Trading With Your Body: On The Importance Of Honing Your Natural Intelligence
Your body is your edge; do not let it be your end.
Like the tales of old, those who can do what most cannot are bound to pay for it. Those who can see the future pay with their eyes. Those who steal fire from the gods pay with their liver. Those who reap the bounty of an uncertain or impossible environment pay for it with their minds and bodies. Yet, rarely do we appreciate the toll on the latter. Trading comes at a great cost, and we are not here to discuss the financial ones.
Read an athlete’s biography, and it should mention what the sport does to an athlete: the physical cost of it. So too, a study of trading is deficient without examining what it does to a trader. On a long enough timeline, as with most dominant athletes of each generation, they will most likely retire not due to other competitors but from injury or disease before the biological clock comes for everyone. The same is true for the best traders; your body will retire you before the market does.
Trading bears much of the cost of professional sports upon the trader. But why is this so? We will use John Coates’ book—The Hour Between Dog and Wolf—to explore this, a rare, unified source of information on this topic. What you will find below is an exploratory article that ties into various observations and experiences of traders across the AXIA desks. This is another purpose of Asymmetrist: to explore on the fringes, tie into our known, strange financial world, and make the implicit, explicit for the practitioner first. Those who wish for more detail on the experiments, the science and other matters should consult Coates’ work directly.
Here is the opening shot: As Coates says, we often assume that stress and decision making is a matter of psychology—a mere quandary of the mind. Why is there such an overt reaction from the body, especially as traders are relegated to twelve-hour chair-warming shifts? Since we seemingly do not use our bodies?
Feeling Your Reasoning
In an image: human decision-making is embodied—we are not a brain in a vat; trapped in this piss-weak-good-for-nothing-mortal coil; instead, we think with our bodies, as Coates puts it, and our pre-conscious processing and gut feeling drives us; far ‘smarter’ than our conscious self. The nature of this embodied decision-making is examined throughout Coates’ book, and he reveals how it is a physical experience, that we do indeed ‘think with our gut’ and that good traders… do not just process information, they feel it.1
Consider the argument that higher forms of cognition, of thinkin’—philosophy, literature, trading—is possible because of the repurposing of the same processes of your brain that executes movement. They are inherently tied; such is neuroscientist Daniel Wolpert’s argument. Behold!—he points—to the humble ‘tunicate’: a sea swelling tube-stuck-on-a-rock creature, which, after moving around in the sea to find a new home, ingests its brain. Life is good on the rock, why move?
So goes the observation, Coates writes, that if you don’t move, you don’t need thy brain, revealing the biological priority of movement rather than thinkin’. We notice this empirically, for instance, in the sudden clarity of thought when walking. Thus, the evolutionary imperative: thinkin’ gets you killed. Move first, above all else. Worst of all, if you sit and think! If elevated thoughts are a derivative of the more ancient part of the brain—executing moment—what happens to your cognitive powers when idle, sedentary, for long stretches of time or large swaths of your life? This ostensible luxury afforded to so many, and so recently?
That is one way to view—out of many—how embodied we are, as opposed to the classic Western notion of a separated mind-body-spirit (Holy Trinity, yes?) We’ve spent much of history damning each one in turn, only to realise how ironically all too human these attempts were, and how many other problems arise when we try.
But what about feelin’ it? Of gut feelings? Well, it isn’t just a saying! Decision-making involves your gut—so relays Coates—and it is as involved in decision making as your brain; another embodied example. Gut feel is the sum, complex total that emerges from a massive and continual surveillance operation run by the body. There is no clear separation between an analyst and their cold, intellectual decision-making and the fly-by-wire gut feeling fast shooter who only trusts his instincts. Logic and emotions are not antagonistic, as many assume in our domain: that all traders need to purge emotions to reach the lofty pantheon of profitable traders. It is, once more, part of the complex whole. To illuminate the point, Coates relays the details of an experiment which inferred that a patient’s intellect counted little for making good decisions. How did they find out? The patients had brain damage that impeded access to the signals from the rest of their bodies; they could not receive “homeostatic and emotional feedback,” and that made all the difference.2
Bodily feedback partly amounts to ‘gut feel’: the muscles, hormones, the nervous system, heart rate, breathing and more, the sum product of all the feedback systems that generate action—movement! Then, the gut itself, which is packed with “approximately 100 million neurons ... and produces the same neurotransmitters as the brain,” Coates writes.3 Far more goes on down there than just digestion; brain affects gut—gut affects brain in mood, feelin’ and thinkin’.
