Shrink Rap: Neutralizing Emotions During Trading, Part 1

In a two-part series of articles earlier this year on tempering emotion, I offered an argument countering the commonly espoused belief by so many experienced traders that emotions can only be disruptive while trading.

I gave examples of how strong emotions may be tempered to valuably assist trading. I argued that it was time for traders to go beyond the all-or-nothing thinking about emotion that is so widespread in the trading community.

Now I want to introduce a tool for neutralizing emotion, rather than tempering it.

For example, when fear leads you to pull back, or you have greedy thoughts leading you to take unreasonable risks while trading, there are ways you can neutralize both feelings and thoughts so they can't get the best of you. There's a time to respect fear and use it to be cautious, and there's a time to push past it.

Invoking a Trigger

This tool, called a trigger, works when greedy thoughts lead you to push too hard and make trades that are too risky. It's basically a self-regulation strategy for altering your mental state. The trigger is so named because it sets off a positive action that counters the negative emotion. The tool is a sense-related behavior designed to neutralize whatever emotion you want to pull away from. When you use a trigger, you're simply using a body-mind association to take you out of one state and help you enter another.

Let's say you're feeling fear of initiating a trade and you want to push past it. You can create a trigger that will remind you of a neutralizing thought that pulls you out of the fear.

The trigger may be to look at something in the room, to hear a sound, or to touch something. Sight and touch tend to be the best triggers for many people, as they're the most powerful primary sensory channels.