You don’t need a lot of experience to understand how anxiety and impulsivity affect your trading performance.
But before anything, let’s understand what anxiety and impulsiveness are.
Anxiety is intense, excessive, and persistent worry. It is the fear of everyday situations. That is, it is the surplus of the future in the present. An anxious person transmits a threatening response to everyday situations to the brain.
On the other hand, impulsivity is a behavioral characteristic of people who act before thinking and do not consider the consequences of their actions, that is, most of the time, anxiety feeds impulsivity.
You may have already lost money by entering a trade without waiting for the trigger in your strategy to occur. That is, he entered earlier, letting the impulse speak louder.
But the question is: what is the origin of this behavior that led to such a result?
Maybe you are unhappy with your current job and can’t wait for results in trading to fire your boss (laughs).
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It may also be that you have a problem, the need for money, and it causes you anxiety and fuels impulsiveness, making you act hastily.
The result of “losing money” is a reversal of a cycle consisting of:
Think -> Feel -> Act -> Result
Therefore, I do not subscribe to the idea of ”emotional control”, but rather “emotional management”. That is, we cannot control our emotions, but we can manage them to the point of having the behaviors that lead us to get the results we want on a conscious level.
There are two areas of the human brain that are activated in this cycle: the prefrontal cortex and the limbic system.
The prefrontal cortex is the cerebral cortex that covers the frontal part of the frontal lobe. This brain region is involved in complex cognitive behavior planning, personality expression, decision making, and the modulation of social behaviour.
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The limbic system is a group of structures located in the mammalian brain, below the cortex and responsible for all emotional responses.
That is, we can call the prefrontal cortex the rational brain and the limbic system the emotional brain.
In order to manage our emotions well, these two areas need to work in partnership.
For that to happen, we need to exercise them in the same way we would exercise any muscle in the body.
You need to use your prefrontal cortex more to do better emotional management. Yes, that is exactly what I just read.
The more powerful your reasoning is, the better the conditions your limbic system will need to manage the emotions and generate the behaviors you need to get the results you want.
After all, passion is the fuel for action. But if you don’t have a good technical stock, the emotion is likely to fuel anxiety, and thus impulsiveness.
Now that you understand the root of the negative consequences of anxiety and impulsiveness, I’m going to give you guidelines broken down into three simple practices to stop suffering from them.
1. Master the method
The best way to strengthen your rational mind to help your emotional mind is to study and practice a method. You need to train to become.
Study one method long enough to become good at it. Don’t be the “trading duck”, who does everything, but never does anything right. Just study, practice, make mistakes, learn and keep going until results happen.
By repeating this process every day, you will increase your self-confidence. This is exactly where you will see in practice how strengthening your rational mind can contribute to strengthening your emotional mind and shaping your identity.
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2. Be in the right environment
The environment is the powerful shaper of behaviour.
Once upon a time you saw a viral video, you may have seen it too: a person enters an elevator and realizes that everyone there and other people who are entering it, take off their shoes and face the elevator wall.
When he realizes that everyone repeats this behavior, this person, in order not to feel out of place, does the same.
The truth is that there are many experiments and scientific studies that prove that the environment we enter into modifies our behaviour.
Therefore, you need to be included in environments where people who have or are looking for the same results as you.
3. Move your body
This third piece of advice may seem like it has nothing to do with trading, but I’m telling you – it’s more about it than you think.
When you learn to control your body, you will be able to control your mind.
Daily physical activity increases the production of dopamine, a neurotransmitter responsible for transmitting information from the brain to different parts of the body.
The substance is known as one of the hormones of happiness. When released, it causes feelings of happiness and satisfaction, as well as increased motivation.
In addition, exercise reduces excessive production of cortisol, a hormone secreted by the adrenal glands located above the kidneys.
It is released to prepare our body for when we are in danger. The problem is that our body does not know how to differentiate between real and imaginary risk situations.
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When we are under a lot of stress, the body realizes that there is danger and ends up releasing cortisol into the bloodstream, leaving the levels of the hormone higher than normal, which generates negative effects on health.
This means that movement will bring you well-being and self-control, and thus more physical and emotional health.
Apply what you learned here and you will see that these practices will help you not only in trading, but in life in general. do it!