Finally, this feedback is accentuated by ‘interoception’—this continual inner-body surveillance operation—which can allow the mind and body to collect all information, even subtle or intangible things such as the air in a room, and transform it into tangible output: an experience, a feeling, a thought.
And here’s the rub! You do not need a physical altercation to experience a strong physical response. On some level, we all watch, read or listen to stories for their physiological—physical—effects on us. We peek at horror movies since we long for the tension our body feels… or that song to get your blood moving… or the inspirational stories to have your guts well up as you glimpse the future. Imagine if you couldn’t feel any of that! If you were, somehow, a brain trapped in a vat with only some green fluorescent fluid to keep you company.
This is all consequential for us as traders. We use the powers of our bodies for adept market navigation, especially in the exceptional ‘once-in-a-lifetime’ shock moment where the sample-set, inductive, data-driven operator or algorithm fails. But we pay for these powers too, because our body treats financial risk as real physical risk. This means your body prepares for exceptional, instant, physical movement—your hormonal profile explodes; your central nervous system lights up; your lungs start pumping; your heart scrambles into your throat each time you hit into that gut-spilling roller-coaster market flow. This body decision-making is purpose-built and extremely fast in eliciting changes—chemically and electrically throughout the body as it needs to react to fast situations like a four-hundred-pound silverback gorilla barrelling down towards you, or the S&P 500 as others would call it. But your body treats it all the same. And did you think you could get away with this year over year without consequence?
Financial Violence Is A Civilising Force
Doing this repeatedly, generating these visceral body reactions when operating in persistent uncertainty—in a complex, chaotic environment—has a price. Humans have not developed to handle such long-term disruptions to our physiology, particularly, as Coates highlights, by sitting in chairs all day as traders. Especially when one better regulates such emergency releases from frantic movement—like adrenaline and cortisol—with actual running or intense physical activity followed by recovery. However, as traders, we do not easily regulate any of this. We retain it all in the chair, doubling these adverse effects with little recovery.
Eventually, Coates reminds us, this transforms into heart disease, diabetes, a host of immune disorders, and other serious effects, not least of which are long-term sleep and recovery disruption. Trading is not unique in this regard, but it is an important reminder for those who expected something different.“Stress hormones linger in our brains, promoting pathological risk aversion, even depression, and circulate in our blood contributing to viral infections, high blood pressure, abdominal fat-build up and gastric ulcers,” Coates writes. “Financial risk-taking is as much a biological activity, with many medical consequences, as facing down a grizzly bear.”4
But what is more unique and insidious for intraday trading is that this persistent exposure to peak stress can often occur days apart, a compressed window of time to experience it all and amplify the sure-fire physical toll. Or consider that even a ‘victorious’ big up-day can be pyrrhic, as it could have involved several cycles of losses before the big win, all of which carry these various impacts on the body, experienced repeatedly in hours with no pause. And it happens repeatedly no matter where the trend points to a trader’s P&L.
But the toll can be far more immediate! Coates describes a subtle condition of “learned helplessness,”5 which, unfortunately, has been observed on trading desks, where the trader… slowly… disappears. The once adequately stimulated, the ‘smash your racket on the court because you know you can do better’ type of trader is now… oblivion. Routine slips, his language is dismissive, not decisive; they abscond their captaincy and instead seek comfort as a resigned passenger. They are doomed, a master of their fate no longer. They become secretly thankful to miss volatility; now opportunity avoidant rather than opportunity seeking, because of the market's persistent, uncontrolled electric shocks; dealing in this constant uncertainty and unnatural, prolonged exposure to chaos has overwhelmed mind-body-spirit as a whole.
