Monday, April 05, 2010

Trading Stress, Burnout, and Renewing Our Emotional Fuel

A while back I wrote a post on the topic of what stresses traders out. When traders face high levels of emotional stress over time, the result can be a form of burnout. Overwhelmed by obstacles and challenges, traders shut down. They stop learning, and they stop taking the actions needed to move their progress forward.

In a past post, I highlighted five signs of psychological burnout among traders. Many times, that burnout results when trading is no longer providing a sense of purpose and accomplishment. When traders lose sight of the process of trading--and improvements they're making in their trading processes--it becomes easy to fall into a rut where P/L dictates mood. That can make slumps very difficult to endure.

Very often, it's not just the stresses of markets that overload traders; it's also the stresses that traders can impose upon themselves. It's easy for achievement-oriented traders to become their own worst enemies when they're not making money: instead of focusing on constructive improvements, they beat up on themselves and add self-imposed stress to trading pressures.

Changing our self-talk can be a very effective way of defusing stress. The key is to become a good observer of our own thought processes so that we can ask whether we are approaching a situation in a constructive or destructive manner. If setbacks are treated as learning experiences, they are unlikely to generate stress and distress. If we view setbacks as failures and reflections on our competence, then we generate our own stress.

One of the most important steps we can take in preserving and enhancing our motivation and drive is to stay goal-oriented. If we are fixed on a meaningful goal, we're likely to acquire energy. If we're fixed on our shortcomings (and blaming ourselves for those), we're likely to lose energy. Burned out traders use up their emotional fuel. A key to longevity--and successful self-coaching--is keeping the meaningful goals always in front of us, so that we are always renewing our emotional fuel.