Key result
Market volatility demonstrated a significant inverse relationship with high frequency heart rate variability (HF HRV), while trader experience showed a positive relationship with HF HRV.
Observational
Emotion regulation, as indexed by HF HRV, is associated with trader experience and market volatility, suggesting it is an important component of financial trading expertise.
HF HRV may index trader emotion regulation under volatility; hypothesis-generating for autonomic markers in occupational stress, pending prospective studies.
We describe a psychophysiological study of the emotion regulation of investment bank traders. Building on work on the role of emotions in financial decision-making, we examine the relationship between market conditions, trader experience and emotion regulation whilst trading, as indexed by high frequency heart rate variability (HF HRV). We find a significant inverse relationship between HF HRV and market volatility and a positive relationship between HF HRV and trader experience. We argue that this suggests that emotion regulation may be an important facet of trader expertise and that learning effects demonstrated in financial markets may include improved emotion regulation as an important component of that learning. Our results also suggest the value of investigating the role of effective emotion regulation in a broader range of financial decision-making contexts.
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Fenton‐O’Creevy et al. (2012) reported an observational. Market volatility and trader experience was evaluated on High frequency heart rate variability (HF HRV). Market volatility demonstrated a significant inverse relationship with high frequency heart rate variability (HF HRV), while trader experience showed a positive relationship with HF HRV.
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