{"id":1893,"date":"2015-03-31T10:25:59","date_gmt":"2015-03-31T09:25:59","guid":{"rendered":"http:\/\/www.tradersnest.com\/?p=1893"},"modified":"2015-04-27T13:18:03","modified_gmt":"2015-04-27T12:18:03","slug":"5-steps-to-managing-forex-trading-stress","status":"publish","type":"post","link":"https:\/\/www.tradersnest.com\/articles\/5-steps-to-managing-forex-trading-stress\/","title":{"rendered":"5 steps to managing Forex trading stress"},"content":{"rendered":"
They are all great pieces of advice. But have you ever stopped to think how emotional responses get triggered in the first place?<\/p>\n
Delve into the world of psychology and how your brain works and you discover it all revolves around some startlingly simple processes.<\/p>\n
Really get to know your stuff and you\u2019ll find there are ways of hacking the system and controlling how the brain responds to given situations.<\/p>\n
It\u2019s how stage hypnotists pull off impressive mind-control effects to the delight of their audience, and how hypnotherapists help people knock nasty habits on the head.<\/p>\n
Control your broker’s mind \u2013 turn losing trades into winners!<\/strong><\/span><\/p>\n Did you ever see the Derren Brown TV programme where he went to the greyhound races?<\/p>\n He asked a lady to put a bet on a dog at one of the on-course bookies. When it lost, he had the lady go up to bookies’ window and say \u2018This is a winning ticket; this is the ticket you are looking for\u2019 (or something along those lines). And he also banged on the counter with his hand \u2013 a distraction that was key to the trick\u2019s success in some way I guess.<\/p>\n Lo and behold, the bookmaker\u2019s clerk paid out on the losing ticket!<\/p>\n When asked why she had done it, she was at a complete loss for words. Couldn\u2019t even begin to explain. (She was even convinced her computer had told her the bet was a winner!)<\/p>\n Now how about that for a power? Imagine being able to phone up your broker and perform Jedi mind tricks, turning losing trades into winners: \u201cThis is a winning<\/em> trade. This<\/em> is the exit price you are looking for.\u201d<\/p>\n It\u2019d be a great thing to fantasize about for a while. But it wouldn\u2019t take long for your little ruse to be uncovered…<\/p>\n And it would be TOTALLY unethical of course!<\/p>\n So instead of that, working on your own mind (and not of trying to trick the mind of someone else) is an option that\u2019s always available. It\u2019s completely ethical and that\u2019s where the long term benefit lies anyway.<\/p>\n Here\u2019s what I\u2019ve learned recently about how the brain processes incoming data\u2026<\/p>\n You\u2019ll see how it can create a stress response in your body, how THAT can have a negative effect on your decision making when it comes to trading, and I\u2019ll also give you an idea of how you can start improving things.<\/p>\n How your brain works when trading<\/strong><\/span><\/p>\n Your brain responds to stimulus. When it comes to trading, we\u2019re dealing with external stimuli (things that happen outside your mind and body). And your brain filters each individual event as either threatening or non-threatening.<\/p>\n So imagine logging in to check progress on a trade\u2026<\/p>\n Things are going in your favour, the trade has almost reached your target and you move your stop loss to lock-in a good chunk of profit. That\u2019s processed as a non-threatening situation. And you are rewarded with feelings of calm and well being (feel-good chemicals serotonin and dopamine and released into your nervous system).<\/p>\n Now imagine the opposite situation\u2026<\/p>\n The trade is moving against you and you see red numbers in your profit\/loss column. It marks damage already done to your account.<\/p>\n It can be difficult to control your natural response to this type of stimulus. You brain can process it as a highly-threatening situation (even though on a logical level, you know that losses are simply part of the game), your sympathetic nervous system starts firing up\u2026 and now it\u2019s crunch time!<\/p>\n Your sympathetic nervous system is what gives you the good old \u2018fight or flight\u2019 response.<\/p>\n Reach the point of it triggering and you risk trashing your carefully tested strategy. Fighting the market with \u2018revenge\u2019 trades is common here; as is bailing out of the trade \u2018before things get worse\u2019, even though your strategy clearly says you should stay in.<\/p>\n Yes, your in-built survival mechanism actually starts to work against you. And this is the exact point at which traders can start to go astray.<\/p>\n But there\u2019s a small window of opportunity that\u2019ll let you control your state of mind before launching into fight or flight mode (and don\u2019t worry if you miss it, there\u2019s still something you can do to manage things).<\/p>\n<\/div>\n 5 steps to managing Forex trading stress<\/strong><\/span><\/span><\/p>\n 1) Spot your incoming stress sign<\/strong><\/p>\n You just need to start paying attention to recurring physical feelings that let you know your fight or flight mechanism is igniting.<\/p>\n It might be a tightness in the throat, tension in the chest, a swirling sensation in the stomach. It\u2019s different for everyone. But there will be a sure sign an emotional response is on the way\u2026<\/p>\n