 Welcome back to the Trade Hacker Mindset. In this episode, we're gonna talk about why trading stress is not necessarily a bad thing. Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker Mindset. All right, so let's jump into our discussion of why trading stress is not a bad thing. And this really comes from, this topic comes from my interaction with traders over the last 20 years. And what I find is that a lot of struggling traders or a lot of new traders or someone who has not really reached the level of success that they want in trading, the conversation goes something like this. You know, if I could reduce the amount of stress that I have while I trade, then my trading would go a lot better. Or if I could eliminate the stress that I have when I'm trading, then I would be much more successful and much more profitable. But let me ask you this, do you think that's true? Because think about this. The fact that we are traders and the fact that we have daily encounters with risk and uncertainty, don't you think that having stress is part of the equation? Because I wanna give you an example of how stress can be a good thing. People typically, when they think of stress, they always think of stress as a bad thing. But I wanna clarify the difference between two different things. One is stress and the other is distress. Because if you can learn to manage your stress, if you can learn how to make your stress work for you in your favor, then stress during trading actually becomes a good thing. And if you ever think that you're going to get to a point where you are going to eliminate risk, then you're absolutely wrong. And in fact, if that's your ultimate goal, then trading may not be for you. And so let's get back to this stress versus distress because stress can be a good thing. Distress is not a good thing. So let's talk about first how stress can help you in your actual performance. I wanna give you an example that's not trading related and then we'll tie it back to trading. So I live in the Midwest, I'm in Kansas City. And in Kansas City, we sometimes get snow, but a lot of times the worst weather, especially for driving is we have these ice storms where it starts to rain and then it freezes and creates this layer of ice on the trees, on the roads, on your houses, on everything. Everything's just kind of a sheet of ice. So about 10 years ago, I was driving back from Indianapolis. A group of us went to a Kansas City chiefs game in Indianapolis and we were driving home. Now this is an eight hour drive. And so as you can imagine, once you're driving for a little bit, you start to feel a bit bored, right? But then all of a sudden it started raining and it started raining a little bit and then it started raining a little bit more and then it started coming down in sheets. I mean, it was coming down pretty hard and then the temperature dropped and all of a sudden this rain now turned into sleet. Okay, this was about 10 years ago or maybe more, but I can still visually see this. I mean, it was that impactful that I still remember it like it was yesterday, now 10 years later. My visibility started getting reduced. I can start to feel the road become slippery under my tires. And before I knew it, I would have to loosen my grip on the steering wheel because I would look over and you get the whole white knuckle thing where you're gripping something so hard that your knuckles are turning white and I had to kind of relax and readjust and get back into a normal state of mind. I had to reduce my speed and what was boredom before where we're just kind of cruising along and things were a little bit boring. Now my boredom had quickly turned into a high alert situation. Okay, I'm no longer operating on autopilot. My auto, whatever you call it, the auto speed thing. I'm definitely off of that. Like I've got my foot in control of the brake and the gas at this point. So in this situation, this would be considered a psychological stress. This is a heightened physical and cognitive state and this prepares us for dealing with challenges in life. As humans, we have this flight or fight response because it basically it mobilizes our mind, it mobilizes our body to avoid challenging situations or face them head on. So as I'm gripping the steering wheel and I have this muscle tension, I have this alertness and it's kind of like a flow of adrenaline into your bloodstream, right? So those are a few of the physical attributes that you can actually feel as you enter into a state of stress. If I just kept my cruise control on, I may not have slowed down my speed. I may not have taken measures that I needed to to avoid an accident or slide off the road. This new state of stress has actually mobilized my energy and it shifted me from being bored to being able to cope with the immediate situation. Now, if somebody told me, you know what, you really need to minimize or try to eliminate your stress in this situation, I would have laughed at them because if I'm in a situation like this where I need to be alert, where I need to have this stress to take care of the situation, then that's what it should be. I should be in a state of stress. I should not be in a state of boredom or relaxation. Now, like I said, you know, these kind of ice storms, they happen in the Midwest. I mean, these are not abnormal. I've driven in them many times. Now, this example, driving from Indianapolis to Kansas City, that was a pretty severe example, but I've driven when it's sleeting and icing and snowing many times. So that's not something that's only happened to me once in my entire