In last week’s particularly relevant post, we talked about how changing and managing your environment is vital to maintaining your health and profitability. This is true at the best of times, but with more and more cities, states and countries encouraging some form of shelter-in-place, we’ve found ourselves more constrained in our environment, and thus more reliant on those environments to keep us working at our best. Or, at least, the best we can ask of ourselves during this uncertain times.


This post is part of a series on Brett Steenbarger's The Daily Trading Coach
View all posts in the series here.

This week, we’re going to turn back inward a bit and look at how to change and manage your internal environment: your emotions. Emotions of all sorts are running very high right now — anger, fear, greed, loneliness — and without the tools to address, accept, and process these strong emotions, we’re left without a vital tool in our toolbox to handle ourselves and the markets as the COVID-19 pandemic continues.

Because of my personal experience with psychotherapy — as a patient, not a practitioner — this post may focus less on trading-specific advice than others. But because all of us are so much more than our positions in the markets, I think, and hope, and that everyone reading will find something of value for themselves here regardless.

Before I dive in, I want to make a small disclaimer. In this article, when I talk about trauma and emotional response, I am excluding generally members of the armed forces, and survivors of severe abuse of any sort. I am not a trained psychologist, and as such would not dare to tackle the emotional vulnerabilities that those two groups suffer from disproportionate to the general populace. If you fall into one of those two categories, I hope you find something worthwhile in this post, but please do not interpret my writing here as minimizing your experiences. This post — and all of my writing — deals with emotions of a more everyday nature.

As a reminder, and recommendation, this blog is not meant as a replacement for reading Dr. Brett’s own words. I am not a trained psychologist, and the ideas and suggestions Dr. Brett packs into his short lessons are greater in number than I can cover entirely here. Because of that, I focus on what in each lesson resonates most with me, which may be different from the lessons that resonate most with you. You should buy your own copy of his book, read along, and let me know on Twitter whether different parts of his lessons speak to you more urgently than they do to me. I’d love to hear from you.

Lesson 5: Transform Emotion by Trance-formation

Whether we like it or not, humans are, by and large, emotional creatures. The degree to which we feel these emotions varies from person to person, but, excepting the true sociopaths of the world, we all deal with them. And, more importantly, we all react to them, and through them. Often this is less learned behavior than it is hereditary. For example, my parents have both dealt with, and continue to live with, forms of anxiety and depression, so it’s no surprise that my sister and I have both had to deal with the same tendencies.

Because our emotional triggers and reactions are, to this degree, innate — or “hardwired” to use Dr. Brett’s term — without extensive psychological work, we often don’t realize the degree to which they influence our day-to-day life. Like a computer’s operating system, our emotions tend to run in the background, and we don’t pay attention to them until something goes wrong. And sometimes, even then we blame the problem on the application that crashed, not the underlying system.

On some level, this is natural. If we conceive of our underlying emotional state as static, something we’re born with, then maybe there’s nothing to do about it. It is what it is, and any problems have to be dealt with at a higher level, where we feel we have more control. But by letting our emotions off the hook like this, we miss a critical piece of the change-based work we have to do as our own coaches. While we can’t necessarily change how our mind and body process emotions at the “operating system” level, we can work on changing how we respond to these emotions.

If the emotions are “positive” — happiness, love, comfort, etc. — it tends to be much easier to process them in a healthy way. After all, who doesn’t enjoy feeling good? It’s the harder emotions — sadness, frustration, greed, disappointment — that we don’t like confronting. Again, this makes sense, but ignoring strong emotions doesn’t make them go away. In fact, and pardon the obviousness of the metaphor here, the deeper down you push them, the further under your skin they end up. From there, they can and will pop back up to the surface in unpredictable, and often damaging ways. Much more difficult in the moment, but more healthier in the long run, is taking the time to sit with these hard emotions, feel them, and learn what you need to learn from them. Often this is the only real way to process them. Anything else is just a delaying tactic, and is more likely to cause problems down the road than it is to actually help you.

One of my favorite pieces of knowledge from Kim Ann Curtin is about gazelles. After a gazelle escapes a predator, it will find a safe spot behind a bush or rock, and, as she puts it, “tremble out” the experience, the adrenaline, and the trauma. Once the gazelle does that, they’re fine. They’ve processed the incident in their own way, and can now rejoin their herd having fully moved past their near-death experience.

