, is revving up. And this is the part that Ken has pushed away. He has not seen these precursors, these elements of an emotion before it breaks out. What they see is the breaking out. That breaking out is what we would call in emotional intelligence work as the feeling. A feeling to an emotion is the chemistry of the emotion pulsing through the body. The arousal has already got it to a breaking point, to a tripping point, it trips. And suddenly the chemistry is flooding through your body. That chemistry is going to alter the way you think. By the time that Ken recognizes that he has a problem, it's too late. The best thing he can do is get up out of the chair and get away from the trading desk. But no, it's got him. It's flooding through him. And suddenly he's scared. He's no longer trading from a mind focused and disciplined impartiality, but now he's trading from a mind contaminated by fear. Out of that fear, the next part of the emotion shows up. And that part of the emotion is called motivation. The motivation of the emotion is going to have him moving in a particular direction. And the three primary ones in emotional intelligence work of an emotion. Our approach, which is not happening, attack, which is not happening here, that would be revenge. Trading or avoid. Suddenly what he's doing is he's trying to avoid loss. Suddenly he's in this trade. What he wants to do is he wants to get out with the marginal little profit he's got so he can't lose. And he is consumed by the feeling. And that feeling causes him to believe with certainty that bad things are about to happen. And he needs to bail. He needs to avoid further trouble. Okay, now this is all happening right in front of his eyes. And he's going, well, God almighty, what do I do? What do I do? Well, this is where training really helps in emotional regulation. If you would be looking at Ken, what you would be seeing is tense muscles, head held breath. These are called the emotional signature. Every emotion has a particular signature that includes tension in body and breath. Okay, so if you want to, if you're motivated and if you want to alter that emotion, what you do is you alter the breath and tension components of that emotion. Now, this is what Herbert Benson did during the 1980s with the relaxation response. What he discovered is that if you disrupt the signature of breath or tension in the emotion, the emotion cannot maintain itself. And that in fact, if you move to, instead of tense body and shallow breathing or no breathing, and if you move to diaphragmatic breathing or what I call bellows breathing, and then relaxing, tense body what you're doing is you're taking away the fuel of the emotion. And ultimately, the emotion cannot stand anymore. It cannot maintain itself. It cannot intensify. So ultimately, what Ken is going to learn how to do is we're going to be able to spot this moment, and then we're going to say, what we're going to do is we're going to alter the breath.

And he learns how to start diaphragmatically breathing, or bellows breathing. And that's very simple, folks. It's air out here. And you're moving it down your nostrils, down your windpipe, into your abdominal area, and then it expands to chest pause, and you release slowly.

Most people find this to be a very abnormal way of breathing. It's because they have learned to breathe in such a way that supports anxiety. And in my training courses, it generally takes about three weeks of training to get the person so that they begin to habituate a new way of. Of breathing that allows them to produce calm. So as he continues to breathe diaphragmatically, okay, what he's doing, he's cooling down the intensity of the emotion. He's no longer putting oxygen into the brain, cutting off oxygen to the brain. Excuse me. He's no longer putting gasoline under the fire of fear. He's smoldering it. And then what he's doing is he's noticing, oh, man, look at this fixation. Look at this tension in the body. And he's going, okay, I'm letting the tension drain, drain, drain. And suddenly what you have is you have breathing and tension, relaxation, volitionally being placed upon the arousal of an emotion. And what he learns how to do is to disrupt that emotion and return to a calm state of mind. In the same way, with the tension, he lets go of the tension. He lets it drain from body, and suddenly, again, gasoline is no longer being placed on that emotion. So he calms down, and he realizes that he can actually mark the precursors, the telltale signs of the tension in the breath and the fixation. And he can say, I know that when these happen, I better start changing my breath. I better start really relaxing the tension. Better yet, what he's learning to do is to anticipate that moment and to maintain calmness. Okay, now, this is a powerful part, and this is a part very, very, very fundamental in my training. But it does not solve the problem that we're going to see next month. What it does is it calms the body down, thereby calming the mind down, calming emotion down. And that allows you to get to the door of the mind. Okay. It's looking inside the door from a calm state of mind that you begin to see the lurking hidden beliefs that have been torpedoing your trading mind have been torpedoing and sabotaging your best laid plans of becoming a successful trader. That's what we'll be doing next time. But what I want you to notice what's happened here in the first article, what we did is we just simply saw that what, what was unexplainable and an ambush to Ken in one moment became, oh my gosh, I see the progression of this. I see and understand an emotion. I see what's happening here. What you've done is you have seen how he's taken skill sets, built skill sets that allowed him to calm the intensity of that emotion, that arousal down so that it did not get to feeling stage and pollute thinking. Okay, now what we haven't gotten to the hidden beliefs, the submerged meaning of why the emotions cranking up in the first place. That's what we'll be doing next time. But this will give you more than enough to practice, to work with and begin to see how you can learn to become an emotionally intelligent trader who has really command of his mind that he brings to trading and gives up control of outcome.