There is natural rhythm in the universe. Day follows night, the tide ebbs in and out, the seasons change from autumn to winter to spring to summer and the fauna and flora all follow their natural processes during the season changes. Squirrels store acorns, birds and whales migrate, bears and snakes hibernate, trees lose their leaves and plants flower all according to their natural rhythm. No thinking takes place here, the fauna and flora on our planet follow their instinctive natural processes that are hard wired (programmed) into their anatomy.
Human beings also have a natural rhythm on a day to day, month to month, year to year and decade to decade basis. However, we also have a brain and a heart that is capable of thinking and causing feelings. And this is where we can and do differ from the fauna and flora. We break our natural rhythm by feeling anger, frustration, betrayal, revenge, anxiety, uncertainty, hate, doubt and fear. Sure, in the heat of the moment our logical thinking minds will justify as right why we feel these negative feelings.
For example, anger triggers hormones that create tension and anxiety in the body and these hormones then shut down parts of the brain to enable dealing with the anger-created state of tension. The parts of the brain that are shut down also cause clouded judgment and poor decision making. This leads to steps in your process not being followed correctly and even not seeing things that are typically obvious to you when you are in your natural rhythm. This is one of the causes of ‘perceptual blindness’. In short, anger makes you stupid as does hate, fear, doubt, revenge and frustration which manifests in the form of mistakes and errors that you wouldn’t otherwise make.
When you feel any of these negative feelings you will be incapable of executing actions that you would normally execute “blindfolded” when in your natural rhythm and this will affect your trading processes and the outcomes of your trades. Furthermore, feelings tend to spiral in the direction that they are going in, negatively or positively until an opposite force is brought to bear on them.
To ensure that you are able to stop negatively spiraling emotions and turn them around, you need to understand and acknowledge what they can do to you, and then train yourself to recognise your negative emotional state and define a process to turn them around to create a confident state of mind in the heat of the moment.
This process may be different for different people so you may need to discover what works for you. However, we all have the same chemicals in our bodies and mechanisms in our minds so there is a good chance that similar processes will work for most people. Experiment with breathing patterns and repeating affirmations through auto-suggestion that slow your body down and start generating chemical reactions that counter those generated by the negative feelings mentioned above and start positive spiraling feelings. In later issues we will deal with methods and drills. I can assure you that, amongst other things, your trading outcomes will improve.