Friday, December 4th, 2009
Psychology that might ACTually work
For some reason 2009 has been a particularly tough year. As I tell my wife, it’s been our ‘annus horribilis’ – to steal Queen Elizabeth’s description of a year when nothing seems to go right.
One of the positives of the year has been my increased engagement with Acceptance and Commitment Therapy (ACT) which is a relatively new method of psychology that could have a number of implications for traders.
ACT is based on the premise that suffering – including mental illness – is normal, and the greatest damage is done by trying to control or cover up suffering.
At first glance it seems a bit airy fairy. But from my experience a) it works, and b) it is a wise, compassionate psychology.
ACT can be broken down into several areas. But underpinning it all is the acceptance of the human condition: we are inherently designed – largely through how our brains are wired – to suffer; whether its pain, depression, anxiety etc.
Our natural response to suffering is to try and control it. That can be through drinking, drugs, eating, or whatever. Conventional psychology also appeals to our controlling natures by suggesting methods to control/get rid of unpleasant thoughts and emotions by challenging them.
Unfortunately, these attempts at control methods actually make our situation worse. Drinking to get rid of depression, for example, works in the short term, but exacerbates it over the long run. Research suggests that trying to suppress thoughts can make them occur more frequently.
Anxiety, for example, is a natural emotion – particularly for traders. Again, problems occur when we try and get rid of it. From my observations most people do it through drinking. We also shy away from anxiety-producing activities – such as trading – so our lives become smaller and constricted.
One of the least discussed methods of control is muscle tension. I learnt this in Dr Brett Steenbarger’s Daily Trading Coach book. He described traders who brace themselves against negative feelings such as anxiety through tension. That’s exactly what I was doing, which resulted in chronic neck and back pain.
The irony is that realising I was doing this, and then relaxing more, meant I temporarily lost control of my anxiety as it morphed into other sensations and made it (appear) worse. Part of this year has been learning to accept anxiety – in all its weird and wonderful forms – rather than fighting it.
Because ACT is about acceptance of suffering and negative emotions as normal, its practitioners are less into labeling various mental illnesses, which helps avoid stigmatizing people.
The goal of ACT is not to try and get rid of suffering. But through implementing its core principles, research has shown that suffering is diminished.
Apart from acceptance, there are a few other elements of ACT that are also useful:
Mindfulness: Learning to be in the present, rather than worrying about the future and the past
Diffusion: Learning to not get caught up in negative thoughts, emotions and feelings.
The Observing self: Learning to develop the part of one’s self that can neutrally observe the thinking and physical selves.
Values: Discovering what gives your life meaning
Committed action: Setting goals based on your values.
Negative emotions and feelings can be major hindrances to successful trading and other areas of our lives, particularly when we enter into battle with them. ACT is about exiting that battle and getting on with a full and meaningful life.
The best summary of ACT I’ve found is Russ Harris’s The Happiness Trap. He’s also got an internet site ACT Mindfully that has some good material on it.
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December 4th, 2009 at 5:22 am
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