Rush, Rush, Rush
Life is hectic. Every day it can seem as if there are more and more demands on our resources. Often we have to deny our body the rest it craves, and survive on energy drinks, coffee and chocolate bars. As you’ve probably experienced, it is impossible to stay completely pumped up, every moment of every day.
Personal energy doesn’t work that way. We get tired. We need time to rest and recover. Without a bit of down time, we’ll end up burnt out and totally ineffective.
This also extends to our activities related to trading. Many traders succumb to pressure and this leads to ineffective decision-making.
When you first start trading, the importance of being able to handle your own stress levels may not seem to be a priority. Particularly if you haven’t placed any money in the market, you may wonder why traders feel any pressure at all!
Let me tell you, I felt the same way about golf until my first serious game of pitch and putt. “What’s all the fuss about? You’re only chasing a little white ball around a field. How hard can that be?” I thought to myself. After my first ball dropped into the pond, and my second ball failed to connect with my golf club...7 times (but who’s counting), I realised there must be more to this game. A minor hissy fit later, I now understand why golfers get the yips and have trouble performing.
Trading is a little like that. Before you begin, you imagine you’ll be cool and calm, no matter what the circumstances. However, all it takes is a few stocks to misbehave combined with a little time pressure and you’ll probably understand how easy it is for traders to blow their stacks.
That’s why it’s important to learn some stress reduction techniques, even before you put on your first trade.
Athletes put huge amounts of effort into managing their personal energy levels. There is a lot we can learn from the field of sports psychology that we can apply to our own lives. Jim Loehr has been studying athletes’ behaviour for over thirty years. In a particularly revealing study about tennis players, he noticed that it wasn’t necessarily the most skilful athlete that won the match.
In the 16 – 20 seconds between points, winning tennis professionals did something completely different with their time. They visualised success. They relaxed and refocussed. They controlled their breathing and posture.
As a result, their heart rates dropped by up to 20 beats per minute. They recovered their energy, and this edge consistently lead to winning behaviour on the court. Loehr concluded that a player’s up time was only as good as his down time.
This article will give you some ideas to help you utilise your down times between activities throughout the day. One essential skill is to learn how to harness the power of effective breathing techniques.
This skill will also assist you in trading with calmness and clarity, and enable you to combat the mood swings that make following your trading plan the last thing on your mind.
Learning how to breathe properly is a central skill, core to the disciplines of yoga and meditation. It is also a key skill harnessed by singers as they attempt to hit challenging notes.
When we are stressed, we naturally take faster, shallower breaths to prepare us for action. Traders under pressure can often gasp for breath when a position goes against them. Objectivity flies out the window and spur of the moment trading decisions can be the result.
Most of us spend our days taking these shallow breaths, inadvertently creating tension – even when we are aiming to relax. Just because you are currently breathing, doesn’t mean that you are breathing in the optimal way for health and relaxation
By becoming more aware of our physical processes, we can develop a sense of calmness that we can ultimately summon at will.
Breathing correctly can help to lower your blood pressure, increase your concentration, and help you focus, particularly during times of trading pressure.
How to Breathe
Place the palm of one hand on your stomach and the palm of the other on your upper chest. Inhale as you would when you take a normal breath. Which hand rises first? If the hand on your upper chest rises first, this means that you are taking upper chest breaths.
If the hand on your stomach rises first, you are taking diaphragmatic breaths. If they both rise and fall in tandem, you are taking a mixture of the two.
Drawing in breath from the diaphragm is a core skill. By learning to breathe using our lower abdomen, diaphragm and lower chest, a message is sent to the brain that short circuits the stress cycle.
When utilised with the correct posture, it will assist by conserving energy, as well as calming the mind to help you get into the ‘zone’ of effective trading methods.
Although initially this type of breathing may seem awkward, with practice it can become a part of your unconscious trading routine. Let’s have a look at the distinct steps required to take a diaphragmatic breath.
In a seated position, sit up straight with both feet firmly on the ground. Place your two hands on your stomach, with only the fingertips touching. Your left and right hand should only be connected via the longest finger.
Take a deep breath in. Your aim is to fill your lower stomach with air. Breathe into the lower abdomen, and as you do, you will find that your fingertips will be drawn apart. If it helps, you may need to consciously puff out your stomach to achieve the desired effect. Repeat 3 times.
Move your hands upwards so that they are now in line with your diaphragm, resting comfortably on your lower chest. You should be able to feel your lower ribs. Your fingertips on each hand should be lightly touching. When you breathe in, aim to fill your lower chest with air, instead of your stomach. You should feel your fingertips move apart as you breathe in, and as you breathe out, your fingertips should naturally come back together.
Aim to only breathe into your lower chest. Try to inflate that as much as possible to get your fingertips to separate. Repeat 3 times.
Move your hands so that they are now positioned on your upper chest. With your fingertips touching, breathe in, and aim to breathe only into your upper chest cavity. Your fingertips should move away from each other when you breathe in, and come towards each other when you breathe out. Repeat 3 times.
Step 5 - The Combination Breath
Steps 1 – 4 give you the basics about how to take a complete breath – you just need to combine them. To complete a breath cycle, take one full breath, firstly into your stomach, then into your lower chest and then into your upper chest. This is how to breathe in correctly. The one breath in should be capable of inflating each of the three specified areas in sequence.
Exhale naturally. Experiment with the exhalation if you would like by firstly deflating your upper chest, then your lower chest and finally your stomach. You have now completed one full breath cycle. I suggest that you complete at least three full breath cycles.
Breathing correctly will help you to focus and attend to the task at hand. I challenge you to practise this technique at least three times today. If you only have time for 1 full cycle, that’s fine, but you will attain the best results if you repeat it at least three times. As a suggestion, try it before you get out of bed, then again at lunch, and finally before you go to sleep at night.
Here is what one trader, Caroline Semisi from www.tradinggame.com.au, had to say about the technique that we have just covered: “This [method] has helped me in many areas of my life. If I ever feel like I am getting stressed I concentrate on my breathing and it helps calm and put things into perspective. It is quite amazing.”
Any time you feel stressed throughout the day, try a full breath cycle and observe how this makes you feel. If you are asked to make a snap decision, try at least one full breath cycle before you give your answer.
Before you speak to someone who you do not relate with, complete a full breath. This only takes you an extra second or two, but the results of your effort can sometimes last a lifetime.
It may take you a few days to fully develop this skill. As far as I am concerned, this skill should be taught in schools, and even children as young as 5 years old can master and apply it. As an asthmatic, I used to teach this technique several years ago to children for the Asthma Foundation.
This method helped to calm the little ones down when they were in the throes of an asthma attack. It is incredibly effective at a deep level, and is one of the simplest methods available for calming your mind and body.
Throughout the day, practising this technique can make the most of your quiet times and sustain your energy during more taxing periods. When it comes time to trade, you will be more relaxed and focussed, and much more likely to make effective decisions.
For some people the effect of correct breathing methods will be immediate. Others may have to practise the skill for a whole week before it begins to feel more natural.
Wherever you lie on this spectrum is fine. Give yourself time to adjust to a new skill. Try this technique while you are trading and note the effects on your mind-set.
Louise Bedford has a free 5-part e-course waiting for you at www.tradinggame.com.au. She is also the author of The Secret of Writing Options, The Secret of Candlestick Charting, Charting Secrets and Trading Secrets.