Stress is a huge topic for traders.

Books, videos, courses, etc. all mention it, though few really dig into the real origins and causes of stress. Just a few of the better books which address this issue I might suggest if you're interested in this are as follows:

• Trading In The Zone: Mark Douglas
• The Hour Between Dog and Wolf: John Coates
• Waking The Tiger: Peter A. Levine

I've spent 50 years teaching martial arts, karate, and self defense, and have a deep appreciation and understanding of stress, its effects, and causes. Fighting, i.e. survival, is a very, very real fear in us.

If we don't really understand this, then our lives become stressful.

But it isn't the fighting itself that causes stress.

It's not knowing, or understanding, why someone would come at you, and all of the things we don't know that could, or might happen to us as a result of that fight.

But these fears that cause us to become stressful over fighting are really at the core of all of our fears. So, stress goes deeper than just a physical fight.

We create stress within ourselves based on our perception of danger that we do not fully understand, and thus have not properly prepared for.

Of note is that to this post, I have a companion video of the same title: FOREX Trading Is Not Stressful Unless You Make It Stressful that puts all of this together from a different view point.

If you've come from watching that video, then press on here. However, if this is your starting point, I might suggest that you read through this before watching the video. Or, if you want, you can skip to the bottom of this post to watch that video now.

Everything. Everything — from the set up to closing the trade — is a potential catalyst for us creating stress over within ourselves if we do not have a specific, and detailed trading plan item for every major contingency.

The importance of having a trading plan is to reduce fear of not knowing what to do in each scenario in the trade process by clearly identifying, and providing a resolution for every major contingency that could be encountered during the trade process.

That seems like it could be a daunting task for the new trader because they don't know enough to know what to look for to resolve.

Well, that's why a lot of pre trading study is necessary, study that covers the mechanics — the plumbing — of trading. That's the first step.

The second step is to work through the mechanics of trading itself in a no risk simulated account funded in an amount equal to what will be invested in the live account that will be created.

That third step, though: trading in a live account, presents the real emotional challenge because it's real money at stake. This is what legendary trader Jesse Livermore had to say about the learning process:

"The only way you get a real education in the market is to invest cash, track your trade, and study your mistakes."

This is where you find out very quickly if you have done the proper pre work: if you become stressful over trading live, then you have not prepared correctly.

What you need to do is to immediately exit the live account, and go back to your study of mechanics, and repeat your work in the simulated account.

Somewhere along the line, you missed something critical that led you to be fearful of that 'real' environment. It should be simple to find that missing step, and fix it.

But you have to know where, and how to look....

The feeling should be one of joy that you worked hard, and deserve the right to now really learn the ropes by trading for real.

This means you are not only willing, but prepared, to follow Livermore's advice to then: "...study your mistakes."

The acceptance of mistakes as learning opportunities is an indication that you're ready "...to invest cash, track your trade, and study your mistakes."

That being the case, there should be no fear, but rather expectation.

There should be no self created stress, but rather excitement of new things to learn.

And finally, there should be no fear of loss, but rather the joy of seeking, and achieving gain.

Yes, that indicates the need for making changes in the way that you think. As to making personal changes, my martial arts Master, S.A. Brock, taught me way back in the mid 1970s that —

"As human beings we have more of a fear of loss than we have a want for gain, and the only way you can change who you are into who you'd like to become is to alter the way that you think because you are a product of the way that you think and thoughts are things."

Make sense? I hope it does, because it's been one of the backbone principles that I have crafted my life around.

The sad fact is that most folks aren't willing to do these simple steps to rid themselves of fears of unknown things that they then become stressful over. So many — too many — that I have awareness of even admit of being afraid.

We're so conditioned to carry on through the fog of our uncertainties that it's far too easy for us to become stressed without even knowing we're stressed. We become stressed, and feel like that's 'normal'....

Being stressed is not only not normal, but it's harmful physiologically for us to be in a state of stress. And we all know that we shouldn't be trading when we're not feeling on top of things.

So, what happens? We don't know that we're stressed, so we don't know that we shouldn't be trading. So, we sit down at the screen, and start trading, and feeling stressed even more each time we have a decision to make.

That is just crazy! And yet we do it over, and over again.

Albert Einstein said: "The definition of insanity is doing the same thing over and over again and expecting different results." Unfortunately, we know that exposure to extended stress has very severe mental consequences in addition to the physical.

And the more mentally jarred we become, the more stressed we get.

It soon becomes a self repeating — and expected — cycle.

Not good. Not good at all — in any way, shape, or form. Not good....

I have to go back to Master Brock's advice: "As human beings we have more of a fear of loss than we have a want for gain, and the only way you can change who you are into who you'd like to become is to alter the way that you think because you are a product of the way that you think and thoughts are things."

How do you: "...alter the way that you think?"

Look, it's just like a diet: you can't just cut your intake by half because you'll still be hungry; the diet will last about as long as you have patience for a growling stomach.

You don't 'diet', but rather alter the way that you eat.

Instead of a big slab of red meat hanging off the plate pushing the vegetables onto the place mat, you reduce the size of the meat portion, and increase the vegetable portions until, over time, you have a wonderfully tasty 4 or 5 ounce portion of well seasoned meat that complements the large portion of vegetables on your plate.

That's why Master Brock carefully chose the word to alter the way that you think instead of to change the way that you think.

Changing the way you think is tough.

Altering the way that you think, however, is a much simpler process.

In the case of trading, for example, you just switch your thought process from worrying about what you don't know to what you do know, and have full confidence that you will execute your trading plan stop regardless of what the indicators on the chart may say.

Not to beat this to death here, but please not the importance of the last part of that which says you will: "...have full confidence that you will execute your trading plan stop regardless of what the indicators on the chart may say."

I can tell you from my own experience that this is the most important rule in trading.

If you knew little else of position management other than to absolutely, positively, without fail get out at your stop, you'd be okay in your trading; probably far better off than 90%, actually. Just taking that stop....

There's a marvelous scene in the movie, Crimson Tide where Captain Ramsey played by Gene Hackman addresses Denzel Washington's character Mr. Hunter with exactly the importance of following the rules:

"Mr Hunter, we have rules that are not open to interpretation, personal intuition, gut feelings, hairs on the back of your neck, little devils or angels sitting on your shoulder. We're all very well aware of what our orders are and what those orders mean. They come down from our Commander in Chief. They contain no ambiguity.""

If there is any — as in any question that you are unwilling or unable to execute that stop, then you're just screwed.

And not to get toooo carried away with movie quotes, but this one gives a clear indication of what will happen to you if you don't hit your stop. It's from Braveheart where Stephen, played by David O'Hara, says to William Wallace, played by Mel Gibson:

"The Lord tells me he can get me out of this mess, but he's pretty sure you're fucked.""

Can you say it out loud for me—

I

WILL

hit

my

Stop

EVERY

time!

Video: FOREX Trading Is Not Stressful Unless You Make It Stressful