Managing Stress

One of the major problems that we find in trading is that we're exposed to so much stress that we may start out consistent, but we wear ourselves down. We wear ourselves down, we wear ourselves down until all of a sudden we no longer have the mind. We no longer have the ability. We have a worn out body, a worn out brain producing the mind that's out.

What we want to do is we want to take a look at how do you become consistent. The very first thing is let's really look at what stress is and the way it affects your trading and affects your life. First, stress is inevitable. It literally is something that programmed into us for over 50 million years. It's when something really big happens in your environment, like a saber tooth tiger comes about, you, what you have to do is you have to stress up, you have to key up, ready for fight or flight.

That's what stress is all about. It was meant for very short, short periods of time. It wasn't meant for you to sit down in front of a screen all day long, day in, day out, week in, week out, month in, month out, for you to expose yourself and never allow your body to rest or come to homeostasis again. Ultimately, this is what the problem becomes. A lot of traders are okay, but then what they do, they fall into a trap called working hard. You know, if I'm not doing well, I just simply need to work harder. You know, I can get this training thing. I need to work hard. Well, the moment that you start working hard, what you're doing is you're pretty much ramping up the body into a stress response. And over time, initially it's good. Stress versus performance is a bell shaped curve that goes like this. And initially you find out that there is something called eustress which is so useful. It allows us to be alert, it allows us to be able to focus, it allows us to be ready. And that's what you want. You want eustress. As you're trading, you want to be alert, you want to be focused, but you also want to be patient.

You are like the North American cougar. You're waiting, you're waiting, you're patient, you're patient for the deer to come in and then you strike. However, the way the game is played and particularly the way our psychology ends up is you think, I have to be working hard, I have to be trading, I have to put pressure on myself to trade better. I have to do this. And what you do is you go up that, you go up that curve and then all Of a sudden you hit this downward sign. And more than often what you discover is that now you've moved into distress, suddenly the stress is no longer good for you. And what you've got in distress, you're no longer able to think, concentrated, you're no longer focused, you make more mistakes. Suddenly there's a point there that happens when suddenly you're in eustress and you move from eustress into distress. At distress, you start making mistakes. Not only that, you lose concentration. You've seen that in your trading. You've sat there and you sat there and all of a sudden things just, the screens just kind of dissolve. You're no longer doing the kind of critical thinking that you're supposed to be able doing because your brain's burned out. The point is, from a brain built for 50 million years ago, what you've done is you've stressed out the ability of the brain to be at high octane, ready to go. It's over and over and over again. And now what you're doing is you lose the critical thinking capacity that makes it so important in trading. Now you're left with really a fearful, worried mind rather than a concerned mind. So ultimately what you're learning to do is you're learning how to manage that stress. The first stop, the very first stop is your breathing. Worry requires an emotional state. It's an emotional state that requires you to breathe shallow or stop with tense muscles. Every one of you will have that. If you're watching this video, that's going to happen. The key is you have to turn that off because you have to move from a mind built for certainty of survival to a mind reorganized to be able to deal with the uncertainty of probability and to be able to be concerned. That's that alert state and eustress, but not distress. Oh my God. What's going to happen in the future? Is it anything like what happened in the past? The key is when you do that, you move, you begin to take control of your stress. You control the kind of stress you're in. That allows you to stay alert. But you back off of the high octane, dangerous distress. That allows you to think, I'm getting burned out. I'm getting burned out. I'm getting burned out. I start making mistakes. I start making mistakes. So when you're reading the article, I want you to take this and take it a step deeper. You're going to look at the arousal, you're going to be looking at the feeling states. You're going to be looking at the emotional motivation. You're going to be looking at the meaning of all this constraint transpiring into a stress moment. It's all about the way you actually manage that stress. You know, Are you worried about the future? Are you concerned about the future? If you're worried, you're projecting about what bad's going to happen, what could happen, or, oh, my God, I remember what happened back then. When you're concerned, you're in the here and the now. Your mind is set and it accepts, accepts uncertainty, not being able to determine outcome. Okay, that's important. When you let go of outcome, what there is to manage.

What there is to manage is the mind that you bring the management of uncertainty to the management of probability. And that is the trader's state of mind.