Stress appears in our life in many different guises, some good, most bad. The key is always if you don’t monitor yourself how will you know if your trading is being affected by stress. How will you know if your life is being affected by stress. Because let’s face it most of us don’t really pay attention until it’s too late. We even joke about being stressed without even realising the effect it is having on our mind and body. Science is finally proving what a lot of guru’s have been saying for years. That psychological stress actually causes illness. It weakens our immune system and can cause ulcers, heart disease and strokes to name but a few.
And yet many of us do nothing to monitor ourselves and check that we are on top of the situation. Most of us probably wouldn’t know how to. I certainly didn’t. It got to the point where stress had made me psychically ill. My body simply couldn’t swallow food, even to the point where I was unable to wash the food down with water. That’s when I got really scared and went to the doctor.
For those who are still unsure, thats one rung up the ladder from death. You can not go any lower, you die. On the plus side “The only way is up” And that’s exactly what I did. It’s not always been easy, but i have certainly had some fun, met some great people and I now totally enjoy and respect life. I live each day in gratitude and I love it.
So why have I opened up my life to you like this. Not for sympathy that’s for sure, that is a dangerous drug that is highly addictive. I don’t need that in my life any more thank you. I’ve told you this so you can see how powerful your brain and mind really is. And that it is possible to heal yourself and change your outlook and future. Anything is possible with the right mindset.
You just have to be aware of yourself and that means making notes or taking our Special FX Academy Stress Test. If you haven’t read Trading Stress Part 1 yet I would strongly suggest having a peak. Otherwise let’s continue to answer some questions.
How do you prepare for losses?
Everything you’ve learnt up to the point of starting to trade means you are not prepared to take a loss. Don’t care how many times you say that you understand that losses are part of the game. Saying it and meaning it are two totally different things. I understood for about two years before I could actually practice it. So why is that?
Think about schooling, everything about school is geared at being right. Whoever gets the most right is the winner, whoever gets the most right the quickest is the winner. You need at least 75% to pass a test. All this is programmed into you from an early age, from your parents as well as your teachers.
Preparation is key
Sports are all about winners, no one remembers the losers. Quizzes are about winners. Art competitions. If it isn’t hitting you consciously it certainly is subconsciously. None of this helps you in trading. It dents your confidence when your not right, be it your analysis or your trade. This is not an easy thing to give up, it will be one of your hardest obstacles. Because it is so well ingrained into our lives and even our culture. That’s why guru’s come and go. One minute they are calling all the right trades and they are everyone’s hero. A few losses later and when the dust settles, no one even remembers their name.
To prepare for a loss you have to change your way of thinking. And the only you can do that is by taking a loss and another an then another and to keep taking losses as long as they are part of your plan. And I am going to sound like a broken record here and god knows I feel like it. But this really needs to be hammered home. You will only be able to withstand the losses if you understand that they are part of your strategy and to be able to do that you must have a strategy that you understand because you back tested it. You forward tested it. You have written out and are following your trading plan.
And when you look back over the course of the year and you can look at your string of seven or even eleven straight losses. And realise you still made money. If it’s the right strategy you will have made a lot of money. Now you are prepared for your losses.
I find myself feeling high like a drug?
Then you need to stop trading. And rectify this problem now. Because it sounds to me as if you are using trading to give you your excitement. That’s not trading that’s gambling. Your releasing dopamine a feel good chemical into your system. Which like any feel good drug can get to be addictive real fast. If you are a long way down the rabbit hole then I would suggest gamblers anonymous. If you carry on down this route you will lose not only your account but probably everything you hold dear in your life.
You have got to get your kicks elsewhere. Trading should be monotonous and boring. Remember no emotion, positive or negative. That’s how you trade. If you are an adrenaline junky, find something else to relieve your urges. Because the market will just chew you up and spit you out. That’s why you need to get balance in your life.
Do you have any daily techniques you can share to help with reducing stress?
I do and they really work for me. Meditation is right up there at number 1. However, when having a busy day or you need to just calm yourself quickly before placing a trade then I have a few tricks to share with you. This will also help the people who like me struggle to meditate when not in a specific environment.
Let me tell you my process and then I will discuss the what’s and the wherefores.
I do this every hour or every change of task or if I just need to re-focus.
- Yawn. A couple of times forced with a big wide mouth.
- Touch your arm with your index finger as gently as you can and then move your finger as slowly as you can. And I mean painfully slow, shut your eyes and concentrate on the faintest of touches that you are feeling as you move that finger.
- Rotate your head starting with your chin on your chest. Again so very slowly, painfully slowly.
So why does that work? And why do I do it?
You can’t think and yawn at the same time. Try it, do it now. Two big yawns. Your mind goes blank, empty. And the extra oxygen you breathe in at the time helps invigorate you. Keeping you awake and giving you more energy. Double bonus. The slow moving technique works on the same principle. To move that slowly it takes your whole mind concentrating to make it happen. No one can be stressed when they have nothing on their mind. It also takes a lot of focus to do it right.
So that when you come back to the task in hand, the mind is already primed to be focused.
How do I prevent Impulsive Trading Decisions?
Impulsive and risky decision-making, like any risky behaviour, is often connected to some form of avoidance. And what we are avoiding is usually some sort of worry or emotional upset. Are you seeking a distraction or a ‘high’ to avoid facing something that is bothering you? Do you have unresolved issues in other areas of your life or from your past that have you acting recklessly on a regular basis? When would now be a good time to sort out these issues.
These trading decisions are normally emotional that’s why they are impulsive. You are not thinking straight. Logic and education has left the building. So in order to prevent this from happening you need to keep all decisions out of the market. Have routines. Make checklists. Have and follow a comprehensive trading plan. Don’t over trade.
Stand up and walk away. Go outside and look at something in the distance. Good for your eyes as well as giving you a minute to think before reacting. Keep to your rules. If you have no rules, then everything your doing is a mistake any way.
What if I can’t do it, should I quit?
You only fail if you quit. It’s not the trading you can’t do. Because trading is easy, in fact the more stupid you are in terms of IQ the better the trader you will make. Because you won’t ask why you will just do. Perfect mentality to be a trader. If you quit trading then in my mind you are really quitting yourself. Because trading is just a mirror, if you are unsuccessful in any area of your life then you will be unsuccessful in trading. Whatever mistakes you are making in any area of your life, you will repeat in your trading. Know yourself … know trading.
If you are addicted get help, sort yourself out and get back on the horse later. Too much stress in your life, stop trading get help and then get back on the horse later. You don’t have to do this on your own, it doesn’t prove anything. Nine times out of ten it just means you will keep doing the same dances with the same obstacles and you will keep getting the same results.
If you are struggling to learn to trade consistently by yourself, then I would suggest taking a look at our Trading Room. Here you will gain access to two coaches, Andres – Director of Trading and myself Director of Trading Psychology.
To Your Consistently Profitable Trading
P.S. What did you think of this Lesson? Please share it with us in the comments below!
Sorry!!! You missed the 50% off FX CopyTrader sale! But you can still get in on a month-long trial of our Forex Trading Combo for only $99! Sign up here now!