Denise Shull is President of The ReThink Group, a consultancy providing advanced market, risk and behavioral intelligence. She holds a Master’s degree in Neuropsychology from The University of Chicago.

Conventional wisdom in trading psychology used to depend on two primary tenets – discipline and "control your emotions."

But that was before neuroscience started putting traders, poker players and other risk-gamers into brain scanners.

Now that we know that all decisions depend on the presence of an emotion, most perception occurs outside of our awareness and that how our bodies feel will influence what we think, Trading Psychology 101 requires a re-write.

Did you know that research indicates we can only make a few – maybe as little as two – “disciplined” decisions in a row?

Researchers call this decision fatigue or ego-depletion. For traders, it means that instead of sitting at the screen fighting for every tick that that same quantity of discipline imbued into a structured plan for getting out of the office and away from the quotes will most likely produce an increase in PL.

Research also shows that complex decisions, or those with many conflicting data points, create the most satisfying results when they are made non-deliberately. This means that letting a trader’s unconscious – or all of his or her accumulated knowledge – percolate or bake into the realization the trading brain has delivered the decision equivalent of superb coffee or heavenly brownies.

In other words, going to the gym not only in the middle of the day but even in the middle of a trade will optimize your trading psyche to make the most profitable judgment call on a trade’s exit point. Pumping iron or spinning those bike wheels turns what we used to call physical energy into market-reading clarity. In fact, it is likely that your better read on the market’s next dance will seemingly magically come to you when your earbuds have your favorite song beating and not when you are staring at every tick trying to force the screen to give up the future’s secrets.

Which brings us to the inexorable connection between the body, feelings, emotions and risk decisions: the maxim “control your emotions” emanates from a misunderstanding. Any of us can feel anything – and not act on. We do that all the time. Logically we only have to control our actions. Senses, feelings and emotions should be considered data and analyzed.

Adopting the strategy of “emotions as information” leads to two primary benefits – knowing the difference between and impulsive feeling and an intuitive (market experience) one. And second, disengaging repetitive emotions and events fueled from our past and acting in a fractal manner from our expectation of what the market is doing. We all bring our personalities to our perceptions. A large part of those personalities contain our characteristic reactions – the market is out to get me, I will all snatch defeat from the jaws of victory, the price action (authority figures) can’t be trusted and on we could go.

Antonio Damasio and his team got it started with the research reported in Descartes Error but now the proof is in, every decision includes emotion. This means every trading decision that turns out to be regrettable can be analyzed not from what went wrong with the analysis but from what feeling or emotion was really driving it. Everyone can look for FOMO or fear of missing out or what is really fear of future regret. Decision theory indicates this feeling to be maybe the most powerful one we have.

To take another example of unconscious emotions and how the concept of fractal applies not only to price but to perception, say a trader has a tendency to fight the trend, most of the time this can be traced to a wholly unrelated mental context of needing to prove how smart they are, needing to buck authority or being stuck in feeling like a victim who missed the real move. Untangling emotional data (versus ignoring it) gives a trader the opportunity not only to be making judgment calls on the here and now but opens up their whole perceptual and judgment toolbox to see and act on the fundamental question, what are most of the other market participants about to do.

Given that most traders try to predict market movements based on numbers alone, the trader who wraps the human question around the numbers while simultaneously adopting what decision science now knows about risk perception and judgment automatically derives a calculable advantage.