life. But think about this. What if you have someone who's from Florida, who's rarely ever seen snow or they're from the southern tip of Texas and they've barely even seen ice or snow while they're driving? How do you think they would adapt to this situation differently than I did? They would probably feel a little bit more threatened, right? I mean, I know how to handle it. I know how to stay safe in those situations, but somebody who's never experienced it, their stress might actually become distress. I mean, you hear these stories about when it just starts to rain a little bit in California, all of a sudden, you have these big pile ups on the highways because people aren't used to driving in those conditions and they kind of freak out and don't know how to handle things. No offense if you're from California. So this simple example of drying in icy conditions, it kind of illustrates that your perception and experience can make the difference between stress and distress. All right, so how does this relate to trading? Well, when you put your money at risk, when you put your capital at risk, you're like the driver on the icy road. You will be alert. You'll be processing information in real time to make quick decisions and decisive decisions and you're sometimes going to need to make course corrections if needed in real time. And so if you view losing as part of the natural part of trading or if you've experienced comebacks from drawdowns and bounced back out of losses and you have specific rules and mechanisms in place to limit your losses, then that stress of trading is unlikely to become distress. A losing trade to me is kind of just like a little annoyance. You know, when you're sitting at a park and a nice day, having a picnic and you get that little fly or that little nap that keeps buzzing around and you gotta kind of wave it off. It's kind of a little annoyance. That's what a losing trade is to me. If a losing trade to you creates this massive situation of distress, then that's a problem. And that distress comes because you probably don't have position size limits. You probably don't have loss limits of levels that you need to get out or you don't have daily loss levels or you don't have ways to manage the risk around your trading. Because if you don't have those parameters in place, if you don't have that stress that's needed to manage those situations, those become distress and then you don't have an ability to focus and make those rapid course corrections that you need to and you become impaired just like the driver on the icy road from Florida who's never experienced it before. You see, when you have position size rules, when you have a trading plan, when you journal your trades, when you document, when you have stop loss levels based on your position, those are kind of like snow tires on your vehicle, okay? They may not seem to do a lot for you when things are going perfect, but they definitely help you deal with adverse conditions. If you're a nervous and you're a panicky driver in the snow or ice and you don't feel that you can even control your car, an experienced winter driver like myself knows that I can control it. And the same with trading. If you're a panicky or a nervous or fearful trader and you're unable to control your losses, the experienced trader knows that losses can always be limited. So your challenge as a trader is to embrace stress and always ensure that it does not become distress. One of the things, and I've talked about this on several podcasts in the past, is one way to do that is before you start your trading day, you should be writing down what your trading plan is for that day. What is your position size guidelines? What is your per trade loss limit? What is your per trade price targets? What's your daily loss limit? And how are you feeling? How did you sleep last night? Is there anything outside of your trading business that is gonna cause distraction? Or is there anything in your family life that is creating additional stress that could turn into distress in your trading? How is your financial situation? Is there some kind of financial stress that is putting additional stress or distress on you while you're trading? If you become self-aware of this, if you document this, if you write it down, it's gonna make you become more and more self-aware and help you manage that risk and not allow it to turn into the distress that we don't want. You see, if you are prepared for adversity, you're going to respond with normal stress and not distress. Trading will always be stressful because we're always putting capital at risk. We are always dealing with uncertainty, but managing stress and using it in your benefit is a good thing. Remember, the idea around the trade hacker mindset is to maintain this mindset that keeps you confident, keeps your motivation high, and under those conditions, you'll work harder, you'll learn more, you'll grow your trading account over time. So it doesn't mean eliminating stress, it means creating this wall between stress and distress. Risk management, position size is one of the best psychological walls that you can put up between these two things. So I hope that was helpful. If you wanna be part of our trade hacker community, just go to community.navigationtrading.com. We've got hundreds of traders interacting on a daily basis, not only about the mindset stuff, but also sharing trade ideas with the sole purpose of helping each other become better traders. Just go to community.navigationtrading.com. I'll see you on the inside or I'll see you in the next episode.