Flight or Fight – is stress a good thing for traders?

This article was written by Yael Warman, Content Manager at Leverate.

I never read the tabloids. Except when I’m in line at the grocery store.

Yael Warman, Leverate

Yael Warman, Leverate

There is no better way to waste time while waiting than by reading a sensationalist newspaper or trashy magazine while waiting for your groceries to be scanned.

Yesterday I was at the grocery store standing in line at the register and a headline on one of the tabloids caught my attention and so I started reading the story. A woman named Allie had just finished putting her baby to bed and settled on her couch to watch some TV when she heard a loud knock on the door and a man screaming. She looked through the peephole and didn’t recognize the man so stepped away from the door, got hold of her gun, which she safeguarded in her bedroom and dialed 911.

As she told the dispatcher what was happening, the knocks turned into pounds. She ran towards her baby’s bedroom and as she approached the hallway, she saw the man, inside her home. She fired twice – phone still in her ear- as the man fell on his back.

I was well immersed in the story when the guy behind me pushed his cart against mine letting me know it was my turn in line so I didn’t finish the story, but ever since then, I’ve been thinking about how brave she was. I imagine her tunnel vision as her natural instinct to protect herself and her baby kicked in.

Society wants us to relax so badly that “Keep Calm” has become one of the most popular taglines on earth, but in this particular case, stress saved this woman’s life. Her adrenaline spiked and gave her clear vision of what she needed to do in order to stay alive and keep her baby safe. So it made me think: stress cannot always be so bad after all.

Well, turns out it isn’t. Stress can – besides save your life in unfortunate circumstances – be useful in every day instances as well, like when you go about your daily trading. When you stress, adrenaline spikes though your body and you face that flight-or-fight reaction. You can either become alert and ready to deal with upcoming challenges or become paralyzed with fear. If you are able to manage your stress to make you more alert and focused, stress can help you improve performance.

So how can you learn to handle your stress?

  • First, know that losing is part of the package. It happens and one single losing trade, or even a string of losing trades do not equal a catastrophe.
  • Know that as long as you implement proper risk management, you have an acceptable rock-bottom.
  • Learn to develop a positive reaction towards market events and towards your trades.

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