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Deal With Negative Emotions Positively

Recognising Performance Limiting Emotions

What states would you say are negative for you? Which feelings detract from your trading performance?

Which emotions do you experience as a trader that prevent you from performing to the best of your abilities? How do they do this?

How often do you experience these emotions?

Deal With Negative Emotions Positively

How do you deal with them?

Emotions are natural and are a part of being human. It is important to recognise that learning to identify and understand your emotions is more important than trying to suppress or control them in most cases. One of the most important areas to develop awareness in is in assessing which of the emotions you experience are performance enhancing i.e. they are Ideal Trading States against those which are performance limiting. When we look at classifying emotions as positive or limiting we have to do this in the context of the environment we are and so in our case we are looking at this purely from a trading perspective.

States that might be perceived as being limiting for traders include:

  • Anger
  • Frustration
  • Fear
  • Anxiety
  • Boredom
  • Greed
  • Hope
  • Stress
  • Overconfidence

Deal With Negative Emotions Positively as they Affect Performance

Negative states have an adverse effect on performance because the emotions that you are accessing do not enable you to perform the actions that are required for trading effectively. When we experience high intensity negative states such as anger, fear, frustration and any states that create stress within us we get changes in our body chemistry that affect our ability to perform.  Under these conditions the blood flow  to the cortex (rational part of the brain required for logical thinking, objective decision making etc) within the brain is restricted resulting in cortical inhibition, a process of ‘shutting down’ of the ‘smart brain’ leaving us with access only to our  ‘emotional centres’. The result of this is that we are now trading our emotions and not our strategy. When we are in such states our ability to trade our plan, run profits, cut losses and any other logical trading processes is dramatically reduced and the risk of poor quality, undisciplined trading is increased.

It is critical to be able to recognise when your state has shifted to a limiting state. How do you do this?

Think of a time when you were experiencing a limiting state. How did you know you had that state? What were the signs? What were you thinking? What were you imagining? What was your physiology – breathing/muscle tension like? How about your body language?

The aim is to recognise the signatures of your emotions to be able to spot the early signs that you are shifting into a negative state or are in one, and to then be able to act up on this as appropriate.

Dealing With Negative States Positively

Awareness is the first stage of dealing with your negative emotions and this can be done through ‘checking in’ – ask yourself ‘How/What am I feeling? How do I know? The second stage is to deal with the feeling. One great technique is the ‘Sedona Method’ which I have detailed below for you.

The Sedona Method

This is a well known and used technique that enables you to ‘release’ any negative thoughts or emotions that you may be feeling.

What am I feeling right now?

Focus on the feeling you have.

Could I welcome and allow it?

Welcome the feeling and let it happen.

Could I let it go?

Ask yourself ‘Could I let this go?’; note that both yes and no are acceptable

Would I let it go?

Ask yourself ‘Am I willing to let this go?’

If you get a no then ask ‘Would I rather have this feeling or would I rather be free?’

If you answer that you would still like to have the feeling move on anyway.


Ask yourself ‘When?’

This invites you to let it go now. Letting go is a decision that you can make anytime you choose.

If you can get into the habit of using this process every time a negative thought or feeling arose then you could release your way to feeling much more positive and to trading to your potential for a lot more of the time.

Sedona Method by Hale Dwoskin (Sedona Press 2003) (www.sedona.com)