TRADING PSYCHOLOGY
• Physically and mentally relaxed • Alert • Feeling in control • Calm • Energised • Positive • Focussed • Confident • Effortless • Automatic
In Stress for Success, James E. Loehr explains that “IPS [Ideal Performance State] is a learnt response and is a highly unique and specific response to stress with a high emotional content. It is linked to underlying physiological and neurological events, and enables you to express your talents and skills to the best of your ability.”
Exercise: Assessing Your Trading States
What states do you experience as a trader? How do those states affect your trading performance? What states are useful to you as a trader and what do they enable you to do?
Take a look at the list of states above.
Which of these have you encountered in your trading recently?
What percentage of the time that you trade do you spend in ‘useful states’ vs. ‘limiting states’?
How much better could your trading performance be if you were to spend a greater proportion of your trading time in your ideal trading state?
Identifying Your Ideal Trading State
How are you feeling right now? How do you know? Every emotion has its own ‘signature’, its own set of physiological and psychological characteristics. Te model below shows the component parts to that signature: • Environmental factors • Physical factors • Cognitive (psychological) factors
FX
Because factors that are environmental are oſten outside of our immediate control I like to think about states being predominantly the by-product of our physiology and psychology. Tis empowers you as it provides you with the ability to be able to take control of your states to create peak states by learning to manage your physiology and your cognitive processes. Every state has its own unique signature or blueprint. Once you know the blueprints for any state then you can begin to create them. All you have to do is to think of the state and this helps you to access it.
• How is my physiology in that state? How is my breathing? How is my muscle tension? How is my heart rate? • How is my body language? Gestures? Facial expression? • How are my energy levels? Tired? Hungry? Dehydrated? • What thoughts do I have? • What images do I have/create?
In going through these questions, you begin to uncover the blueprint of your emotions. Once you know these it gives you a massive power. If you want to activate a particular feeling, you can create it by changing your thinking, images, body language and physiology to those of the signature of the feeling that you would like. Any time you make a change to any component part of a feeling, you will experience a different feeling.
For example, think about anxiety. One of the key parts of the blueprint in anxiety is quicker, shallower, upper thoracic
FX TRADER MAGAZINE April - June 2014 37
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