In volatile markets, your own lack of emotional volatility is the key to survival and successful trading. Since we are forever in one emotional state or another and since our emotions spread out in all directions like the ripples on a pond, they affect everything in their path, including your trading. Inwardly, your emotions affect how you make decisions about your trading and the results of these decisions will, in turn, produce new emotions and send them back to you. Outwardly, these emotions affect others around you and their reactions will also come back to you, giving you a double charge of the same feeling. For example, if you smile at someone towards whom you have been feeling distant, what happens? The natural response to a smile is a smile. How do you feel when someone smiles at you? Tension and hostility fade away and we feel happy and relaxed. On the other hand, if we are experiencing uncomfortable feelings while dealing with volatile markets, we will behave in rigid and unconscious ways. These behaviors are then noticed by others, who are influenced by the feelings behind them. They will also feel tense and act in accordance with these feelings. Because our emotional antennae are set to detect the slightest changes in the emotional temperature around us, we will immediately sense that there is tension coming from others around us and we in turn become more tense. This tension clouds our focus, making it easier for us to make poor judgments and create a lack of focus that prevents us from following our trading rules. Trading Volatility Evaluation: 1. Could your trading results be better based on your trading system’s expectations if you follow your trading rules? 2. Do you and others enjoy your company or do they say things like, “What’s the matter?” 3. Do you feel discomfort in parts of your body on a regular basis as you trade? 4. Are you critical of yourself and others? 5. Are you continuously disappointed because of unfulfilled expectations in your trading? 6. Do you feel unappreciated and unloved at home? 7. Do you find yourself wanting to retaliate against others, especially other traders or market makers? 8. Do you display self- destructive behavior? (i.e., smoking, drinking, drugs, gambling, etc.) 9. Do you have patterns of having to recoup major losses because you did not follow your rules? 10. Do your wife and other members of your family and friends display discomfort and insecurities because of your actions? 11. Has anyone ever told you that you have a problem and you just brushed them off? 12. Do you have major mood swings that you excuse? 13. Do you blow up excessive- ly? (If yes, how often?) 14. Do you hold onto tension? (If yes, for how long?) 15. Can you see recurring patterns in negative experi- ences? 16. How hard do you have to get hit or how far do you have to fall before you recognize that you have a problem? Do you have to reach bottom first? “Yes” answers to these questions are indicators that your emotional life can have negative consequences for trading in volatile markets. With each “yes” answer, think about what the consequences of negative emotional boomerangs are for your trading. In order to answer the last question, it is helpful to visualize what you think is the bottom. For example, hitting the bottom for you may be having to get a real job or having your family throw you out, or maybe you need to feel what it is like to live in the streets and be homeless. Do something to transform the problem. Here is an exercise to help you transform: I. Breaking the Pattern with Mental Rehearsal A. Close your eyes and remember backwards from this moment those incidents (one at a time) in which there was an interruption in the pattern of your trading because of negative feelings. B. Recount your emotions and physical reactions. 1. What did you feel? 2. Where did you feel it? C. What happened just before the incident? 1. What did you see? 2. What did you hear? 3. What in particular stimulated your behavior? 4. Whom do you blame? D. Think of a trading pattern interruption incident like this happening in the future. Handle the chain of stimuli differently. 1. Get up and take a walk. 2. Breathe. 3. Stretch. 4. Close your eyes for 5 minutes. 5. Drink some water. 6. Shake your hands and feet and roll your head. 7. Say “cancel, cancel” to negative thoughts. II. New Behavior Record Keep a record of when stimuli for negative incidents occur and write down how you handled it differently. III. Preventive Breaks A. Take mini breaks every twenty minutes. (Tension begins just by staying in one place doing the same thing.) B. Stand and stretch. C. Breathe 4 seconds in and out for 8 seconds. D. Call a friend and talk about things that are fun. E. Look through a picture magazine. IV. Evening Enjoyment Do something that will make you and others feel good in the evening. V. Assisting Coaches Ask significant others to assist you in noticing stress built up in you and give them permission to ask you to do something relaxing, or give you a note saying “Take a break.” Conclusion While it is important to express emotions, the way you express them can be either constructive or destructive, especially when you are dealing with a volatile market when you need complete emotional control. To gain this control requires you to be aware of the things that trigger your emotional upsets and then the outlets you use to release these emotions. By visualizing a different response, by recording your behavior, by taking stress–reducing breaks and by enlisting the help of those closest to you, you will find yourself in the calm eye of the trading storm instead of being tossed about in its fury.