Hey it’s Sasha Evdakov and in this video I want to share with you How to Eliminate Stress When it Comes to Trading Stocks or trading in your account. In either case how do you eliminate that Stress caused by when you’re trading in the stock market?
Well a lot of times people take on this stress because they don't understand their psychology or their psychological state that they’re in. Now seeing psychology when you see things visually and with diagrams allows you to really hone in and kind of be aware and see yourself from an outside perspective and then you can make adjustments.
It becomes a little bit more of a complicated subject if you start talking about it in those literature books or the study guide things as you get deeper and deeper and deeper into studying psychology.
Now I’ve studied psychology and I'm just going to show you a simplified diagram version of it so that way maybe you can start understanding what's going on and what's happening.
Looking at this diagram this is called the Flow channel and I got this from a book called Flow: The Psychology of Optimal Experience.
Now if you take a look at this diagram you can see that we have skill on one axis or one area then we have challenge on the other and when you look at this diagram you can see that in the center when things are balanced between your skill, your skill level let's say your skill level in playing tennis or your skill level in the markets and balanced with the challenge meaning the players that you're playing on the tennis court or the amount of shares that you’re trading or the amount of capital that you're using.
When things are balance or when everything's in alignment you tend to have a good tennis match or you tend to be a good trader. If everything's flowing right then you're doing pretty well. On the flip side if you have a really hard challenge like if the thing that's in front of you is really tough.
Say you're playing Andre Agassi or another famous tennis player but your skill level is kind of weak or it's very minimal then you're going to have anxiety you going to have that nerve-wracking stress feel because your challenge is really high.
Think of this when it comes to trading if you’re trying to trade 50,000 shares or a million dollars on one stock and you've only been training for a month you know you're going to have anxiety and that's not the way to go you're far away from the flow channel.
Now on the flip side on the other side of the scale if you have a very high skill level let's say you are Andre Agassi or let's say you are a professional football or basketball player LeBron James or whoever you are and the challenge that you have is your trading with 2+ shares or two contracts then all of a sudden you're going to be bored because your skill level does not match up to the challenge.
You’re going to be day dreaming and thinking about other things and boredom is created so you need to pair up your skill with your challenge to be in this Flow Channel.
I think by looking at this diagram you really get to see a great visual perspective of how your psychological state works and how it applies to trading.
For example if you’re trading with anxiety and you’re trading your nervous and you’re unsure of what's going on or what's happening, then you’re probably trading with too many shares or too many contracts so you need to reduce the amount of shares that you’re trading.
That means that your challenges is really high for your skill set, the other thing that you can do is build up your skill set and that way it matches your skills to your challenge and then you can be in that flow channel and when you're in that flow channel everything works in harmony.
Have you ever worked and done things where you’re just in the flow whether it's bowling you get strike after strike sometimes you get into these rhythms and patterns where you’re just in the flow and everything seems to work out.
Now if you're bored when your trading that means your skill set is probably higher but you’re only training one or two shares it’s not very effective you’re going to be bored outta your mind you're not really going to be in the flow again. So you need to find that harmonious balance, you need to find things that work for you so that way you're in the flow.
If you're not in the flow you'll be in this external state or outside of this state having the anxiety the boredom having the nerve wracking feelings and it's going to make you a poor trader or make horrible trading decisions at least when you're in those lower states when you're in those emotional state while you're trading.
I hope that diagram was helpful. I hope you learned a lot about your psychology state, just use it as a tool or reference and apply it to yourself and see what state you're in, when you start becoming a little nervous, when you start becoming a little bit more anxious, when you start becoming a little more bored then think of this diagram and see how it applies because it applies not just to stock trading but also in life.
Thanks for watching and if you enjoyed this video and you want to take your training to that next level check out some of my courses at Tradersfly.com.
Thanks again and remember to do what you love, contribute to others, most importantly life abundantly.
I'll see you next time.