3 great meditation habits for peak trading performance

3 powerful meditation habits to unlock peak trading performance​

“A quiet mind hears silences of the universe.”

How many traders use meditation to unlock peak trading performance? How many traders recognize that the real battleground is within the mind, not the markets?  

The majority of traders have made all of the common blunders. But what distinguishes those who will be able to conquer them?

Going beyond technical research and market tactics in this blog, we strive to uncover the edge that resides within the individual who makes trading or life decisions. To unravel the secrets of superhuman performance and the tools employed to achieve such states of being, we answer the following questions in this blog:

  • What is the Flow state in trading?
  • What role does meditation have in trading? 
    What are the several approaches that might assist you in becoming master trader?
  • What are some of the most effective mental strategies and habits that traders may adopt to improve their performance?
  • What is experience sampling?
  • What can we learn from Lemmings and How can we take advantage of mass irrationality?
  • How to use paper trading as a system to develop trading instincts?

THE FLOW STATE

It is not only important to remove emotions from your trading, but you also have to get an instinctual feel of the market. It is possible to achieve a state of mind in which you are profoundly concentrated and focused, as action and awareness sync to produce an easy flow and you are at one with the work at hand.
This sensation is referred to as “being in the zone or as the flow state, and anybody can achieve it.

A state of Flow is where a person gets into the zone and performs at peak efficiency. In sports, its called by various names, like, “getting a hot hand” in basketball, “being in the form” in cricket, etc. 

In trading, one also has to find that sweet spot where a trader has not only conquered his emotions, but infact he is in-tuned with price action and achieves a high degree of accuracy and efficiency while making trading decisions. 

The distraction and disconnect from the present moment prevent us from being truly immersed in the trades/markets and effectively applying our technical analysis and other skills. 

It’s not an emotion that gets in the way of our trade; it’s a lack of capacity to stay in the moment.  

A rollercoaster ride of emotions in trading takes us out of the present moment. 

New traders are either concerned about their future which makes them afraid, or they are lamenting a past loss and the pain it caused. 

When we push ourselves to get richer, we’re thinking about the future. When we use hindsight to analyze missed gains or incurred losses, we often get trapped in redundancy of “what could have been if X happened?”. 

These states of mind hamper their ability to open a new position or take advantage of the opportunity at hand. 

“Trading mastery is a condition of a total embrace of probability rather than a state of resistance towards it.”

 

mediating yogi with keywords

As an observer of self, we want to be anchored in the now so that we can tell the difference between a feeling that takes us back to the past or one that takes us into the future vs. one that comes from a deep, intuitive sense of what is occurring right now.

If you’re having trouble being disciplined in your trading, it’s possible that it’s not an emotion you need to get rid of. Instead, perhaps you need to improve your awareness, concentration, focus, and mindfulness. In terms of trading psychology, this is a crucial differentiator.

A state of Flow can be achieved through meditation practices. 

But, What is Meditation? How can Meditation help in trading? What are different ways to meditate? 

Let’s dive right in:

Anchoring through Meditation​

Happenings, occurrences, and life experiences come and go. Everything is in perpetual flux: winning trades, losing deals, anxiety, greed, grief, happiness, and, finally, your own life. 

Learn to keep a level head while you go through it.  Meditation is the key to achieving this state of mind for trading.

Regret, guilt, and concern are just as potent as fear and greed. Regret keeps us stuck in the past, whereas anxiety projects our worries into the future. 

Meditation can help us stay in the present by fostering introspection and increasing access to meta-knowledge, which can help us see what is genuinely going on in the here-and-now of markets.

Traders often believe that overcoming their emotions would enhance their trading, and many turn to Meditation to help them do so. However, this overlooks the reality that some types of Meditation, such as loving-kindness Meditation, can heighten emotional experiences like thankfulness.

The main benefit of Meditation for traders may be that it brings us back to the present moment, allowing us to make judgments based on present-centered awareness rather than past and future profit and loss worries. 

According to scientific research findings, Meditation appears to have the most significant influence on our cognitive processing and capacity to filter information in the current moment properly.

This enhanced filtering stops negative thinking loops from repeating. It makes it easier to access the meta-knowledge that helps us make reasonable decisions.

The objective is to become completely aware of our emotional responses at the moment, rather than being emotion-free, so that we may use them 

as information rather than distractions. However, this allows us to shift negative emotions into positive outcomes.

Observing your thoughts, letting them go, and then returning your attention to a focused subject is crucial to staying grounded and mindful.

A Simple Guide to different types of Meditation

You notice your thoughts when you practice Meditation, which involves sitting motionless and silently while concentrating your awareness on your breath.
You stop ruminating on such ideas and release them by focusing on the breath as an anchor.
Your concentrated breathing raises consciousness, resulting in peace, tranquility, and non-judgment. The practice
strengthens and deepens awareness of the present moment throughout the waking day.
Meditation develops self-awareness, discipline, persistence, and creativity throughout time.
Meditation and bringing focused awareness to your breath and thoughts at any given time (mindfulness) enables you to notice emotions as they develop and keep those that lead to poor decisions under control, such as rage and jealousy. Meditation assists you to be calm and focused even when life is chaotic, untidy, and stressful.
There are various breathing exercises and meditation techniques all across the world to choose from. A few examples of these practices are given in the list below:

List of Meditation Techniques

Meditation and bringing focused awareness to your breath and thoughts at any given time (mindfulness) enables you to notice emotions as they develop and keep those that lead to poor decisions under control, such as rage and jealousy. Meditation assists you to be calm and focused even when life is chaotic, untidy, and stressful. Meditation may, and frequently does, result in change. As your meditation practice becomes more regular and pleasurable, you begin to pay more attention to your thoughts, recognise and let go of harmful habits and patterns, and find a more compelling and effective self.

