It is a common psychological phenomenon that when a person suffers from anxiety, they will also develop a fear of psychosis and other diseases. Essentially as anxiety increases, a person will develop a hyper awareness to the world around them. The limbic system will work on overdrive scouting for threats. This hyperaware state allows in information that otherwise would not have entered in a calm, lower stress person. But it also magnifies the fear of threats that surround you. It literally makes you start to see threats everywhere, even when they don’t exist. You start to think your low feelings are full blown depression, maybe you’re bipolar or there is something seriously wrong with you. Maybe you eat red beets and think you have cancer before realizing it’s just the color of the beets.
We see this manifestation in the markets, especially as we tune ourselves into very short-term timeframes. People will feel tremendous fear and anxiety trickle in as a one-minute chart waterfalls, when the overall trend is still up. We see this when stops get run and the market reverses. We see this when people stress out and struggle to swing trade in fear of limit downs, gap downs, news and other uncontrollable situations that still happen on a relatively rare basis. The hyper awareness of news coming out minute by minute, CPI data, oil reports, jobs numbers, housing starts, Powell talking. All of it combines to create a bit more anxiety and chaos - which then heightens our awareness leading us to believe everything is a potential crash scenario. And yet even when the market comes down it never seems to go vertical without bounces, but our brains get wired to believe it. It’s not just you, the more heightened you are, the more susceptible you are to this phenomenon - so it is imperative we always work on decreasing our negative stress in life and in the markets in order to increase our chances of success.
This narrow focus, the tunnel vision, the short-term fear, has a relatively simple trick that can help mitigate it. Looking out to the horizon. Forcing our eyes to see in a panoramic vision by looking at the horizon, or mimicking the action of it, actually allows our brain to “zoom out” - same as we zoom out on the charts, and can help force relaxation. Below Is a clip from Dr. Huberman of Huberman Labs explaining how forcing ourselves to see panoramic vision can help decrease stress and anxiety.
All this to say. ZOOM OUT. Literally, figuratively and every way possible. Don’t let the fear of what is immediately in front of you stop you from seeing reality for what it is, and catastrophizing every trade, or every doomsday scenario.