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Emotion regulation and trader expertise: heart rate variability on the trading floor

Fenton-O'Creevy, Mark; Lins, Jeffrey; Vohra, Shalini; Richards, Daniel; Davies, Gareth and Schaaff, Kristina (2012). Emotion regulation and trader expertise: heart rate variability on the trading floor. Journal of Neuroscience, Psychology and Economics, 5(4) pp. 227–237.

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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.

Keywords: Emotion Regulation, Financial Decision-Making, Market Volatility, Trading, Heart Rate Variability

Item Type: Journal Item
Copyright Holders: 2012 American Psychological Association
ISSN: 2151-318X
Project Funding Details:
Funded Project NameProject IDFunding Body
Not SetNot SetEuropean Commission under the 7th Framework Programme, Grant Nº231830
Keywords: emotion regulation; financial decision-making; market volatility; trading; heart rate variability
Academic Unit/School: Faculty of Business and Law (FBL) > Business > Department for People and Organisations
Faculty of Business and Law (FBL) > Business
Faculty of Business and Law (FBL)
Learning and Teaching Innovation (LTI) > Institute of Educational Technology (IET)
Learning and Teaching Innovation (LTI)
Related URLs:
Item ID: 34212
Depositing User: Mark Fenton-O'Creevy
Date Deposited: 20 Aug 2012 08:43
Last Modified: 07 Dec 2018 11:05
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