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Addressing Past Trauma in Trading & Why It Matters

Updated: Aug 23, 2023

Trading, like life itself, is profoundly influenced by our past experiences.


Past traumas, whether connected to trading or not, can deeply affect our decision-making in the trading world.


Interestingly, the power to overcome these traumas lies in the present, where we confront our reactions and reshape our responses.


Consider the scenario where you've encountered a distressing event in the past—maybe a financial setback or personal loss.


Can we go back and change that past event?


Unfortunately, time travel isn't within our grasp. However, what's important to grasp is that trauma doesn't exist in the past; it surfaces in the present.


It's the emotions, thoughts, and sensations that emerge when we're confronted with triggers in the here and now.


What Is Trauma? And what do we experience it?


Trauma is experienced in 3 ways.

  1. Thoughts

  2. Emotions

  3. Bodily Sensations


Thoughts:

These can come in the form of vivid images, and self-defeating thoughts


Emotions:

Emotions like anxiety, fear, and panic surge forth


Bodily Sensations:

The category of bodily sensations: Shaking, Twitching etc


(Sidenote- Try my own personal Emotional Trade Tracker If you want a way to be able to track these effortlessly)





An Example Of Past Trauma


Now, let's incorporate a broader perspective. Imagine experiencing trauma unrelated to trading—perhaps an incident of bullying in school.


Let's say in the past the trauma was developed by you being bullied in school, very harshly.

Every Time you stood up in front of the class, they made fun of you in a crazy way about you and you were sweating and it was so traumatic.


Now as a grown-up the little child that was traumatized, that was bullied is still in you, and every time you have to do a presentation at work or if you want to be a public speaker there’s anxiety coming up, there’s sweat coming up, there’s thoughts of not being good enough.


Trauma again is not this mystical unexplainable thing.


It’s literally only made up in the present moment of 3 things

Thought, emotions, and bodily sensations.

And the brain, your best friend brings trauma up as a defense mechanism to show you hey we are in a similar situation again, ‘Danger, danger.’

Now what you must understand is your brain takes orders from YOU.

It’s not that YOU that take orders from the trauma. (Most fall into this trap)

You don’t take it from the brain, it takes orders from YOU and it looks at what orders you give by your reaction to IT.





How This Comes Up In Trading


Fast forward to your trading journey as an adult. That child who was bullied still resides within you.


As you engage in trading, you might find that similar feelings of inadequacy and tension resurface, especially during high-pressure trading situations.


This experience underscores that trauma isn't an enigmatic force.


It emerges in the present through the same triad of components—thoughts, emotions, and bodily sensations.


The intriguing part is that your brain doesn't hold dominion over you; it's your decisions that dictate its reactions.


''It's you, not your brain, that sets the course.''


Many fall into the trap of letting trauma govern their actions, but in reality, it's your actions that shape your brain's responses.


Here’s the funny part that almost no one understands.


Letting Go Of Trauma Is About 2 Things


  1. Activity

  2. Inactivity

You want to make trauma inactive by showing the brain it’s not relevant anymore the way to do that is to understand the language of the brain.

Which is behaviour…

It’s behaviour inside your head and outside of your head.

Now the trigger for the trauma can come inside or outside your head through an experience or maybe there’s a thought coming in and you are reacting.

The way the brain gets you to react is with uncomfortable feelings, thoughts, and sensations.


That’s why it’s so challenging for people to let go of the trauma because they're trying to fix those feelings.

That’s why you can never grow with self-help unless you practice:

‘’Being okay with uncomfortable emotions, thoughts, and sensations’’

Now if you spend time and energy on it to try to fix it, repair it, or try to make it feel better.


You are telling the brain that trauma is still relevant

You're showing your brain that with your focus and your time spent.



The Key Is Valued Actions

Now what you want to do is to show your brain that it’s not relevant anymore by being okay with the uncomfortable feelings and focusing mindfully on valued actions.

You are shifting from being reactive to the trauma to being proactively acting on valued actions mindfully.



By trying to ‘fix’ it you are saying to your brain that it’s still relevant, you have to show your brain by being okay with the uncomfortable feelings and focusing mindfully on value actions

You are shifting from being reactive to the trauma to being proactively acting on valued actions mindfully.

''Mindfully is key, because even if you're acting on valued actions but still spending time in your head on the trauma, you’re still feeding the trauma.''

That’s why you want to bring your focus only in the present moment on the actions.

This doesn’t mean that your brain stops immediately to give you trauma responses because it’s like


‘’What are you doing?’’

‘’You're neglecting this dangerous thing.’’

‘’Let me give you more uncomfortable thoughts and emotions.’’

This is why letting go of trauma is a practice and by taking back that power, taking back that time, taking back that territory over time you’re becoming more emotionally fit


Because you’re being a space for those emotions and you build more mental focus because you're directing your focus proactively on the valued actions.

Your behavior by acting on valued actions and not on the trauma responses shows the little child in you over time that you are safe


Because why would you be safe if you're constantly trying to protect yourself from danger?


''Investing energy in fixing or repairing trauma inadvertently signals to your brain that the trauma still exerts control.''

To summarize addressing past trauma in trading encompasses acknowledging that trauma is a current phenomenon.


It entails mindfully embracing triggered thoughts, emotions, and sensations tied to past experiences.


By proactively prioritizing valued actions and embracing discomfort, you're gradually breaking the hold of trauma on your trading choices.


Moreover, it's crucial to recognize that past traumas unrelated to trading can cast a long shadow on your trading decisions.


A traumatic experience from your personal history might unknowingly influence your actions in the trading world.


This interplay between past traumas and trading decisions is a testament to the intricate tapestry of human psychology.


Conclusion


Engaging in these valued actions mindfully is the key to breaking free from those patterns.


Plan proactively, set a schedule, and commit to these actions you've set, even when old patterns re-emerge.


As you cultivate mindfulness and keep your focus on the present moment, you're actively dismantling the influence of past trauma on your trading decisions.


While the journey might be challenging, it will ultimately lead to a more empowered and emotionally robust trading mindset.


Let me know what your thoughts are and comment below!


Thank you for reading and have an incredible day!


Alan Edward

THE DIVERGENT TRADER


 

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