Meditation for trading. How to avoid thoughts that interfere with achieving success on the exchange.
Perhaps you know trading patterns perfectly well and make the best use of the trading and analytical ATAS platform instruments to find entry points. However, the result in the form of the deposit increase is far from becoming a reality. What’s the problem?
Most probably, the problem is in your trader’s psychology – emotions, discipline, ability to balance your personal features with the market movements. The goal of this article is to help traders to better understand themselves. Someone may say that meditation is too far from trading. However, we think that it is not so, because strong psychology is an important factor of achieving success in the market.
What meditation is
Meditation is the process of brain training, during which a person learns how to better understand his or her own thoughts and emotions.
There is a wide-spread opinion on the Internet that meditation helps to control emotions. However, negative and positive emotions (such as joy, anxiety, distress, etc.) are present in the life of any person and, by themselves, they do not do harm or good. Emotions and thoughts change the human physical state and reduce concentration and attention. Distress situations are accompanied with hurried breathing, stomach muscle convulsion and eye muscle jerks. If a trader is able to focus on his physical state in order to slow down breathing and compose himself, he will be able to bring his emotional state into compliance.
Negative emotions do not allow traders to adequately assess the market situation and to stay in sync with changing circumstances. Meditation for trading helps them to separate themselves from their feelings and monitor their thoughts and physical senses.
We can make the following analogies in order to better understand what meditation is:
- When a person is quiet and happy, his brain is like the cloudless blue sky. As soon as the person experiences emotions or thinks about something, clouds or even heavy clouds could cover the blue sky or even a storm may start. Sometimes people are so scared by heavy clouds and a storm that they forget about the blue sky. However, there is always the blue sky above the clouds. Meditation helps to free your blue sky from clouds.
- You can also imagine that the human brain is like a lake. Every thought creates rings in the water. Many thoughts create ripples or even waves. If the weather is rainy and windy, the lake surface gets muddy and you do not see the lake bed. However, if you submerge in water, you will hardly see the rain and storm.
- When a person meditates, he as if sits on the roadside and watches the traffic. The passing cars are thoughts and feelings. Everything you need to do during meditation is to sit on the roadside and watch the passing cars. It sounds easy but, as a rule, people are scared by intensive traffic, that is why they run onto the road and try to stop the cars or run after them, forgetting that the main idea is to just sit and watch.
Why traders need meditation
Trading is a tough experience with a heavy emotional strain.
- Money losses and gains make traders experience a lot of emotions during every trading session.
- Emotions live on thoughts.
It’s like an endless circle – a trader feels himself either anxious or happy, thinks about money and his emotional state interferes with his market signal analysis.
Meditation for good trading teaches to monitor your thoughts and see them from different sides. When training his brain, a trader stops equating himself to his thoughts and starts to accept things more calmly.
Emotions send to traders important signals, which you shouldn’t ignore. Successful traders use their emotions and are able to take themselves off their emotions. The market developments do not draw them in. For example, they can use the panic in the market and make money on stop activation.
It is believed that more efforts lead to better results, but it is not always so. Just remember your trades. Perhaps, you achieved the best results when you were not nervous and scared. Sometimes, you shouldn’t hurry and open doubtful trades in a flat or run after a small profit during lunch time.
It is crucially important for traders to be able to:
- wait for the trades to come;
- focus on the ideal execution of their trading plans.
However, the human brain usually responds reactively. If something happens, the brain sends a signal to the body to run and make some immediate decisions. However, traders, more often, need to stop and think at such moments whether it is possible to respond differently. Meditation helps to become more relaxed and a trader starts to experience a feeling that he likes just to wait patiently for ‘his’ trades.
Moreover, meditation can teach you to bring yourself back to the present, the current process, when the brain is distracted.
Visualization and meditation for trading
Some meditation techniques use visualization.
Visualization is a detailed imagination of what would take place BEFORE the event.
Visualization by itself is very interesting for traders because it helps to solve mental problems connected with stops, with the fear of position opening and with the early closing of profitable positions. Visualization is used, for example, by Michael Phelps, the 23-time Olympic Champion. See Picture 2.
