Ever suddenly noticed that your heart is racing and maybe your palms are sweating? Ever feel the muscles in your body tighten up? Maybe your breathing becomes fast and shallow or perhaps you find you are holding your breath.
All of us have a natural instinctual reaction that is triggered unconsciously and almost entirely autonomically when we perceive a threat and it’s known as “our fear response”. The mere perception of a threat to our safety calls this process into action which is meant to prepare us to defend our survival. This is a very helpful process when it keeps us from stepping into oncoming traffic or racing away from a dangerous situation but it can be detrimental to us in other areas of life, especially in our trading.
The primary objective of our fight or flight response is to prepare us to defend ourselves and in doing that it shuts down all nonessential systems in the body in order to direct more energy and attention to protecting ourselves. Part of what gets turned down is our brain’s ability to focus on the small tasks so that it can focus only on assessing the larger threat situation. Rational thought based on small pieces of information is almost impossible for us until the threat assessment is complete.
While we cannot rid ourselves of an instinctual process such as fight or flight, we can take steps to prepare ourselves to avoid the triggers or to move through the threat assessment quickly so that our ability for rational thought returns. One of the key things that feeds the Fear Monkeys is uncertainty, which is something we constantly face in trading. Getting to know each of your Fear Monkeys, building a trade methodology that takes into account their different triggers and putting processes in place to reassure them can make a big impact on your trading.
The Fear Monkey shows up in all different forms and we will explore many of them as we continue to dig deeper. Not everyone has the same ones. Many of us have them to different varying degrees or have learned how to manage them. Notice when your body is telling you that the fear response has been triggered. Use the information from your heart racing or your muscles tightening to take note of what happened to set off the Fear Monkey. Write it down, name it, send me a comment about it and together we’ll explore the different Fear Monkeys and the things we can do to prepare ourselves for them … your trading will thank you.
