Forex & Fight or Flight

Before you start trading we think it’s a good idea that you understand the physiological impact trading will have on you.  The first thing you need to know is your nervous system is going to work against you as a trader. As a part of our physical makeup, we all have what is called the autonomic nervous system, which regulates our subconscious biological functions such as heartbeat, digestive processes, perspiration, vision etc. Within the autonomic nervous system are the sympathetic and parasympathetic branches. The sympathetic branch is what we would rely upon if we are angered or afraid. It is what increases our heartbeat and adrenalin flow during times of stress, making us literally “jumpy”. This physical change is also what we call the “fight or flight” response, which while useful 10,000 years ago when we lived in caves, can make for a very tough learning environment to be constantly immersed in. The excitement of making seemingly easy money, followed, sometimes just seconds later, by fear of loss and failure will break most people down quickly. The emotional ups and downs we create in our minds, followed by the physical changes to our blood pressure and adrenal glands makes for a tough environment to first learn, and then retain knowledge in. The automatic “fight or flight” response hard wired into your head will work against you as a trader. There will be times when you click that mouse and enter or exit a trade and instantly ask yourself “why did I do that” because you realize you are not following your trading plan. Before you get angry at yourself, realize that you are not the only trader to have ever let emotion override logic. In fact you are programmed to react that way.

Luckily for us, along with the “fight or flight” function regulated by the sympathetic branch of our autonomic nervous system, there is also the parasympathetic branch which can produce a calming effect on ourselves and our bodies.  It is this sympathetic branch that we want to stimulate as we are learning and studying our trading lessons. You will get the most out of your studying in a relaxed and pleasant atmosphere. If you are currently trading, you should consider taking a break from it while you study this material. Learn what stimulates the sympathetic branch of your autonomic nervous system, and engage in that activity prior to studying this material, and then afterwards. Get in the habit of taking care of your mind and your body in this way until it is habitual. You will find that by taking the time to put yourself in a relaxed, meditative state before starting your day, and again before retiring in the evening, that you will remain much calmer and more focused then the millions of other people online who are risking their hard earned money every day in the market-place.  

Jay Norris is the author of  Mastering the Currency Market, McGraw-Hill, 2009 and a Trading Instructor at Trading-U.com and a Senior Market Strategist with BrewerFX in Chicago. To see details of Trading-U’s available course work go to Trading Course  To schedule a complimentary, interactive tutorial with Jay on determining market direction and hear more about “Live Market Exercise” go to One on One Tutorial

DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential that changing political/economic conditions may substantially affect the price/liquidity of a currency. Investors may lose all or more than their original investments.

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About Jay Norris

Jay Norris is Director of Education at Trading University, has over 30 years of trading experience, and is the best selling author of "Mastering The Currency Market", McGraw-Hill, 2009, and "Mastering Trade Selection and Management", McGraw-Hill, 2011. He has also been published multiple times in Technical Analysis of Stocks & Commodities magazine.

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