Managing What You Can’t Control

Emotions…they are part of the essentials of what make you human; as essential as the importance of opposable thumbs; for without emotions, as with your thumbs, you would not have the same quality and flexibility of responses. Now, what is interesting is that some traders labor under the false belief that they must stamp out, eradicate or otherwise do away with their emotions in the trade. Well, you actually cannot divorce yourself from your emotions; that is, not completely. It is true that through specific training you could become dispassionate to a degree.

Systematic Desensitization
One type of training that helps you to distance yourself from emotions is called “systematic desensitization.” Systematic desensitization was developed as a therapeutic tool to address phobias. Phobias are intense fears that may be rational or irrational, but which negatively impact upon the sufferer’s life tremendously. This intervention introduces the thing or situation that the person is in terror about in stages, little doses over time. Additionally, they are taught relaxation techniques to use in the face of these little doses of the fears and anxieties with the objective over time to become desensitized and relaxed in the face of the original fearful situation or thing.

Think of it in this way…when you learned to drive, you were probably very nervous, anxious and fearful of not only making a mistake, but also of having an accident – especially on your first few times on the freeway. However, with time and training (practice), you systematically became desensitized to the fact that you were driving a multi-ton, very fast, projectile among many other very fast projectiles, which could at any moment become lethal. This desensitization did not happen overnight. You had to put in your “time” and create consistency with your driving in order to develop capacity for driving competence. The more competent you became at driving, the more confident you became; and the more confident you were, then the more relaxed, focused and in control you felt – at least for most of you. Some of you…and you know who you are… quickly became reckless as soon as the fear subsided; you became addicted to the rush of driving fast and were impulsive, too. Your “confidence” was not based on “competence” but hubris. This type of behavior, no doubt, has cost you a rash of tickets and more than likely an accident or two. These are results…I’m going to go out on a limb here and assume…you didn’t want.

Emotions Are Always Active
Most of you, on the other hand, have become very comfortable with your driving abilities and although you are desensitized to the driving process, are able to contain your infrequent compulsion to exceed the speed limit. Now, I said earlier that emotions are an inextricable part of being human. To illustrate that emotions are always active even when they are out of your awareness, as you drive just press your foot on the accelerator and as the speed of the car increases, you will begin to experience an increase in your emotional response in direct proportion to the gas pedal pressure. As the risk mounts, so does your emotional response. Your trading is in many ways analogous to driving. Some of you have not been trading very long, so you have not logged months and years in your trader training to develop systematic desensitization of your trading process. As soon as you enter the trade, you immediately feel the anxiety associated with risk. However, as you identify trading Protocols (strategies, setups, and procedures) that are supported by Effective Routines (where you are doing the same thing over and over) filtered through a Feedback Loop (documenting data in order to verify the veracity of the protocol and modify where appropriate) and Habituating (making a habit of the entire process), you will Skill Build and systematically desensitize yourself to the inevitable emotional upheavals in the trade.

Harness Your Emotions
So, the short answer to the question; can emotions be taken out of the trading equation … is no. But, the more important question is not how do you eliminate emotions, but how do you harness them. There are myriad powerful positive emotions that can be used to sharpen focus, access and activate internal resources, reduce distortion and diminish distraction; emotions like passion, safety, peace, calm, and confidence, for example. In fact, when your emotions are engaged in a positive fashion, your thinking is not only less hampered by cognitive noise, internal conflict and confusion, but you are more likely to remain in the moment, for the moment, fully available, fully present and in the now of the trade. In this mental state, while resonating with what matters most, you can identify price patterns more easily, track trends, correlate time frames and, generally speaking, be more aligned in body, mind and emotions all going in the same direction and focused on the same goals. When you are harnessing emotions to be in the service of getting the results you want, you are effectively “managing” your emotions.

Emotions are energy. They are represented by feelings and can be tracked using brain imaging technology to illustrate how the brain “looks” when it is lit up by emotions. One way to demonstrate this is by considering the sun. The sun is all energy and without it, the planet would be just another piece of space debris. The sun is both life affirming and life destroying. It is both necessary for your life and it can and will kill you under certain circumstances. The sun cannot be controlled with our current technologies…but its energy can be managed. The point here is that it is arguable that emotions cannot be controlled, which is why they cannot be extinguished totally from the trading equation; however, they can be managed. It is more important to approach the concept of emotions as an extremely important and useful resource that is in your system. Learning how to harness and manage emotions will serve you greatly in your quest to create consistently successful results.

The Pre-requisite to Managing is Awareness
It is critical to your trading to manage your emotions, but you cannot manage something that you are not aware of. There are many tools and techniques to help you manage your emotions, and those tools are useless if you are responding to thoughts, limiting beliefs and emotions that are below your mental waterline. Thoughts give rise to emotions and emotions drive behavior; all of which can be out of your awareness. Your awareness is like an iceberg. An iceberg, no matter how large, only has its tip showing above the water line. The overwhelming majority of an iceberg’s mass is under water. It is the same with your awareness. Humans are motivated to action (positive or negative) much more by out-of-awareness data than what is in their awareness. This out-of-awareness part of the human system is called the sub-conscious or unconsciousness. How often have you found yourself doing things that you have said you don’t want to do; or not doing things that you have sworn to yourself that you would do? And, of course, how often have you asked yourself “why” you seem so out-of-control.

Thought Drives Behavior
You must remember that all behavior has its origin in your thoughts, but if you don’t know what those thoughts are, you can’t begin to change your behavior. One way to begin to uncover your unconscious thoughts and emotions is through documenting what you are thinking and feeling every time you have either found yourself doing something that you don’t want to continue, or not following through with a commitment. You’ve got to uncover the data. You’d be surprised how much you can begin to change when you start to uncover the thinking that has gone into behavior that you don’t want. After you have identified the faulty thinking that is giving rise to uncomfortable emotions which drive the bad behavior, you can then use affirmations to start changing the errant thinking one issue at a time. Affirmations are totally positive statements which are written in the present tense and in the first person as in “I” if you are talking to yourself out loud or the third person as in “you” if you are recording the affirmation. Affirmations are a powerful way to initiate the coach within and support your highest and best trading efforts…your “A” Game. How to achieve this is discussed in my book, the details of which can be found in the author profile.

Dr Woody Johnson can be contacted on this link: Dr Woody Johnson

Dr. M. Woodruff Johnson (known as "Woody") is the author of "From Pain to Profit: Secrets of the Peak Performance Trader". He has actively and successfully traded stock options, forex and futures for around 10 years. He was a former Executive Director of the Kaiser Permanente, Watts Counseling and Learning Center and holds certificates in Accelerated Learning, Neurosensory Development and hypnotherapy as well as others. He is dedicated to helping others achieve their goals and get the results in trading and life that they desire.

Dr. M. Woodruff Johnson (known as "Woody") is the author of "From Pain to Profit: Secrets of the Peak Performance Trader". He has actively and success...


Junior member
That was an interesting read. Good way to look at it. As with everything experience and positive result build confidence which can overcome fear, doesn't need to extinguish it fully, just enough that your able to act in its face. Such a fascinating topic as everyones emotionally charged differently so the variables and outcomes make it impossible to teach.... almost something you need to see and understand for yourself