Friday, October 07, 2022

How Can We Stay Chill In A Volatile Market Environment?

When I began my career working as a performance coach for traders, the first poster I placed in my office was a signed photograph from a military sniper.  It showed the sniper lying in the weeds, well camouflaged, and looking dead ahead with rifle poised.  The absolute stillness and focus of the well-hidden figure was striking.  What makes the best snipers special is that, when battle conditions heat up, they have trained themselves to slow down.  It's when multiple high-value targets come into view that they breathe slowest and become most still.  Opportunity brings focus, not excitement.  

The most common psychological issue I'm hearing from traders today is how to stay calm and focused during volatile market conditions.  It's natural that directional traders view lots of movement as lots of opportunity.  The excitement that brings when markets start to move your way, the frustration that brings when markets reverse on you--all have the potential to disrupt our planning, our concentration, and ultimately our best trading.

It's under these conditions that I find training with biofeedback to be most helpful.  Below are some links that can get you started looking into the topic.  It's also a topic I discuss in The Daily Trading Coach, particularly in the sections on Cultivating the Quiet Mind and behavioral Exposure methods.  In exposure work, we first learn to slow our heart rate and lower our body's level of arousal through the help of such methods as heart rate variability feedback and brain wave feedback.  Once we learn what we need to do to keep us chill, we then actively visualize trigger situations that tend to stress us out.  For example, we might visualize a market going against us and having to stop out with losses.  We vividly imagine the disappointment and frustration of the situation--while keeping ourselves in a state of low arousal and high concentration and monitoring our feedback.  We do this again and again and again in our practice, until stressful situations no longer take us out of our zone.

This requires regular practice, but is amazingly successful in rewiring our emotional responses to situations.  Our job is to climb the mountain of success, not carry mountains of fears and worries on our shoulders.  It is indeed possible to rewire ourselves and reprogram our responses to challenging situations.  When we are encountering volatile and choppy market conditions, this enables us to become like the sniper:  more and more focused as opportunity presents itself.

Further Reading: