Our Universal Emotions and its Cycle

Are these emotions familiar to you – Happy, Shock, Afraid, Angry, Sad or Disdain?  Have you felt any of these 6 today? How many times have you felt at least one of the 6 today?

If you do, then you are officially HUMAN!

Scientists tell us that if we breathe, live and hence have feelings, then they could break all of our emotions down to just 6 that are universal. One that are felt by all; no matter, color, culture, education, country, race, language, wealth etc. felt at any one time or another.

Can you picture these 6 emotions that you can’t run away from?

The 6 faces below can help. It gives you a picture of these 6 emotions that are universally felt. One that you have seen in those close to you, those you don’t know and that of your own in the mirror or photos.

universal emotions

(the last face you see on the left bottom corner is that of Paul Ekman, the psychologist behind the study of these faces)

Do you think these emotions are confined to daily living and relationships?

There is more.

Beyond feeling them, there are cycle of emotions we go through.

Below is one where an event shocks us so much that we go into a cycle of denial and then despair. Perhaps anger, disdain, afraid all thrown in the ring. We bargain with the situation and perhaps even with a higher power, “Why me?” “Why am I in this situation?” We sink into depression. Below is a model by Kubler-Ross. A cycle of denial, before recovery arrives.

cycle of emotions

There are two issues here:

1. Do we think this Cycle of Emotions is confined to love and life? Or does it happen to us as well when we trade or think we are investing (for the long term) or are taking risks with our money?

2. Are we able to get out of this cycle of denial and depression?

Firstly, the answer to Q1.

See diagram below.

cycle of emotions price chart 2

Doesn’t the blue price chart above look just like the chart of the Cycle of Emotions diagram (on the top right) depicted by psychologists?

It belonged to a currency pair during the second week of July, when the Greek Drama was slowly unfolding and as it took different turns and twists. However, it could have easily been that of any other underlying investments.

Money, trading and even if you think you are investing for the long term and are not greedy and are merely looking for some reasonable returns from your money; the reality is, you are swept into the cycle; whether you like it or not, want to or not. You are in; just because you are human, with emotions and money (to be made and spent).

So, the answer to Q2 then becomes so important to us all, doesn’t it? Not just as traders, but as humans who can’t escape from feeling emotions and the circle of money.

What do we do?

What we will do during the period in the green circle in the diagram above is the key. We know we can’t remain there, yet not know how to get out of it…

I very much want to get you out of the depth of this cycle of emotions and move with you up the curve to acceptance and recovery, right here, right now. But I would like you to think about your own cycle of emotions for a couple of days and I shall see you on Monday night Sydney time (9pm)  to explain to you at a webinar what we shall do.

20th July Monday 9pm Sydney. Register below. See you there.

http://www.fxstreet.com/webinars/sessions/the-neuroscience-of-wiring-our-brain-for-a-comeback-from-losses-20150720/

Wai-Yee

Dealing with Fear Memory in Trading

One common problem faced by traders is: not pulling the trigger (into trades or out of – to take profit or losses).

One reason for this is the fear of losses and the memory of pain of past losses.

Neuroscientists suggest to deal with Fear Memories by focusing on the “context” instead of the emotion of the memory. This takes us out of automatic responses or reactions to the overwrite of logic brain. We can then rationally look at the trades, balancing risks with rewards and gives us the chance to consider various methods of managing risks, instead of avoidance.

http://www.spring.org.uk/2014/04/a-better-way-to-cope-with-persistent-bad-memories.php 

Fear memories are saved in our memory bank (hippocampus) which get retrieved when faced with seemingly similar situation – a trade opportunity. Using these fear memories as a trigger for putting in place risk management strategies before the trade turn these memories into positive triggers.

  

Train your neural pathways (habits) before the war to serve during war

 

 William James expounds on neuroplasticity and formation of habits in his book “Habit”.

He offers three maxims for the successful formation of new habits:

  1. The acquisition of a new habit, or the leaving off of an old one, we must take care to launch ourselves with as strong and decided an initiative as possible. Accumulate all the possible circumstances which shall reenforce the right motives; put yourself assiduously in conditions that encourage the new way; make engagements incompatible with the old; take a public pledge, if the case allows; in short, envelop your resolution with every aid you know. This will give your new beginning such a momentum that the temptation to break down will not occur as soon as it otherwise might; and every day during which a breakdown is postponed adds to the chances of its not occurring at all.
  2. Never suffer an exception to occur till the new habit is securely rooted in your life. Each lapse is like the letting fall of a ball of string which one is carefully winding up; a single slip undoes more than a great many turns will wind again. Continuity of training is the great means of making the nervous system act infallibly right … It is surprising how soon a desire will die of inanition if it be never fed.
  3. Seize the Very first possible opportunity to act on every resolution you make, and on every emotional prompting you may experience in the direction of the habits you
    aspire to gain. It is not in the moment of their forming, but in the moment of their producing motor effects, that resolves and aspirations communicate the new ‘set’ to
    the brain.

http://www.brainpickings.org/index.php/2012/09/25/william-james-on-habit/

Why are we more emotional when stressed …

Or can’t seem to think straight?

It’s because when we are in highly stressful situations, the flooding of stress hormones in our brain causes brain freeze.

Stress hormone, Norepinephrine is a neurotransmitter that is secreted in response to stress.  

You know they are present when you feel the following:

A high level of norepinephrine flooding particularly the Anterior Cingulate Cortex – causes indecision, lost of strategy – freezing of our the logical brain. When this happens, it allows emotions the opportunity to run rampant and take control.

Be vigilant of emotions when stress is high! 

http://www.scientificamerican.com/article/when-you-get-stuck-guessing-relieve-stress/

Are your habits serving you? Let neuroplasticity help.

 Neuroplasticity – is based on Donald Hebb’s theory that “neurons that fire together wire together”. 

We are big on habits because that’s how the brain works – its default mode is to cut down on the time we need to think before acting, more efficient use of the brain.

Problem is, some of these habits are unproductive.

If unexamined, these habits keep on operating and become our default reactions (unconsciously).  As Hebb says, the more they are practised, the more these neurons have the chance to fire together and become more hardwired as pairs – stimuli x causes neuron A to fire with neuron B resulting in emotion y. Emotion y is not how we want to react. What do we do?

Habits are hard to break. The more they are hardwired, the harder they are to be redirected.

If Hebb Theory is true, then the reverse of it must be true too. Therein lies the key to breaking habits. The less we act on a habit (consciously) the less they fire together,  the less “walked on” the neural pathway becomes. See faded out neural pathways on the left of diagram. As we train a new habit, the more we practise and walk the same pathway, the more the new habits will be formed, as depicted on the right of the diagram.

If we were to stop for a moment to consider now, we will realise that there are many habitual activities and reactions (especially the unconscious ones) that we have relied on and defaulted to, like the many neural pathways that have formed in our lives (see middle of diagram).  

However, to remain sharp in our thinking and relevant in our reactions, we need to be aware of our habits. It’s time to prune those unproductive ones.

Train (and prune) your neutral pathways before the war to serve during the war. 

Define your own “war”.

 

Learning to See Data 

New York Times

“It’s about frameworks of recognition; how you choose to look, rather than what you’re trying to see. “

How do we make sense of a large amount of data – quickly?

How do we decipher news and constantly changing updates of information – sensibly?

It’s not about using algo or more powerful computer, it’s about – training our perceptive brain, virtual thinking, learning to read large amount of data instinctually.

Doctors are trained to do so as well. 

 

@waiyeechen