We all have heard the advice “Count to 10”, or “Take a deep breath” or simply “Calm down!’”. The advice is well intended and generally a good idea. The techniques most people know about however are only partially useful. And that’s not because they are wrong but simply because most of us don't really know how to do it - we don't know how to make the breathing or the counting work. And those giving the advice rarely know too.
If you cam master your breathing and you learn how to calm down you may say you have achieved a state of “clear mind” or that you are “in touch with your inner self” or perhaps that you are, “at peace”. All these describe a similar condition, which is useful in general for every human being and-not only when you need to calm down but also to help you think clearly and make better decision in your everyday life.
What is actually happening and why is it so useful? A part of our brain, known as the pre-frontal cortex (PFC) is responsible for our more advanced functions so to speak - eg without it we would not be able to plan how to go from our home to the shop or what to do to prepare the party next Saturday. This is obviously very useful, however our PFC has some limitations. For instance it has very limited temporary “storage” - usually can keep about 4 or 5 bits of information and if the type of information is different (e.g. not just numbers but numbers and sentences and images) then you may have to settle for fewer than 4. The PFC also uses a lot of energy to keep these bits of information and to process it.
Overworking the PFC is a bad idea. If we do it, our brain becomes slow, we get stressed and this will likely result in bad decisions. In important situations or emotional moments, the PFC will struggle to function properly. By learning to “quiet” our brain we can help the PFC by making space for useful ideas to be brought to its attention. These ideas will usually be good enough to get us out of almost any situation.
The advice we are all familiar with that I mentioned at the beginning of the article, when executed properly provides ways to make space in our PFC. For example, an approach that works for me is, if you take doing deep breaths and you focus exclusively on the breathing while allowing any other thoughts to come and go. Breath in slowly then breath out trying to relax those parts of your body where you feel tension and all of the time keep focusing on your breathing and let any other thoughts come and go. This might be known to you as mindful breathing. I find that between 7-10 deep breaths usually help me get back to functioning normally in pretty much every situation.
This is by no means the only approach that can work, but it is one I have used for many years with great results. So next time, when you need to calm down, why not try taking some deep breaths and focusing on your breathing while allowing thoughts to come and go. Count to 10 if you must too! Then return to making your decision and you will most certainly find that the quality of your decisions and perhaps your life will increase soon. I hope you find this useful, especially in high pressure situations like trading.