Emotional Fatigue in Trading: Overcoming Burnout for Success

Trading is a very complicated activity, not only from a technical point of view but also emotionally. The impact of the psychological sphere on the market is rarely discussed, yet it plays a leading role, as it is capable of exerting a significant influence on earning prospects. In the worst case scenario, the trader suffers from real psychological disorders. Let's think about anxiety, which is a real pathology and as such must be managed. A little lower down, on a hypothetical scale of severity, we find emotional fatigue. In this article, we address the topic, explaining what it is, what its causes are, and how it can be resolved.

What is emotional fatigue

The term "emotional fatigue" refers to a condition in which it is difficult to manage emotions. A condition that, to tell the truth, is incredibly frequent in trading. This should not be surprising: the market confronts the trader with choices that have serious consequences, which are certainly capable of generating emotional upheavals. Let's be clear, for better or worse: even the inability to manage positive emotions, such as the euphoria that follows a winning trade, is a symptom of emotional fatigue. Everyone, in life and not only in trading, has experienced one or more moments of mental fatigue. This happens, precisely, in periods that are particularly dense with commitments, or important for career, affections, etc. In trading, however, how does emotional fatigue manifest itself? Traders who suffer from this disorder generally experience the following behaviors. Marked sensitivity to events. Under normal conditions, a trader is able to manage emotions quite efficiently. Obviously, they do not remove them (this is physiologically impossible) but certainly mitigate their effects. Those who suffer from fatigue experience events as if they were amplified. In short, they become more sensitive. In everyday life, all this poses the risk of failing one's goals. In trading... Also. Lack of clarity. It is a direct consequence of marked sensitivity. It is a mechanism that everyone is able to understand: those who experience emotions in a tumultuous way reduce the space for rationality, with all the consequences on the effectiveness of trading action. Stress. It is one of the consequences that are "appreciated" when emotional fatigue is not treated, it becomes stress. The latter causes even greater suffering and can be decisive, in a negative way, on the effectiveness of the investment and on the prospects for gain. Even when emotional fatigue does not degenerate, there is still a feeling of underlying stress, which is also dangerous, albeit to a lesser extent. The causes of emotional fatigue can be traced back to the dynamics inherent in trading. From a certain point of view, it is an almost physiological disorder. Of course, to worsen the situation and increase the probability of contracting this disorder, two factors stand out. Predisposition. Some people are more sensitive than others. The luckiest are naturally endowed with cold blood. Notwithstanding that emotional resistance should be considered on a par with a muscle, and as such can be trained. In any case, those who are emotionally inclined by nature have a much higher probability of developing emotional fatigue. Excessive frequency. Regardless of predisposition, if a trader invests compulsively, and therefore with a frequency higher than normal or simply beyond their possibilities, they risk becoming emotionally fatigued. Fatigue, primarily mental, is therefore a factor to be taken into account. If we talk about consequences, if left untreated, emotional fatigue can generate quite serious effects, to the point of pathology. We have talked about stress as the main consequence of untreated emotional fatigue. However, it is not the worst consequence. In the worst case scenario, in fact, real anxiety develops. Anxiety is a psychic state that often assumes the status of a real pathology. It generates constant worry, fear, and greatly reduces the space for clarity. For a trader, it is a real catastrophe. Anxiety, in life as in trading, is difficult to treat, and certainly requires the help of an expert. Therefore, it is good to avoid this condition and act, if possible, at an earlier stage. In short, it is good to do prevention, that is, to resolve emotional fatigue at its onset.

How to resolve emotional fatigue

As we have already specified, emotional fatigue is not a serious condition, also because it is all in all psychological. Often, then, it is completely transient. The important thing is not to ignore it, therefore not to let it degenerate. To resolve emotional fatigue at its onset, some precautions are particularly useful. Taking a break. Trading is tiring. It is, obviously, on a mental level. The mind, however, as everyone knows, needs rest just like the body. So, if you suffer from emotional fatigue, this is the solution. There are no other equally effective ones. Obviously this can cost money, since staying out of the market means losing opportunities. Rethinking trading. If you don't want to miss opportunities, at least not all of them, you can proceed with another solution, certainly more complicated from a cognitive point of view: reducing the importance that trading has for yourself. How to do it? Well, the only way is to internalize certain thoughts, that is, those that put trading in a non-priority position compared to other facts of life. Of course, one way could be to reduce exposure, which is certainly easier but also a little less effective and, above all, if there are no economic conditions that justify this, more expensive.