Dealing with performace anxiety

In my last blog I commented that performance anxiety is the most common psychological problem that I encounter among traders. It can manifest  in many different forms; during trading slumps, when traders raise their position size and increase risk, when the need for cash adds too much pressure to individual positions. Bottom line performance anxiety interferes with peak performance.
Below are some suggestions for dissolving performance anxiety

Self-hypnosisWhen a trader is responding to a trading situation with any form of anxiety, I’ll ask the trader to close his eyes, breathe deeply and slowly from their stomach, then visually create their own relaxation spot, this can be a room in their house or a beautiful location that has a special meaning to them. Wherever the location is, I asked them to make sure it relaxes them now. I then ask them to raise their right hand above their head and slowly let it drop as they become more relaxed. Focusing on their breathing and the calmness of their imagined environment. I’ll suggest they add the sound of tranquil music or water lapping onto a beach. Noticing which part of their body feels most relaxed. The exercise ends when their hand falls back to their side and they are now totally relaxed and ready to focus on trading in a calm and alert manner.  This exercise should last approximately 15 minutes.

The exercise is a self-hypnosis technique, the traders offer themselves suggestions during the time that their hand is moving down to their side. For example, they might suggest to themselves internally that, as their hand moves down, they will start to accept a recent loss and they are now willing to put it behind them. To achieve best results, I suggest they enter a highly focused and relaxed state prior to the self-suggestions and they perform the exercise thoroughly when required. My clients tell me, the more they practise this, the easier it becomes to enter the focused state of relaxation and invoke their own suggestions. In time it’s possible to reach a highly relaxed state by simply taking a few deep breaths and raising their hand. Repetition is essential to performance mastery.

Reprogramming Anxiety Through feedback  This technique can be applied to a variety of emotional trading situations that affect performance. For the last 4 years, I’ve been using a heart rate monitor, which offers us a quality visual feedback, which helps traders to monitor their progress and visually determine whether or not they’re in a “peak trading state“. The first step of feedback training, I share a technique that assists my clients to enter a peak zone. Similar to self-hypnosis, I’ll suggest they regulate their breathing and narrow their cognitive focus. This, technique alone, is an extremely useful skill that can be a preventive measure regarding performance anxiety and stress. When the trader has mastered this, I will then add a second component to the exercise.

I ask the trader to vividly visualize a mildly stress producing trading situation while hooked up to the heart monitor. When the trader has repeatedly visualised this low-anxiety situation and can sustain a “peak state” which keeps their heart rate down to a low level, I will then move on to a higher-level anxiety inducing scenario. It is much easier to imagine a variation of the same anxiety scenario as above. Finally we’ll move to the highest anxiety-producing situation, repeating each scenario several times incorporating the different variations, until the trader can remain in a calm focused state even in the most testing of situations. The advantage of this method is that it assists the trader to do what they need, to do to get their minds and bodies under control and then move towards a peak state. This awareness will then be carried forward into real time trading. This can occur because all the trader is required to do is focus attention and regulate breathing during stressful or anxious periods during the trading day.

The most important aspect to remember is, both methods centre around shifting your state physically, emotionally, and cognitively as a way of dealing with performance pressure. By enhancing our control over our states, we can start to feel and think in ways that are incompatible with performance anxiety. My experience is that any trader can learn this skill, practise may not make perfect but it will certainly assist you to deal with performance anxiety. You decide which level of self-mastery you achieve.