Trading Psychology: Be a Healthy Trader
Most people would agree that being healthy is one of the most important things in your life, whatever your profession. As a trader, you may have already experienced the stress that goes with trading. In fact, trading is fraught with stress, and stress—especially the kind of chronic stress many traders are familiar with—can be very damaging to one’s health. Chronic stress has been linked to all the major diseases and may cause premature death. No trader is free from the stresses of trading. Fortunately, there are a couple of things you can do that may effectively help you combat stress, promote your health, and, perhaps, even your longevity.
We all know exercise supports good health, and it plays a special role in stress. If we could bottle aerobic exercise, says Harvard MD John Ratey, we’d have a miracle drug. Aerobic exercise such as jogging, swimming, biking and other activities that get your heart pumping, is one of the most effective things we can do for stress. Research has shown that consistent aerobic exercise not only significantly reduces stress and its ill effects, but it can also be highly effective in dealing with anxiety and depression—frequent companions of chronic stress. In fact, jogging is just as effective as Prozac and the other medications designed for depression and anxiety.
As a side benefit important to traders, aerobic exercise also aids in learning. In this regard, Dr. Ratey calls aerobic exercise “Miracle Grow” for the brain. Exercise releases neurochemicals that help us learn and remember. Research has shown that students improve academic performance by 17% in only one semester with a period of calisthenics before classes. If you really want to learn how to read the markets, jog before your study your charts.
Mindfulness is another way to directly reduce the stress in our lives. Mindfulness is an ancient mental practice that helps us cultivate a mental space where we see our thoughts and feelings as just thoughts and feelings that quickly pass, not something permanent or even something we must respond to. Mindfulness helps us to see that fear, anxiety and the stresses of trading are really manufactured in the mind and often don’t reflect reality. How many times, for example, have you gotten out of a trade for fear of losing money and the market continued to move in your direction?
Mindfulness positively affects us on multiple levels. It is an effective stress buster. One of the best stress reduction programs for people who are otherwise mentally healthy but have high stress is based on mindfulness. Brain scan research of ordinary people taught mindfulness shows that the brain’s fear center—the amygdala—actually shrinks with the practice of mindfulness and connections between the fear center and other brain regions that interpret and control our fear response strengthen. These actual changes in the brain correlate strongly with reported reduction in stress. From the perspective of trading psychology, mindfulness is the most effective method to learn not to become hijacked by emotions and keep yourself focused on what is important for your trading, while at the same time dissolving the tensions and strain we feel from stress.
The most recent research is also showing that mindfulness impacts our DNA and may even promote longevity. Scientists have found that the protective caps at the end of chromosomes, called telomeres, can be positively influenced by mindfulness practice. As a cell naturally divides and reproduces, its telomere shortens. As telomeres shorten, our cells age, become vulnerable to degenerative disease, and die more quickly.
The practice of mindfulness promotes the maintenance of telomere length. In clinical studies, those who practice mindfulness retained telomere length compared to those who didn’t practice mindfulness. One small study has shown that people who practice a specific kind of meditation lengthened telomeres compared to a control group. Mindfulness appears to affect our DNA by reducing stress and arousal, which have been linked to telomere length.
Getting enough aerobic exercise and practicing mindfulness will not only reduce your stress and help you trade better, but they may also help maintain your health and potentially live longer, so you can enjoy the results of your trading to the fullest. For more on mindfulness and trading, you are invited to visit the author’s website: TradingPsychologyEdge.com