Focus, patience, wise discernment, non-attachment – the skills you acquire in meditation and the skills you need to thrive in trading are one and the same.”

Yvan Byeajee

Once you have included Meditation in your daily life, you can focus on a few other tools that can be used to increase self-awareness, create new powerful habits for trading, and have a mindset to see through mass irrational behavior. Three such techniques are experience sampling, paper trading, and developing a contrarian mindset.

Let’s dive right in and explore these tools:

EXPERIENCE SAMPLING

In psychology, there’s a method called experience sampling.
You set an alert to go off at random times throughout the day and then write down everything you’re thinking, doing, and feeling when it goes off in a diary.
Experience sampling is an excellent method for identifying psychological patterns in your life which benefit you and those that hinder you. Often, the sample indicates that we devote an excessive amount of time and energy to trivial non-issues that have no bearing in the broader scheme of things.
Imagine extending the exercise so that whenever you find yourself getting caught up in worrying over a missed chance, beating yourself up over a
Losing trade, dissecting and reliving fights and differences with people, comparing ourselves to other’s petty concerns.
That is the moment where you perform deep breathing exercises or focus on your breath, or be remind yourself of the memories for which you are grateful, and eventually channel your attention towards an activity that will benefit you and others.
The most excellent method to deal with a destructive pattern is to make it into an ally rather than fighting it.
Once you have mastered Meditation and experience sampling techniques, what is required is to create new powerful habits focused on Trading efficiency. A couple of those habits that have stood the test of time and helped many new traders are Paper Trading and having a Contrarian mindset to spot mass irrational behavior.

Paper Trading

Paper trading has the benefit of allowing you to practice and drill certain areas of your performance until you have polished them, similar to how marines exercise specific actions repeatedly until they are automatic. The key is to develop instinctual reactions to the markets, which originate from your education and learnings of different trading methods.
As a result, in this kind of paper trading, the goal isn’t to make a paper profit as it is to master various components of the trading process and gain further expertise through regular exposure to the markets.

A Contrarian Mindset (Self-Awareness & Clarity of thought to spot mass irrational behaviour)

Our journey to understand mass irrationality starts with Lemmings.
Lemmings, according to urban legend, are little rodents with impulses that compel them to charge in large numbers down a cliff regularly,
resulting in their death.
In financial markets jargon, a lemming refers to an investor who is readily seduced by the irrationality of market price movement, which is prone to occur at extremes, and rushes in for fear of missing out on what they mistakenly feel is a great opportunity.

Our journey to understand mass irrationality starts with Lemmings.
Lemmings, according to urban legend, are little rodents with impulses that compel them to charge in large numbers down a cliff regularly,
resulting in their death.
In financial markets jargon, a lemming refers to an investor who is readily seduced by the irrationality of market price movement, which is prone to occur at extremes, and rushes in for fear of missing out on what they mistakenly feel is a great opportunity.
To avoid being a lemming investor, one must be able to think clearly and control their emotions.
In addition to the careful study required to place a trade, an intelligent investor may be able to notice lemming behaviour and consider exploiting it for profit by moving in a contrarian manner.
Conducting due research or thinking like a contrarian is a far better approach than submitting to a herd mentality, especially when the market appears to be seized by excessive excitement and euphoria.
Extreme optimism generally occurs during market peaks, whereas extreme pessimism occurs at market bottoms.
The obvious issue is that these market extremes can only be verified after they have occurred.
In other words, mindful and grounded traders know when to sell when prices are much higher than fundamentals dictate and when to purchase when prices are much lower than is fair value.
Investors are most influenced by current events, news, politics, profits. Furthermore, when a trend begins in one way, it tends to attract more and more investors. Projects specifically use targeted marketing to generate FOMO. They build communities, often consisting of fake users and trolls, to induce herd mentality.
There is an abundance of sensationalist financial, economic, and other news that bombards the sensibilities of investors. This proliferation of financial media inevitably affects investor psychology and gives birth to lemmings.

Conclusion

  • Meditation is a technique for reducing stress and gaining control over your responses to stressful events. Throughout the day, your concentration and focus are at an all-time high. 
  • Self-awareness is at the heart of making wise judgments in trading and life in general. You must be calm and have a clear mind to make those selections. 
  • You must also be able to maintain emotional distance from huge volatile swings in the markets. 
  • Your mind, like your body, requires a break from time to time. Meditation provides that rest, allowing you to be more peaceful, focused, and effective in trade, relationships, and everyday life.
  • A trader who controls his desires is grounded and has a trading system in place is not wavered by the feeling of missing out. 
  • A trader can become a contrarian and have a clarity of thought to follow his plan. A trader can take advantage of mass’s irrationality.
  • Paper trading and experience sampling are powerful habits that every trade should include in his trading journey.
  • In the end, it is “A state of Flow” that has to be achieved through these various techniques of Meditation and Powerful Habits. 

Happy trading !

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