TRADING PSYCHOLOGY
The Night/Daymares Of Traders
by Adrienne Laris Toghraie
Your mind doesn't shut down when you go to sleep. Sometimes, the trading from the daytime can stay with you into the dreamtime. Here are ways to cope with trading nightmares.
If trading is a high-stakes game of skill, psychology, and chance played on a multidimensional board, then none of the dimensions can be ignored. Yet one influential dimension is consistently overlooked because it is assumed that it is under control or has little effect. The dimension in question? Our dream world. This world includes our dreams from sleep as well as our waking hours. Unwittingly, many traders have been trading from a very powerful part of their dream world -- their nightmares."I have the same nightmare at least once a month," a trader named Robert told me. "I enter a trade against my signals and better judgment and it goes against me. Then I'm powerless to stop the carnage. Before it's over, I've lost everything. By the time I wake up, my heart is pounding and I have an overwhelming sense of being out of control. For the rest of the day, my trading is worthless. I might as well stay in bed." He was anxious to find a way to stop this recurring nightmare. "Why am I doing this to myself?" he asked.
Robert's experience is not an unusual one for traders. Trading nightmares play an influential role in the lives of many traders, successful or no. Traders take the images of these nightmares to the trading floor or to the office. Then these nightmares sabotage a trader's performance all through the day by constraining his ability to think positively and objectively.
Often, a trader awakes to the sense that he has had a nightmare, but he cannot remember the details. He trades all day with a feeling of dread that he cannot define, like a lingering taste in his mouth. Often, some unrelated event will spark the memory of the nightmare so that it can be remembered completely.
HOW BAD CAN IT BE?
How can the memory of a trading nightmare cause so much damage? The human brain cannot distinguish between a vividly remembered image and an intense feeling from an actual event. The body responds to the imagined event with similar physiological responses as it does to the actual event. People who watch frightening movies produce heightened levels of stress hormones and their muscles react in the fight-or-flight response of someone who is actually being pursued. This physiological effect also happens when a person is plagued by the vivid memory of a frightening nightmare. As he relives the images of the nightmare, his body will tense up and he will produce more stress hormones. These physiological responses will affect his trading, making him less able to respond objectively to his experience.
Adrienne Laris Toghraie is founder and head of both Trading on Target and Enriching Life Seminars. She may be reached at Trading on Target, 100 Lavewood Lane, Cary, NC 27511, 919 851-8288, fax 919 851-9979.Excerpted from an article originally published in the August 1999 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 1999, Technical Analysis, Inc.
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