This partly reveals the apt intuition on the AXIA floor that trading is more akin to a sport than an art or science. So far, we have made this explicit: you trade with your body, not just mind, because you process information and react with what is below your neck as much as above it. There should be no separation. Trading is no mere cerebral exercise, and in keeping with the ancient Greeks, neglecting the body atrophies the mind. And neglecting the body, in turn, atrophies the longevity of your trading career. Power then, to those who bulwark their bodies to offset as many of the costs of operating in unstable, chaotic environments.
Sustaining Your Body’s Intelligence
We will use one trader in particular from this AXIA’s trading floor to examine deeper because of his physicality on and off the floor. He will be henceforth known as The Godfather. You’ve already unknowingly encountered him within Asymmetrist. Yet, he is soon to be known to the world as one of the ten in Traders of Our Time: Navigating the Market’s Impossible Landscape, a book co-authored by yours truly and AXIA’s Alex Haywood. In Chapter Eight, our trader is described as such:
“Now at age forty-three, with a nearly twenty-year career behind him, The Godfather trades at his best and looks at his best with a lean, athletic physique cultivated over years of getting it right. That comes from the iron discipline required to trade as committedly as a young trader should and persistent training for Brazilian jiu-jitsu like a man two decades younger while juggling his responsibilities as a husband and father of three. He is, then, the benchmark for senior and junior traders.”— Extract from Traders of Our Time.
And so, The Godfather is a career reinvention story and an energy story; the man is laden with it. Next to his consistent trading routine, his consistent training ethic in Brazilian Jiu Jitsu has served him a long way. The idea of sport, or plain exercise, to improve energy levels is well known. Empirically, there is no use in throwing in supportive footnotes to acknowledge that water is indeed wet. Exercise is also well known to fight the long-term effects of stress.
However! Our layman’s hypothesis, if you permit, is that sports training and exercise soften the negative feedback of what Coates calls the “winner effect”6—that is, if you are on the losing side. In short: winning a fight or competition in many male species—including humans—leads to a surge in testosterone; physical anabolic effects—the good stuff; the gym rat says!—moreover the winner’s persistence and fearlessness harden, creating a reinforcing surge of testosterone for the winner, and so his winning streak is more likely to continue. The loser instead experiences the reverse, a downward spiral.
How can we offset this? Barbell training, for example, raises testosterone and produces general anabolic effects. If the trader faces consistent losses, then strength or overall sport training can offset the negative drop in testosterone levels and provide a supplementary way for a trader to deal with general instability and chaos. Like athletes who do preparatory work, ‘pre-hab’ and ‘re-hab’ to ensure continued physical performance—so too should traders treat their strength and exercise levels as integral to trading performance; of those who wish to remain long term functional, healthy with competitive energy levels in the backdrop of age.
The question of testosterone improving risk-taking tolerance and confidence is understood, yet it may play into vital physical skills for a trader. Coates writes that it also enhances visual attention, focus, and information filtering, “maintain search persistence, or augment visuo-motor skills such as scanning and speed of reactions.” 7 All of these are vital for order-flow price ladder traders and navigators. At face value, The Godfather demonstrates it dramatically; he stands in better shape than those fifteen years younger with energy levels to match. “It keeps me sharp, and keeps me fast,” as The Godfather says, frequently hitting the similar best prices as The Warrior, known for his speed. That is the simple intuitive conclusion. Indeed, it is hard to disprove the alternative as The Godfather might be touched by the Gods and gifted with energy, with or without the gym. Yet, consider the bigger picture—what is the best way to build resistance to stress? By frequent, non-lethal, exposure to it, and sport provides the right, timed stress doses to be found outside the markets.8
Further, routine and habit, where they can be instilled, are the tonics for handling chaos, providing stability, predictability, and familiarity for your mind-body-spirit, which can never be found in markets. A solution to those chronically stressed is not a quick holiday abroad but a doubling down on familiarity, on routine—of seeing, hearing, and feeling the same surroundings and faces as you have always seen, to handle other parts of chaotic, fast-paced life—the markets.9 The new roll-out-of-bed rambler junior trader is not only behind on catching up on the news and overnight moves, but they have lost the sense of the market pace. They are also consistently exposed to the long-term stress of the market as it bears down on his shoulders stronger than ever—there is no support—of a foundational familiarity, a routine, in their life.
