Sunday, June 8, 2008

Stess Affecting Our Ability to Learn and Think

From the book "Brain Rules" by John Medina, Chapter 8: STRESS.

"The Centers for Disease Control and Prevention asserts that a full 80 percent of our medical expenditures are now stress-related."

Constant exposure to stressful situations creates an abundance of stress hormones, primarily cortisol. If our bodies are constantly bombarded by this hormone, it can reduce the effectiveness of our immune system, and decrease our ability to learn and think.

"The perfect storm of occupational stress appears to be a combination of two malignant facts:
  1. a great deal is expected of you, and
  2. you have no control over whether you will perform well.

On the positive side, restoration of control can return groups to productivity."

In trading, it is true that we have no control over the markets, but we do have control of our position management. We can not force the market to go up or down, but we can decide when to liquidate a position. No one forces us to hold onto a losing position. We are free to push the button to liquidate a position at any time, as long as the markets are open.

However, if we are under constant stress, we may not be able to think clearly, or learn new markets patterns and relationships as market dynamics change.

To function properly, we must learn to control stress. Eliminating the causes of our stress, and meditation techniques help by reducing the production of stress hormones. Exercise also helps by producing something called the Brain Derived Neurotrophic Factor (BDNF), which acts by chemically neutralizing cortisol, and stimulating new neuron growth and new connections between neurons in the brain, which is essential in learning.

John Medina is an interesting speaker. Some of his lectures can be found on YouTube.

Charles

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