Eight Weeks To More Mindful Trading

bruce.bowerBruce Bower, General Comments, Health and Trading, Trader Development, Trading Ideas, Trading Lesson, Trading PsychologyLeave a Comment

The topic of mindfulness has exploded in popularity in the broader public. Meditation and meditative activities like yoga are seemingly everywhere, building on the runaway success of books like Eckhart Tolle’s The Power of Now. This whole interest in mindfulness has only just started to filter through into the world of investing and trading, where I think that it can make a substantial difference.

At its core, mindfulness is about paying attention better—to your surroundings, to your thoughts and emotions and to the markets. There are numerous books on how to cultivate better awareness, by training our observational skills and working on our breathing. Furthermore, we know that it works. The benefits of mindfulness are well-known and well-documented. Mindfulness training has been shown to deliver a host of benefits in many different environments and workplaces.

In general, mindfulness works. If anything, it should be even more helpful for market participants. Given that investing and trading are primarily mental and about good decision-making, we can potentially see a big boost in our performance if we practice mindfulness properly. But what does mindfulness look like in a trading context? How do we practice it?

Dr. Steenbarger put together a good review of the literature on mindfulness. There have been several good books that have come out recently, focused on mindfulness for traders and investors. Two particularly good ones are Trader Mind by Steve Ward and Trade Mindfully by Gary Dayton.  Both take the existing literature and best practices on mindfulness and put it into a framework that is useable by investors and traders. These books are good roadmaps for anyone who wants to cultivate greater awareness and detachment in their trading.  Steve Ward summarizes what mindfulness looks like as “trading in the moment, paying attention to what the market is doing right now and the environment around you, being aware of your own thoughts, emotions, physical sensations and any impulses or tendencies to act”.

This is what we are shooting for. How do we get there?

I am a friend of Steve Ward and a big fan of his work, especially his previous article on mindfulness. His company, High Performance Global, has worked with organizations across the world on how to increase awareness and mindfulness. He is an expert on the topic and he can help you increase mindfulness with just a few minutes’ work each day.

His recent book featured an 8-week program on boosting mindfulness for traders. The goal is to make you a much calmer, more aware trader by the end of the eight weeks, no matter what your starting point is. The 8 weeks start with a self-inventory, where you evaluate your current level of mindfulness. From there, you undertake a series of exercises designed to boost your awareness and mindfulness with regards to yourself and the markets.

Starting with this post, I am going to follow this program over the next eight weeks on my blog. I will let you all know what exercises I am doing, how I am practicing awareness and what kind of progress I am making. We’ll start with the self-inventory.

My score was 45—an average of three per question, or not very mindful. Obviously, I have a lot of room for improvement!

The Week 1 program is entitled “Attention, Awareness and Automatic Pilot”. It’s basically designed to snap you out of any automatic pilot stuff that you may be on. It’s quite easy to start doing something and then realize 20 minutes later that you’ve just totally spaced out and been operating mindlessly, without giving real consideration or attention to the task at hand. This week teaches us to direct and manage our attention. It consists of:

  • Re-reading Chapter 3 and doing the exercises. This chapter is mostly concerned with attention and self-awareness. The only exercise is Mindfulness of Breathing, where you use your breathing to practice awareness.
  • Practicing the Mindfulness of Breathing 5 times per week
  • Mindful minute: Focusing attention just on your breathing for a minute at a time, several times per day
  • Habit Releaser: Bring moment-to-moment awareness into one habit that could otherwise be mindless, such as brushing your teeth or eating breakfast.

I did all of these during the week. The first, the mindful minute, I actually found quite easy. One of my hobbies is taking photographs, where you have to become completely aware of your surroundings, so I am actually able to disconnect for a minute. The only difference is that I was able to block out my surroundings and to focus completely on my breathing instead. Just one minute is fine. I could do that. As a matter of fact, I welcomed the chance to zone out just for a minute during a hectic day. It was the pause that refreshed. If you are just starting mindfulness training or merely trying to gather your thoughts during a hectic day, I would encourage you to get the hang of this exercise first.

The Mindfulness of Breathing exercise sounds simple—focus only on some part of your breathing for 3-5 minutes. That could be the rhythm of your breath, the feeling of air around your nostrils, etc. If any other thoughts intervene—and they will—then try to bring your focus back on to this part of your breathing. For some reason, I found this much more difficult. It requires you to be more concentrated, because you are blocking out everything except for one specific part of your breathing, and for five minutes. First of all, I found it quite difficult to narrow my focus down just to the feeling of air on my nostrils. I wanted to distance myself a bit and just kind of zone out, rather than actively paying attention. Secondly, I was constantly struggling with distractions or other thoughts that were intruding on my quiet time. When I say constantly, I mean every few seconds. The first time I did it, I had my eyes closed and thought that I had completed five minutes, because it had seemed interminable. Instead, I found out that I had only done 60 seconds! This exercise seems simple but it may surprise you with how difficult it is!

The habit breaker was surprising as well. Usually I am rushing through my automatic behaviors like brushing my teeth or taking the train. Stopping and experiencing them seemed like driving in reverse—trying intentionally to go slower, rather than faster. It was very, very strange. But it changed the experience for me. For the first time, I felt a genuine appreciation for brushing my teeth, and I actually noticed what I was doing. It was kind of like waking up in the middle of a dream.

I’m not sure where this will take me, but for now, I am committed to doing another seven weeks of Steve Ward’s Mindfulness Program.

No relevant positions


By Bruce Bower | E-mail: Bruce [at] howoftrading.com

Blog: www.howoftrading.com | Twitter: @HowOfTrading

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