Thursday Trader's Tip: Thriving Under Emotional Discomfort
The Thursday Trader's Tip editions offer to-the-point trading psychology & performance advice that can be digested in 5min.
Traders exhibit the most distorted coping mechanism to deal with discomfort in trading.
This week, we’ll discuss how you can effectively handle emotional discomfort in trading and replace your outdated autopilot mode.
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Written Version:
Traders exhibit the most distorted coping mechanism to deal with discomfort in trading:
They try to fix it by avoiding loss
They distract themselves by browsing social media
They enter denial mode and refuse responsibility
They seek certainty by overanalyzing and overpreparing
They blame everything but themselves
They downplay their emotions
When you perceive discomfort as ‘wrong,’ you’ll do anything to make it right. This is especially true for problem-solvers who were extremely effective in their past careers; they ascended to managers of big teams and had better control over all variables of the game. So they want to do the same in trading. When they sense they have lost their grip on the market, it causes an insane amount of discomfort, and they try to run away from or change at all costs.
Denying what you’re feeling or forcing a positive state of mind with affirmations to avoid processing the pain is toxic positivism. This is like throwing wood in the fire.
There are better ways to deal with the discomfort. What needs to be fixed is our ability to be comfortable with uncertainty.
Joy, love, and excitement are parts of life, as well as sadness, frustration, and fear. These all belong to the wheel of emotions, and they’re not necessarily ‘good’ or ‘bad’; they’re simply… emotions. Even though our brain sees them as pleasant or painful, they’re all needed to survive.
You would never know happiness if you’ve never felt sad. You’d never know what pride feels like if you were never frustrated with something. You need both sides of the spectrum to experience life.
Trying to avoid some parts of yourself leads to inner conflict and accumulated emotions that’ll eventually surface, and it mostly happens during trading—the place where you most feel vulnerable.
The first step is understanding your normal way of dealing with emotional discomfort outside the charts. Think about life situations that trigger a sense of discomfort for you. What kind of behavior do you feel tempted to show? How do you usually respond?
The coping mechanism I see more often is conflict avoidance. In trading, this manifests as skipping the analysis of painful losses and even skipping trading days afterward.
Once you’re aware of your normal coping mechanism, now you want to use that awareness effectively.
The next time you feel emotional discomfort while trading triggered by a loss, a mistake, a missed trade, unclear price action, or heightened volatility, remember to switch from your outdated coping mechanism to a healthy one: acknowledging the discomfort, think about it as necessary to outstanding performance, and using it as a means to sustain a high-alert and aware state while trading.
Peaceful trading,
Sara
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