Use Emotional Intelligence to Win in the Stock Market

USE EMOTIONAL INTELLIGENCE TO WIN IN THE STOCK MARKET

Emotional Intelligence helps you play the stock market and win.

From Business Day -- "Street Dogs: The winning traits of market wizards" -- to read the whole article go here: Business Day - News Worth Knowing

Fenton-O’Creevy, who studied 118 professional traders for several European investment banks, found that successful traders tend to be emotionally stable introverts who are open to new experiences.

Trading coach Brett Steenbarger says his study of 64 traders demonstrates ... “one important lesson: success in trading is related to the ability to stay consistent and plan-driven."

Consultants at Market Psychology Consulting, a US firm that coaches market traders, found that the following characteristics produce superior results:

n Low emotional reactivity: Emotional stability is considered crucial, especially during periods of market turbulence. In one study [they] measured traders’ heart rate, blood pressure, and skin conductance while trading and found that more experienced traders had less physiological reactivity to information surprises.

n Low illusion of control and a belief in the occurrence of chance events.

n Low overconfidence: Referring to a misappraisal of one’s foresight, talent, and abilities as being better than they really are.

n High Self-discipline: As it relates to how we manage our impulses. Self-disciplined people are better able to control and channel their impulses towards goals.

n Self-awareness: In the sense of an enhanced consciousness of one’s own physical and emotional state. Additionally, self-aware individuals often have logical reasoning behind their choices and behaviour. Self-awareness is also one of the key traits of individuals who have high emotional intelligence.

If you would like to increase your self-awareness and emotional intelligence, and WIN, email me for coaching, sdunn@susandunn.cc. Take THE EQ COURSE for better emotional intelligence, stability and self-awareness.

The US Economy

What can I say?

The stock market events of this week are a titre of emotional intelligence.

Heard around town:

1. Better get all your money out of banks and the stock market and put it in a safe in your house.
2. Money won't be any good. Buy gold.
3. Put you money in bonds.
4. The market will rebound. It always does.
5. I weathered Black Friday... 9/11 .... This happens.
6. We're all scared. Nobody's buying anything.
7. If this were any country but the US, we might have woken up this morning with our dollar worth 25 cents.
8. Let's change the subject. I don't want to talk about it. Let's talk about something positive.
9. The stock market's down. Now's the time to buy.
10. 777.68 is the biggest drop ever? You mean since 9/11? Since the beginning of the stock market? Since the Great Depression? Or what?

How you handle any potentially negative event depends upon many factors - your temperament, your risk tolerance and anxiety levels, your history, your current circumstances, your resources, your character ... and the level of your emotional intelligence.

With all important things, like this, your EQ can matter as much as, or more than, your IQ. Typically we read varying opinions, and get opposing "expert" advice. How do you make your way through the data, after you have done your homework? It is largely based on intuition (gut feeling), which is partly learned through experience. Intuition is an emotional intelligence competency and can be learned. (Contact me for coaching, or take The EQ Course(tm) - sdunn@susandunn.cc .

If this is the first market crash since you've owned stocks, it will feel a lot different to you.

(Don't know who to attribute this graphic to. It's making the email rounds.)

The Dow falls / Emotional Intelligence

The Dow falls 777.68 points. That's dizzying.

I've said it before and I'll say it again - the financial market, which SHOULD be rational and logical, is the most emotional thing going on.

And why this fall?

Because we do not like uncertainty.

One reason to study emotional intelligence is because you can't make a rational decision if you don't understand what's going on emotionally. Much of what goes on in offices, between people, between countries, in marriages is emotionally based. It's part of the data.

If you've been in the market as long as I have - not to mention the real experts out there - this is to be expected. It happened after 9/11. I was in for "Black Friday." The real diehards will be saying, "Now's the time to get IN."

The knee-jerk reaction when something falls through and becomes unclear (like the negotiations) is panic, and this is what we are seeing. Is it smart to get out of the market now? Can you even think clearly about it?

Take the EQ Course and coaching, and learn more. It's very helpful.