Stress :How it affects trader's losing reactive patterns

Trading Education Buyer

Trading Education Buyer

https://www.psychologytoday.com/blo...ults-out-control-the-spread-stress-reactivity

What is particularly harmful is stress reactivity. Stress reactivity means that you are threat reactive--that you have a low threshold for threat, and perceived threat triggers a stress response. This is not a good use of the stress response.

Sapolsky showed how stress reactivity can destroy health. But I think it can also destroy a society and it can destroy your trading strategy

The stress response "makes you stupid" because it moves blood flow away from the neocortex and into your muscles, anticipating action.

The stress response also makes you egocentric as your self-preservational instincts take over, lowering your empathy and compassion.


IMAGINE:Market is stressing you out , with stop outs , losses , set up failures etc etc etc


What is an acute trading stress reaction for traders?
An acute trading stress reaction occurs when symptoms develop due to a particularly stressful event. The word acute means the symptoms develop quickly, but do not usually last long. The events are usually very severe and an acute stress reaction typically occurs after an unexpected trading crisis.

Stress management: Examine your trading stress reaction
Stress management starts with an honest assessment of how you react to trading stress. You can then counter unhealthy ways of reacting with more-helpful techniques.

One of the first steps toward good stress management is understanding how you react to trading stress — and making changes if necessary. Take an honest look at how you react to trading stress and then adopt or modify stress management techniques to make sure the stress in your life doesn't lead to health problems

http://www.forbes.com/sites/travisb...powerful-ways-to-conquer-stress/#51f8970b2abf


 


Traders sometimes close trades early = flight or increase size to recover loss

The fight-or-flight response (also called hyperarousal, or the acute stress response) is a physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival.

 
zdreg said:
"you have nothing to fear except fear itself."
More...
Fear of Losing
The fear of losing when making a trade often has several consequences. Fear of loss tends to make a timer hesitant to execute his or her timing strategy. This can often lead to an inability to pull the trigger on new entries as well as on new exits.

As a market timer, you know that you need to be decisive in taking action when your strategy dictates a new entry or exit, so when fear of loss holds you back from taking action, you also lose confidence in your ability to execute your timing strategy. This causes a lack of trust in the strategy, or more importantly, in your own ability to execute future signals.

Fear of Missing Out
Every trend always has its doubters. As the trend progresses, skeptics will slowly become converts due to the fear of missing out on profits or the pain of losses in betting against that trend.

The fear of missing out can also be characterized as greed of sorts, for an investor is not acting based on some desire to own the stock or mutual fund other than the fact that it is going up without him onboard.

Fear of Letting a Profit Turn Into a Loss
Unfortunately, most market timers (and traders) do the opposite of "let your profits run and cut your losses short." Instead, they take quick profits while letting losers get out of control.

Why would a timer do this? Too many traders tend to equate their net worth with their self-worth. They want to lock in a quick profit to guarantee that they feel like a winner.

Fear of Not Being Right
Too many market timers care too much about being proven right in their analysis on each trade, as opposed to looking at timing as a probability game in which they will be both right and wrong on individual trades.

In other words, by following the timing strategy, we create positive results over time.
 
2. Trader: Most traders don’t hold the hours of investment bankers, but they may have a sharper, more acute level of stress. “Trader stress is in real time and can happen instantaneously,” said Sal Khan, managing director at Dynamics Associates.

Obviously the lives of some traders are easier than others. Sell-side traders live and die daily, said Cohen. Eyeing the current moment, fixed income traders are likely more stressed than ever, simply due to the conditions, Lipstein said. “Their business is shrinking – there will be triage, and they know it.”

http://www.businessinsider.com/the-most-stressful-jobs-on-wall-street-2014-1?IR=T
 
What are the early signs of stress?
Stress can affect you both physically, emotionally, and mentally. Physically, you might have troubles sleeping, a change in your eating patterns, muscle tension and repetitive colds and flus, head and backaches, digestive problems, and more. Emotionally, look for marked differences in how you would normally feel and act. You might suddenly be more volatile and restless. Or you might go the other way and feel lethargic, low, or withdrawn. And mentally, look out for forgetfulness and an inability to concentrate. Stress can also be behind things like growing substance abuse or a lack of libido.
 
There is something wrong if you have stress while trading forex because it doesn't have to be that way. The successful trader must always have cash in reserve, like a good general who keeps troops in reserve for exactly the right moment, and then moves with great conviction, and commits his reserve armies for final victory, because he has waited until all the odds are in his favor. Same goes with Forex. Do not trade all the money that you have. Do not borrow money from others to trade. Work harder, save some money and then open a trading account.
 
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