Stress is ubiquitous in modern life. Trading is especially stressful. How stressed out are you during the trading day? Do you have a short fuse? Do you find yourself getting a little more frustrated or angry than usual? Do you find yourself laughing less often? How about your sleep patterns? Do you have a hard time falling asleep? Do you wake up in the middle of the night and have trouble falling back asleep? Are you more forgetful? Do you have headaches or indigestion? If you feel any of these symptoms, you may be overstressed.
According to a recent article in “Men’s Journal” (February 2004), trading is related to stress. They describe a small paramedic station at the Chicago Board of Trade, just off the main trading floor. Jim Thorpe, an EMT who mans the station says, “Quite a few of the guys here are on heart medications. Some of them are young too. They’ll stop in a couple of times a day to check how their blood pressure is affected by trading. Then there are the ones who have already had heart attacks. We especially keep an eye on them. Fortunately, there’s a firehouse with an ambulance just down the block.” This quotation highlights the stressful nature of trading.
Stress literally kills, and floor traders seem to be especially at risk for the health problems associated with stress. One’s fate as a trader isn’t doomed, however. There’s a lot you can do to manage stress during the trading day. In addition to reducing your risk of health problems, stress management techniques can allow you to cultivate a peak performance mindset that will help you trade objectively and profitably.
First and foremost, it is vital to take preventative measures to reduce stress. Exercise regularly. A rigorous exercise schedule will allow your body to let off pent up stressful energy. It is also a good idea to sleep on schedule. Try to go to bed and wake up at the same time. It is hard to cope with stress when you are tired. You just won’t have the psychological energy.
When you are rested and relaxed, you’ll have the energy and stamina to cope with stress. Finally, give yourself credit for all the effort you put into trading. It is tempting to feel good about your efforts only when they pay off. But you put in just as much effort putting on a losing trade as a winning trade. Regardless of whether you win or lose, you’ll feel better if you reward yourself for all the work you do, regardless of the outcome.
According to “Men’s Journal,” there are four quick fixes you can use during the trading day to reduce stress. First, it is useful to practice breathing exercises. Take a deep breath and hold it for a while. Do it slowly allowing yourself to feel your body and muscles tighten when you hold your breath and loosen as you exhale. As you exhale, your body initiates a natural relaxation response. Repeating the process over and over in succession will help you relax and calm down.
Second, it is important to get up and walk around. It is tempting to sit in front of your screens all day, focused on the action. Your mind can only focus on a task for so long, however. It is necessary to walk around for five minutes every 90 minutes. A trick that can help you is to have a bottle of water next to your workstation. Drinking the water frequently throughout the day will ensure that you get up to use the restroom every so often.
Third, go out and do some physical activity, such as running or playing basketball. The activity gets your heart pumping and helps you think of something else besides trading. Finally, it is useful to imagine the worst. Many times we are afraid to look at the worst-case scenario, but it is often less stressful to consider the worst.
What we tend to do instead is think that a catastrophe is about to happen. It lurks in the back of our mind as a vague and amorphous threat. If instead, we face the potential setback head-on, it neutralizes it and we feel less stressed out. So don’t let stress get the better of you. You can take steps to reduce stress, and if you do, you’ll find you’ll trade more calmly and profitably.