TraderMind - How To Get A Mindful Edge In The Markets

Dealing with the uncertainty, novelty and change of the markets, coping with the emotional highs and lows of winning and losing, resisting the urges and impulses to take profit early or run losses too far, having the patience to cope with waiting for a set-up and entry and avoiding overtrading, all of these require brain and mind fitness.

Just like the rest of your body your brain can be flabby or ripped, and just like building rock hard abs if you want a six-pack brain you have to target specific mind workouts that build mental muscle.

One area of brain and mind fitness practise that has become increasingly more popular over the years has been mindfulness. Mindfulness is the skill of noticing what is happening, whilst it is happening, paying attention to your present moment experience. Being mindful enables you to be more fully present to what is really going on in both your inner and outer worlds giving you greater situational awareness and an improved ability to be able to manage your thoughts, emotions, impulses and habitual responses, as well as respond more effectively to the markets.

Over the last ten years there has been a growing use of mindfulness based training by the military, professional sports teams, rapid response units to help them to improve their performance and more recently, by traders and fund managers. Mindfulness has been an area that I have added to my own coaching tool kit over the last few years and it has been very well received by my clients thanks to its practicality and simplicity.

“For trading, I think it is just unbelievable how mindfulness helps you to stay here and not to think about the past or future.” - Energy Trader, Germany

Traders who practise mindfulness based approaches can benefit from an increased ability to deal with and perform under stress, better regulation of their emotions, increased attention, reduced impulsivity, less negative thoughts, better sleep and improved health and well-being, resulting in enhanced decision making and increased performance.

“Since I have been working on the mindfulness exercises one thing I have noticed is a reduction in my emotional swings.” -  Equities Trader, London

Here are three quick and simple mindfulness based exercises and approaches that you can practise and incorporate into your own trading day to develop your brain and mind fitness.

The Mental Sit-Up

The sit-up is a staple exercise for the building of a strong physical core. Its equivalent in mental training, for building a strong cerebral core, is focused attention training. Start with 3-5 minutes per day and aim to build up to 10 minutes over time if possible. This exercise is your ‘gym work’.

1. Sit in an upright position with your back straight, eyes closed or loosely focused on the ground in front of you.
2. Focus your attention on to your breathing.
3. Notice which part of your breathing is most prominent and let your attention rest there.
4. As your mind wanders, through distractions either external or internal, notice what distracted you, and then re-focus back on to your breathing.
5. Repeat steps 3 and 4 for the duration of your practise.

The Triangle of Awareness

Before you can manage your thoughts, emotions, impulses or habitual responses, you need to have an awareness of them. Surprisingly the level of awareness in most people is very low and as a result they are on ‘autopilot’ for most of the time, reacting to events as they occur based on their conditioning and life patterns. To get out of the ‘river of reactivity’,  to be able to have more choice and flexibility and be more responsive you need to develop your levels of awareness and a very quick and easy way to begin to do that, alongside doing your mental push-ups is to practise using the ‘Triangle of Awareness’.

Regards,
The TWP Team