Thread by @flaneur_a

Three factors cause #stress most of the time:

1) Novelty - When we deal with new, unfamiliar stuff like new place, new skill etc, we get stress. This is good because the minor stress causes us to stay alert sharpening our attention.
Next 2 are more relevant for a trader/investor

2) Uncertainty - An investor deals with uncertainty all the time. It's a multi variate field and meteors keep falling from outer space. It's uncertainty, more than the actual break out of bad news that's stressful most of the time.

3) Lack of control - Notice the stress you have when you are a pillion rider on a bike, or a parachute. Or, when you think you own a potential multi-bagger stock, and it keeps falling. Or, when you have to catch a flight and you're suck in a traffic

Now, the thing about stress is that exposure to stress for a short while is good. It enhances our alertness, in a state of preparedness...like a slip fielder in Cricket.

However, prolonged and persistent exposure to stress (like troubled marriage, rude boss, day trading, night shifts, holding on to losing stocks and watching them tumble) is a slow poison. This can play havoc on the cardio vascular system and immune system.

Our Stress Management system was designed to tackle quick physical stresses, like an encounter with a predator 20,000 years back. It, however, fails to distinguish quick physical stresses from prolonged emotional and psychological stress.

It is almost impossible to get away with stress in such situations. One can try two things, however:
a) Minimise the exposure to cues, which generate stress. Stop watching CNBC, staring at price ticker. Walk out of troubled marriage, find a profession that you enjoy.

b) Learn to recognise patterns/situations which induce stress triggers. And train to stay calm under impending stress attacks. Like altercation with spouse, watching Monetary Policy, larger than usual position sizes, you driver driving too fast.

(8/8)