Humans, for the most part, aren’t like that. Too often, except in extreme cases — the death of a family member or friend, or some other truly life-changing event — we don’t give ourselves the space and time we need in the moment to process trauma. We do not live in a society where this is truly possible or encouraged by the cultural mores around us. Instead, we hold on to trauma, often until it erupts in destructive ways. Even though our struggles are often more nuanced than literal life-and-death scenarios, there are ways we can try to make space for our own healing in a more gazelle-like manner.

Dr. Brett writes about the work of Dr. James Pennebaker, which finds that journaling, or talking out loud about their emotional turmoil can have a great effect. Giving ourselves space and permission to communicate what we are dealing with allows us to “tremble out” our trauma, however sever or mild it may be, and begin to move past it. We know this works, because if it did not, there would be no call for therapists. And while no one else might ever read a journal, simply having a place to move the emotions from entirely inside your head to outside is a vital step in being able to see the experience from a different angle, and being able to learn from it.

If we are to be our own coaches sucessfully, we need to develop this ability to see our feelings from multiple angles. Or, maybe more accurately, we need to be able to feel them at the same time we are able to reason about them. We do not want to reason with them. Logic has no positive effect on deep emotion, and often will create resistance instead, the opposite of what we want to do! But we want to be able to see them from a slightly more objective angle, the way a therapist or coach who isn’t us might. And, from that angle, help guide our feelings in a direction from which we can learn from them. Dr. Brett puts it succinctly:

A great place to start is with the perspective that feelings contain information.

Even the seemingly most irrational feelings come from somewhere. It is our role as coach to find that nugget inside the emotional turmoil, but it is not an easy one. A therapist listening to you has an easier time because they are not simultaneously experiencing the feelings they are trying to detangle, they are able to be truly objective. Self-coaching can get close, but it takes time and effort to get there. Journaling is a helpful step. You can write down the feelings as you are feeling them, and come back later with a clearer mind to re-read what you’ve written.

One place I have found the journaling process to be helpful is improving my negative self-talk. As I’ve written about before, I am far harsher with myself than I would ever be with a friend who came to me for help. But by letting myself vent at myself in writing, I have a record of it, so when I come back an hour, or a day later to re-read it, I can realize that I was being harder on myself than I need to be, and even though I’ll probably do the same thing again, each time I internalize the lesson a bit more, and can work with myself to improve the behavior.

Journaling, or talking with a licensed therapist, also keeps us from acting impulsively on our feelings, which can be even more destructive than trying to repress them. Neither extreme does us any good; we need to find the middle ground where we as our own coaches can step in and help with the processing. In order to do this, we need to find a way to bring ourselves into a balanced, calm state.

Dr. Brett talks about using Philip Glass’ music to help enter a calm, trance-like state, in which it was possible to experience the emotions but also see them from a more external view. I am a huge Philip Glass fan, but because I trained as a composer, I have trouble using music in this way. My active listening brain kicks in and moves me into a more active, analytical state than is useful for self-coaching exercises. What I have found works better for me are breathing exercises, similar to what some practitioners of meditation teach. There is a near-endless supply of videos, podcasts, and apps that can teach you breathing techniques for various mental states, but the one I have found to be most helpful for me is Breathwrk, though it appears to be for iOS devices only.

What I like most about it is that it has breathing exercise for a wide range of feelings and goals. Broadly grouped under the headings of “Mind”, “Body”, “Sleep” and “Perform”, each category offers multiple breathing patterns. I like this because instead of one breath pattern for “calm”, you have the choice between “clear mind”, “anxiety ease”, “balance” and more. Being able to dial in on precisely what my goal is means that, even if it is a bit of a psychological trick, I feel more attuned to my goal after completing the exercise. The app also offers time levels for each pattern, so you can begin with just a few times through and move up towards longer periods as you need or want.

As you try using any of these techniques or tools in your own work, I want to leave you with one last thought. As I said above, we as a society do not prioritize making time for immediate processing of feelings and trauma. But we are in a unique time now, and as other societal norms are put aside or modified, I suggest taking stock of what that means for your ability to do just those things. Maybe amidst everything else, social distancing has given us the opportunity to practice our own forms of “trembling out” in private. There are enough sheep and wolves in the world, both in trading and beyond. Maybe we need a few more gazelle.