As shown by Coates' experiment, long-term stress exposure is even more pernicious for the novice. While veteran traders do have volatile and high testosterone and cortisol levels, regardless of their ‘surface level’ emotions, they consistently return to baseline quickly following market action. Which is important: surges in cortisol in the short run are helpful, yet detrimental to health in the long run. Yet the reverse is true for novice traders: their cortisol levels cannot return to baseline, leaving them agitated and anxious and becoming opportunity-avoidant rather than opportunity-seeking. 10
So, routine is even doubly more important for the new trader than for the veteran. How would this roll-out-of-bed rambler junior hope to compete with The Godfather, who was bred routine and familiarity throughout his trading years? One committed to being orderly and timely and allow himself to be as fast, aggressive, and determined on a trading floor, honed by sport and matured, not withered by age. The Godfather survives because he learned to handle chaos and how to wear chaos sustainably.
Trader: A “Hunch Athlete”
The ability to generate powerful bodily reactions—gut feelings—and the capacity to perceive them through “sensitive interoceptive pathways”11 define what Coates calls a hunch athlete.
He reasons that, like athletes, some traders are more naturally attuned to have more powerful gut feelings. Yet how does the body know what to react to, in response to the market action, phenomena and patterns? As rightly held, intuition draws from a well of specific experiences. The somatic marker hypothesis proposed by neuroscientists Antoine Bechara and Antonio Damasio suggests that our memories are not just stored as abstract events but are tethered to the physical sensations we experienced at the time. Every memory we form is linked to the physical sensations we experienced in that moment—these bodily imprints serve as internal signals that guide our future decisions in a similar—now familiar—situation. When confronted with a familiar situation, we don’t just weigh our options ‘logically’—brain in a vat—but sense them with our bodies. “When we scroll through the options open to us,” Coates writes, “each may present itself with a subtle tensing of muscles, a quickening of breath, a slight shiver of dread, a brief moment of calm, a fission excitement—until one just feels right.” 12
An observation of The Adventurer becomes more potent with this in mind. Like The Godfather and The Warrior, all three are featured in Traders of Our Time and are noted for their physical presence. They are expressive, gesticulate, and loud, wearing their emotions all over their trading desks. It’s a bloody show. Once, The Adventurer sought to force himself to reign in his expressiveness, his shouting, swearing, and yelling, and tried to become as unreactive as possible, but then he experienced a sharp drop in trading performance. Strange!—unless it was these very somatic markers, engraved into his body through pain, and every spectrum of emotion, each time a pattern presented itself, that he was now tuning out or ‘consciously’ overriding.
Using Coates’ hunch athlete hypothesis, it may very well be that the elusive quality we call ‘trading talent’ is better understood as a heightened interoceptive ability—the capacity to sense and interpret internal bodily signals. The Adventurer, notably, was a ski racer before becoming a trader, reinforcing the idea that interoceptive sensitivity plays a role; after all, his sport demanded sharp reflexes and split-second decision-making. Perhaps athletic disciplines naturally select against those who lack this sensitivity, filtering out individuals who struggle to tune into their internal cues. The sport possibly heightened The Adventure’s interoceptive sensitivity through enhanced body awareness, which served him well in trading. Similar to The Godfather. Coates points to research showing that heartbeat perception serves as a reliable stand-in for visceral awareness and that those who are overweight tend to exhibit lower heartbeat awareness, almost as if the body’s signals are dulled or obstructed. Yet another compelling argument—among many—for staying fit and athletic, a principle The Godfather exemplifies.
