Behavioural Tactics to deal with Primary Emotions
Till now, we have discussed strategic tactics to deal with primary emotions and behavioural biases which will to a large extent help traders avoid commonly made mistakes. Let us now enlist some simple behavioural tactics to ensure a strong mental state of mind.
1. Briefly change your environment setting when anxious, scared or dejected
It is very helpful if one leaves the trading room for a short while when they feel the emotions of anxiety, fear and dejection. The best course of action would be to go to an open place in such a situation, either your balcony or garden or even the building compound. Fresh air helps to rejuvenate and brings the body back to the original state.
2. Maintain a journal of the times when you lost control over your emotions
Recording such situations in a journal helps you to identify a trend as to when you react the most and how you react. It also helps you to track your improvements in controlling emotions. It mentally prepares you to react differently, in a more composed manner, when the same situation arises again. Revisit the journal when you are in check of your emotions so that reading about those situations impacts you with a greater force and instills a feeling of remorse deep within. This remorse will act as a reminder the next time and help you control your emotions with greater ease until it becomes a part of your DNA.
3. Deep breathing exercises
There are several videos available on the internet with a step-by-step guide of deep breathing exercises. Some exercises that can be followed are - belly breathing, alternate nostril breathing, resonant breathing, sitali breath, pursed lip breathing, et cetera. These exercises help you to normalise your blood pressure and heart rate thereby, de-stressing your mind and helping you reach a state of equilibrium.
4. Pin down quotes near your trading set-up as a reminder to not fall prey to greed, hope and loss aversion
These quotes act as a constant source of reminder to keep your emotions in check and also remind you of the aftermath of losing control of your emotions. A reminder of what all you can lose often acts as a driving force in the positive direction wherein you put your heart and soul to try and avoid such a situation.
5. Close your eyes before starting to trade on a fresh day to visualise yourself making trades and taking losses
Visualising and anticipating negative events is a way of conditioning yourself to a highly volatile situation. This prepares your mind for such a situation and thus, you are in better control of your emotions and actions when this situation actually arises.
6. Do not overexert yourself
Mental health has a direct relation with physical health. Lethargy will cause you to take sub-optimal decisions in the trading arena. Getting proper sleep is crucial for the mind to function to its best potential. Hence, one should take proper note that he is not starting his day already tired because that will reflect not only on his trades but also his trading psychology, that is, the ability to manage his emotions will also be particularly weak on such a day.
7. Maintain your energy levels by consuming fluids/peanuts/fruits continuously
This is in continuation to the previous point. It is not only important to start your day energised but it is equally important to remain energised throughout. Hence, one should constantly consume energy drinks (avoid packaged items - prefer fresh juice, barley, glucon-D), fruits and high-protein peanuts. To ensure that this becomes a part of your daily routine, one should try and fix the timings of consuming these items.
8. Pursue a hobby every day
Make it a habit to do something that you enjoy doing every day. This will prevent a person from thinking about trading even after the day has ended and will help his/her mind rejuvenate. Hobbies can vary from reading books to even meeting your friends every day for a game of cards. It should just be something that you thoroughly enjoy and which helps you distract yourself from the trading world.
