Are you typically in a state of mind in which you make good decisions or bad ones?
What factors contribute to the quality of your emotional experience as a trader?
This post will kick off a series that examines emotional experience and why it is an important determinant of success across performance fields.
Research suggests that emotions influence risk-taking decisions differently--and the same emotion may increase or decrease risk taking depending upon the nature of the risky situation.
How people channel their emotional experience also impacts their subsequent willingness to take risk, with those suppressing emotional expression showing more risk avoidance than those using cognitive strategies to reappraise situations.
Such research questions the simplistic generalization that control over emotions is good for performance; experience of emotions is bad.
Indeed, positive moods influence risk-related decision making differently than negative moods. Anticipated emotions also can influence the choices people make.
In general, people perform better under conditions of positivity than negativity.
How you approach markets helps shape the emotional experience you derive from markets, but the quality of your emotional experience also helps shape trading decisions.
Here is a simple survey of emotional experience in trading that I posted a while ago. After you take the short questionnaire, here is a discussion of what the results mean and a look at what you can do about it.
The next post in this series will take a unique look at trading experience and why it is vital to performance success.
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