Consider that this can make The Godfather’s and The Warrior’s flow and news trading skills so effective—to become quick and convicted operators in fast moving market narratives. The Warrior’s uncanny memory of market moves, patterns, reactions, and headlines from a decade ago could be steeped in these somatic markers; his manic like presence at the desk, emotional pain which he sustains, might be uniquely effective to engrain these markers and sharpen his intuition and enrich his gut feelings. Like Coates said, good trades feel information. Others featured in Traders of Our Time, like The Razor, The Hero, and The Engineer, employ trading strategies and styles that have been regarded as colder, slower-paced, methodical, and analytical from an outsider's perspective. Yet, The Engineer actively monitors his state and physical tells when trading—the heaviness of his legs, the sweat on his forehead—to understand the meaning of his position-taking. He draws on a well of gut feeling, even if he is silent.
And then there are traders at the desks themselves. The noise, the hubbub, the conversations undoubtedly wash over a trader and feeds into their various pattern recognition, which transforms into a gut feeling: the way the traders talk, how they eat, the atmosphere on the floor, or the very absence of it all! Nothing had revealed this auditory importance, the atmosphere and the mood generated on a trading floor once lost, as with the government stay-at-home orders during the COVID-19 pandemic. This was truly a disembodied experience, as if trading half blind—the markets were roaring but the traders mute; a silent movie experience.
The New Professional Stays New
We are already in an era where traders have longer careers, yet the maturation period to emerge as a consistently profitable trader is longer too. Years, not months, if operating in the most open-ended, most bountiful yet most dangerous environment of all: discretionary, outright trading. Burnout is no longer the accepted assumption but a symptom of failing to prepare and not building sustainable physical practices from the beginning. The trader must structure their life and protocols as an athlete does because the competitors of the future are already doing so. Thus, it has become a minimum to compete. As we have said in Sitzfleisch, when all else is maximised, it will likely come down to this: recovery. What you do off the trading floor, over years and decades, will determine your longevity. To endure is to regard yourself as athlete-like and accept the lifestyle sacrifices this entails: to train, recover, and preserve. Perhaps the reverse situation, and therefore assumption, was self-fulling: if burnout is fast and inevitable, why sacrifice and labour on sustainable practices in the first place? Why plant crops when the world will end in a few months?
Like we also said in Defeating the Discombobulating Dialectic Part II, the anomalous will become the centre: the monastic, athlete-like trader that was once on the fringes—an odd fellow!—now dominates today. And the new traders of the future that dominate tomorrow will entertain no separation of trader-athlete in the way mind-body has been separated for too many centuries. Those in the far future may not have even realised there even was a separation in the first place, similar to the entrenched dogma between various trading methods, edge and their reductive labelling.
These athlete-like demands also glint of the more significant career forces that shape markets and traders in turn. Evermore power goes to the trader who forgoes the immediate, invests for the future and remains steadfast where there are no apparent signs—or seeming regression—in the rewards promised to you. In other words: faith. Such it has been for the strange, frontier-like skill acquisition, to leverage other intangible tedious, difficult high effort practices that have ostensibly little to do with trading. And to now make explicit the very ancient wisdom of preserving and enhancing the body to power the mind, for they are one. Your body is your edge; do not let it be your end.
Acknowledgements, Permissions & Disclaimer
Grateful acknowledgement to AXIA for granting access to their traders.
The photograph, provided by Axia Futures, is used with their permission, and they retain full ownership and copyright over the image.
Disclaimer: Do Not Do Stupid Financial Decisions. This Is Not A Game.
John Coates, The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust (London: Fourth Estate, 2012), 85.
Ibid., 90.
Ibid., 104.
Ibid., 4.
Coates, The Hour Between Dog and Wolf, 213.
Ibid., 166.
Ibid., 167.
Ibid., 224.
Ibid., 238.
Ibid., 229.
Ibid., 114.
Ibid.