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Trade Mindfully: Achieve Your Optimum Trading Performance with Mindfulness and Cutting Edge Psychology by Gary Dayton

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CHAPTER 4

The Necessity of Emotions in Trading

As we learned from Chapter 3 and likely from your own experiences reflected in the exercises in that chapter, we cannot really control or eliminate our emotions. Nor should we try to eliminate or suppress emotions from our trading. One of the great myths of trading psychology is that we should trade emotion-free. In this chapter, we will debunk that myth and show you that having emotions in trading is necessary. We will start with a story that begins in northern New England at a railroad construction site in 1848.

The Unusual Case of Phineas Gage

Our story of emotions begins with the unusual case of Phineas Gage. It highlights what can occur when we lose our emotional processing abilities, that is, when emotions are eliminated from decision-making. Gage, described by his physician, John Harlow, MD, as healthy, fit, and 25 years old, was a railroad foreman laying railroad tracks in Vermont in 1848. One of his responsibilities was to remove rock with explosives to clear the way for the rail line. He was skilled at the task, but on the afternoon of September 13, 1848, he made a perilous mistake. The blasting procedure involved drilling a hole into the rock, then adding explosive powder and a fuse. After this, sand was added to fill the hole, which was then thoroughly tamped down with an iron rod. Once everyone was safely away from the rock, the fuse would be lit. But on this day, Phineas Gage apparently became distracted. He placed ...

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