Visualization and meditation exist separately from each other, but for some people it is easier to imagine some visualities and focus on them during meditation.
How much time meditation takes and how often you should practice it
It is necessary to meditate every day. Sometimes it might be difficult, since some time has to pass before this action becomes a habit. On some days it would be easier to meditate, on some – more difficult, but, in this case, the process is important rather than result.
It is often recommended to meditate in the morning, immediately after you wake up. This is a good opportunity to be awake, feel physically vigorous and set up your mind on consciousness during the day.
Here are some advice how to start meditation:
- choose the time of the day when you will be able to meditate every day. It is easier to form a habit if you repeat some action at the same time of the day;
- choose a quiet place. It would be easier at the beginning if external sounds do not distract and bother you;
- sit up comfortably. It is better if you keep your back straight because it is easier this way to breathe deeply. It is better not to cross your legs and arms because the blood will not flow easily into limbs and the body will feel tired. It is important to sit straight because when a person lies, the brain sets up on sleep. It is important for meditation to find a balance between the relaxed and focused states;
- it is better to meditate under the direction of an experienced instructor. For example, to find an audiotape and do exercises while listening to them.
As a rule, meditation starts with several deep breaths in and out. Eyes are open and your sight is not directed at something specific. The breast straightens out and the lungs are filled out with air. When you breathe out through the mouth, the breast relaxes and the lungs shrink as a balloon when the air goes out of it.
After you make several first breaths in and out, the brain sets up on meditation. You can close your eyes after that and focus on your breath. First, slowly scan your body top-to-bottom to ‘see’ whether there is discomfort or tension somewhere. Apart from physical feelings, it is important to pay attention to emotions to see whether you feel yourself quiet, disappointed or glad.
Then direct your attention to the breath. It is easier for some people to focus on the breath when they calculate breaths in and out. You should count them to 10 and then start from the beginning.
The goal of meditation is not to stop thinking but to track the appearance of thoughts and allow them to come and go. That is why, every time when your attention goes from your breathing to some thought, stop yourself and try to realise what this thought or feeling is. As soon as you name or identify the thought, it goes away easier and you can come back to breathing. It is not necessary to capture all thoughts – try to capture only those, which really distract you from breathing. It is difficult for people to focus on one action for a long time, that is why the appearance of thoughts during meditation is only natural.
It might not be easy to study to meditate, because the brain has many different moods. A person cannot fully control them but can learn how to use them. It comes with experience and training.
While meditating for successful trading, traders try to establish a place of quietness and rest for the brain and do not try to lock all the thoughts in one place, that is why it is important to get satisfaction from the rest and quietness.
What problems meditation helps to solve
There are different meditation techniques. They are directed at dealing with anxiety, distress or fears. Others teach to be happier and work more fruitfully. There are short and long techniques of reloading after a hard working day.
Traders use meditation to learn how to focus on the current trading situation and observe their emotions. They may become less critical in respect to themselves and stop thinking about themselves as losers due to a series of loss-making trades.
Meditation for trading will help you to accept the market instability easier and adapt to the trend change more flexibly. The human brain likes stability and certainty, that is why it is afraid of changes, which it accepts as a threat. Meditation helps to reduce the brain resistance to changes.
There are many meditation books and videos on the Internet, that is why it is difficult to recommend something specific, which would fit all people. Every trader may choose an instructor for himself depending on the trader’s goals and experience. You can find a lot of meditation techniques on headspace.com, which has more than 3 million subscribers. Andy Puddicombe, the founder of this resource, is a personification of meditation and consciousness.
Brett Steenbarger, one of the most famous psychologists in the trading environment, writes that if you want to become a successful trader, you need to learn how to activate your ‘internal observer’. This could be done not only with the help of meditation but also with the help of hypnosis or sound-and-light machine.
- Successful traders feel the market but feelings and emotions do not interfere with their trading activity.
- They monitor not only market patterns but also their own behavioral patterns.
- Psychological comfort during trading is as important as a good trading strategy.
- Meditation helps traders to use emotions and feelings consciously as additional data when you work in the market.