As traders in a 24-hour market, we are certainly forced to contend with a good amount of stress. Many times, this stress is intensified through periods of losing streaks and rough patches. But in the end, it’s the coping mechanisms used to handle this stress that ultimately determine our ability to find a healthy and profitable path.
We came up with 10 questions on the subject of trading and stress management and had the pleasure of putting them in front of Harley Therapy™'s Clinical Director & Senior Psychotherapist, Dr. Sheri Jacobson. Here’s how it all went down.
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1. How do I deal with the emotional swings?
Emotional swings are a common side effect of stress. One of the best ways to keep your moods steady when under stress is, of course, to improve your self-care regime. The problem is that when we are under stress, self-care is often the first thing to be neglected. But it's worth the effort to work harder to get enough sleep, eat well, and exercise.
And do watch your consumption of alcohol. While it might feel like a stress release in the moment, alcohol leads to more fatigue, worse sleep, and even more tenuous moods. Sure, it can seem important to go out and celebrate a business win, but when it comes to the second bottle of wine, is your social moment really more important than feeling good the next day? The truth is we all do better business when we feel stable and positive.
It's a good idea to find an outlet for your mood swings that is not another person. Find what works for you - a quick walk around the block when you feel your moods stirring? Five minutes of mindfulness meditation or deep breathing? Or reading a chapter of a book written by the person who most inspires you that brings your positive focus back?
2. How can I separate trading from my home life when I work from home?
While it might seem a good idea to constantly be checking in on business it can mean you are making poor decisions as even your mind needs a time out. Keeping a semblance of balance in life isn't just a good idea, it's actually important for psychological health and clearer thinking.
Even though you might be working from home, try to keep up structure and boundaries. Consider planning your working hours for the week ahead of time and schedule them in your diary. Also schedule in leisure time, since often it gets put off. Remember, taking time to relax makes you sharper when you do get back to work.
If it helps, wear business attire when you are working and only slip into lounge wear as a sign to yourself you are transitioning into family or leisure time. Or have rooms that are work friendly and those that are work banned (try to keep work out of the bedroom for starters, it can interfere with your sleep patterns if you associate work with the room you sleep in). And stick to your boundaries. If 7 to 10 is delegated family time, then shut the computer and your phone off. If this feels hard, ask your loved ones and friends to hold you accountable.
3. Not all trades are winners, how can I mentally prepare myself for losses?
If you have a natural competitive streak, you might also have a tendency to focus on the negative and be hard on yourself. Counter this and create better mental stability and a more realistic perspective by forcing yourself to take note of the positives, too. Keep a running chart of your wins and when things go wrong, go through all the times things have gone right. It can also help to take note of what is going well in the rest of your life, too. Yes, you might have lost money, but if your health is good and your family happy, ask yourself 'is it really the end of the world?' 'will I be thinking of this moment as I reflect back on my time on earth?' Another thing to try is to create a gratitude practice or recording things you are thankful for on a daily basis (there are apps available to make this easier). Gratitude is now evidence-based, proven by studies to not only improve mood and focus but also boost your immune system.
4. Can I get too high (like a drug) from winning trades?
Yes. For some, it might just be an adrenaline response. We humans might be technologically evolved, but our brains are still rather primal, and anything that it registers as dangerous (like losing money or taking a risk) sets off the fight, flight, or freeze response. This releases a cocktail of hormones into your body including adrenaline and cortisol that can lead to that 'buzzy' feeling.
But if you are constantly feeling 'high' from trades it might also be a sign you are developing an addiction and need to talk to someone. Addictions come with a trademark cycle of high and lows. Is trading becoming all you want to do? Are you lying to friends and family about having other commitments when really you are choosing to stay home trading? Any behaviour or habit that becomes something you rely on to feel good about yourself, become secretive about, you feel you can't stop doing, is taking a toll on other areas of your life, can be an addiction. If this sounds like it might be you, see a counsellor or find a support group.
5. How would you prevent impulsive decisions trading?
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 is the right time to face up to and sort these issues out? How about now?
Otherwise, if your impulsivity is only around trading, use delay tactics. Set a timer and don't allow yourself to act until it goes off. One of the best things to do is to get yourself out of your mind for a few moments. A brisk ten minute walk can help. Not only does it get you into a new environment, exercise also releases hormones that help us feel good, and when we feel good we want to make good decisions.
6. Do you have any daily techniques you can share to help with reducing stress?
Mindfulness, a technique of working to stay focussed on what you are feeling and experiencing in the now moment, has been proven to help reduce stress. You can take a cue from mindfulness by using focussed, deep and slow breathing several times a day for two to five minutes. It reduces tension in your body, and if you also work to focus on your breath instead of your thoughts it also lowers your mind's stress.
'Stress journalling' can also provide release. It involves getting everything that is stressing you out from your head onto paper, no matter how wild, furious or even silly it comes out – you can rip up the paper afterwards. This brings the anxious thoughts lurking in your unconscious into your conscious mind where you can then rationalise them or find ways to deal with them.
And perhaps the best technique of all when it comes to stress is to be strong enough to accept support. Delegate wherever possible so you can focus on what you're best at, and consider a coach or counsellor for mental and emotional support. It's better to use support to troubleshoot stress and learn new tactics to manage your life then to wait to reach out until stress has wreaked havoc on your health and life.
And, as usual, work to get better sleep and take time for exercise. The basics always count.
7. 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.
8. Do you have any recommendations for getting a good sleep when trading a 24 hour market?
It's your mind that is likely to keep you awake, worrying you'll miss out on things or forget things in the morning. It can help to make a list before you go to bed of all the things you need to do first thing the next day so that your mind can feel things are taken care of. Another idea if your mind really won't shut off is to 'worst case scenario' it. Instead of fretting endlessly over what might go wrong, trick your mind to and ending by making yourself consider the worst thing that can happen – say, you'll lose money. Is that really the end of the world? It can be surprisingly relaxing to realise that actually you could deal with that and life would go on.
Then there are the things that sound obvious - buying a top quality mattress, earplugs, or buying blackout blinds. And yet so many of us put off taking care of these things. Better sleep is linked to better health and moods, so when does it become a priority? If you just can't get around to it, delegate it to someone to help you with.
9. If I can't grasp trading, at what point should I call it quits?
If you are beginning to have very negative thoughts about yourself, in other words, if your self-esteem is being seriously affected, it's time to walk away. Everyone has things they are good at, and nobody can live their best life if they have lost their confidence. Also look for negative thoughts about life in general, which can be a sign that you are allowing this one setback to lower your moods too much. And if you are keeping these thoughts to yourself, it's a sure sign you are not heading in the right direction. Healthy challenges are things we share with others, but if you have negative thoughts you are hiding it can be a sign of depression.
10. I'm struggling to call quits, at what point should I seek professional help?
If the rest of your life is suffering – if your family life, your friendships, and your physical wellbeing are all seeing the effects of your focus on trading – then you might want to consider talking to a counsellor or psychotherapist. They can help you see the bigger picture and find balance again.