Vol 2: Stress management

...continued from yesterday...

Volume Two of the Peak Performance Course for Traders and Investors is entitled “How To Control Stress”.

Stress refers to the wear and tear on your mind and body while living your life. Thirteen sources or types of stress identified by Charlesworth and Nathan in a 1984 publication include: family, work, emotions, social, change, chemical, decision, commuting, phobic, physical, disease, pain, and environmental. Additionally, trading itself has these stresses: losing, winning, missed opportunities, order entry, waiting, inactivity, work environment, and so on.

This volume includes questionnaires for testing your stress sources and stress levels. Areas tested for stress include personal, financial, health, job, and family. Some of these overlap the 13 types/areas of stress identified by Charlesworth and Nathan.

Van says that successful traders have an open (instead of a closed) attitude towards life. An example from this volume 2 of the course is “I enjoy life to the fullest. I am constantly exploring new ideas, visiting new places, experiencing change, and having fun. I try to get everything I can out of life. I eagerly look forward to each day. I am in the best of health because I eat proper foods, get plenty of exercise and sleep well. I am never overly stressed because I do not feel pressure – only challenge.”

Here's one theory about how stress adversely affects trading. People have a limited capacity for processing information needed to make proper trading decisions. That capacity is reduced by arousal (physical or mental), worrying, incentives, and focusing on results such as profits/losses (instead of the process of trading).

Van presents several strategies for managing stress. One strategy for managing stress is to avoid, reduce contact with, or eliminate from your life those situations and people that cause you to feel stress. Take the stress test in this volume to identify what makes you feel stress and set goals to avoid, reduce contact with or eliminate those situation or people. Van points out that process goals are more useful for traders than outcome goals such as profit levels.

Another strategy for managing stress is to make your body better able to physically withstand stress. You perform best when you feel positive, relaxed and energetic. For this you need to eat healthy foods such as vegetables, fruits, grains and water. You should eat 5 small meals a day instead of the usual 2 or 3 large meals. Additionally, you need to do aerobic exercise regularly.

A third strategy for managing stress is to make yourself mentally and emotionally better able to withstand stress. The most effective stress buster is to adopt beliefs about stressful events that enable you to perceive those events not stressful for you. For example, adopt the belief that it is OK to lose. Keep a diary of your self-talk during trading or during episodes of worrying to identify what your beliefs are so you can spot those that you need to change. Additionally, have regular recreation and relaxation (naps and meditation). Furthermore, regularly do mental rehearsal of your trading plan so that during stressful trading you are able to carry out your plan consistently despite the stress.

...cont'd tomorrow...

Copyright 2007 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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