Have you ever heard someone comment on another person’s behavior by saying that they have a big ego? What does it mean? Generally speaking when someone is saddled with this label it means that the individual is perceived as conceited, self-centered, perfectionistic, having to always be right, having difficulty accepting criticism, self-absorbed or arrogant. Of course they may exhibit all or none of these negative traits, but more than likely they may have an inflated opinion of themselves that gets between them and healthy relationships; one of which being their relationship with the market as they trade. The person in question may be a good guy overall, it’s just that they may be so caught up in self-protection (defense mechanisms that thwart an honest interaction with the environment) or self-promotion (inflated notions of one’s importance over others) that they become distracted and begin to distort data. Often, the individual that suffers from ego inflation issues also has a part of themselves that is not only aware that there are issues, but actually attempts to override the self-sabotaging behavior that develops as an outcome of self-defeating emotions like anger, fear, anxiety, stubbornness and impatience. It’s tantamount to having different parts of yourself show up in challenging situations that make mindful execution of the trade all but impossible causing impulsive entries, chasing trades, moving stops and other unwanted rule violations.

You don’t have to be mentally ill to have different personalities reside in your body? Actually, it is quite normal to have various “parts” of yourself emerge at different times depending on what is going on at the moment. If fact, these parts of the self speak different languages and see different things as well; which is why you may wondered how you made a glaring mistake after becoming seduced by your illusions of what the charts were really showing in the wake of a loss. This kind of personal and emotional volatility can wreck your trading account. Similar to the market, personal volatility is a direct reflection of the emerging emotions of the masses as they trade furiously, impulsively, compulsively and at times capriciously. The market is continually sending messages; messages about volume, momentum, and volatility. But, those messages are best captured by first attending to your own volatility so that you can see the charts as they are. In a subsequent blog I’ll outline the main points of how this works so that you can hone your focus to a laser precision on what matters most in your trading and in your life.

Being in the moment for the moment means that you are not only focused on the task at hand, but you are intentional about that focus being for that moment only. Fully available means that you are deliberately and intentionally activating and accessing your internal resources, (like pattern recognition, detail orientation, data tracking, emotional calmness, and confidence to name a few); so that you are availing all that is useful and appropriate in your arsenal of tools and techniques to bear on the task at hand.   Fully present means that you are undeterred by what happened a few moments, minutes, hours or weeks ago; and undeterred by what might happen in the next few moments, minutes, hours or weeks in the future; you are not invested in the outcome beyond what is related to the task at hand. If you are emotionally invested in the outcome, that means that you are diffusing your focus and rather than all of your attention going to what you are doing, it is partitioned with only a percentage going to where it is most needed.   Look at it this way, when you are executing a trade, if you are simultaneously thinking and hoping that you will make a profit, you are investing a part of your consciousness (awareness) on the outcome, which by definition means that you have less of your internal resources available for the undertaking – the “what matters most” of that trade.

Being in the “now” is also involved with your capacity to be aligned. Alignment is critical as well. If you are operating at odds with yourself and it is very easy to do; you have compromised your ability to be fully available. Just think of the many times per day that you are indecisive, conflicted, and otherwise torn about a set-up, a strategy, a price pattern or what a trading tool might actually be indicating. At these times your attention is partitioned and your ability to focus is diffused and fuzzy. Are you at your best? No, you are working against yourself. Being aligned, where you are congruent in body, mind and emotions, creates the capability to move as one, going in the same direction and for the same goals. When this happens, your values, beliefs, emotions and internal conversations are about one thing, that is, the effective negotiation of the trade. Consider how trading is like riding a bicycle. A bicycle wheel has spokes that emanate from the hub, and they are all aligned and balanced in their tightness. If you pop a spoke, then the balance of those remaining spokes is thrown off causing the wheel to become “untrue.” If the wheel is untrue, then it becomes wobbly and is no longer straight. The main problem with a wheel that is wobbly – besides being inefficient – is that it rubs against the brakes. Forward motion becomes very difficult when that happens. If you are out of alignment, you are often rubbing and working against yourself becoming erratic, illogical and conflicted. This condition will play havoc with your results and at the very least slow you down considerably.

So, the importance of being “in the now” cannot be overstated. You’ll want to cultivate your ability to stay focused on the moment by noticing where your attention is at any particular time. If you do this consistently, you will become more and more self-aware. You are then in a position to be more deliberate about where you put your attention and for what purpose. Over time you will be better able to proceed in your trades fully by design rather than by default.

Bringing your “A” game to your trading platform and ensuring that you are “in the now” of the trade is crucial to getting the results that you want. You’ve got to be able to focus with intention and attention to decrease the pain associated with being out of control. There is great value in being aligned, centered and grounded in order to optimize all of your system’s resources toward seeing reality for what it is, being on the right side of the order flow, and dancing with the price action by following its lead. Among the many ways that help you with alignment, centeredness and being grounded, few are as powerful as “mindful” meditation. Over the years, the usefulness of mindful meditation has been scientifically documented in hundreds of studies with regard to physiological, mental, emotional and behavioral benefits. Some of those benefits include:

• Sharpening attention

By reducing the amount of internal conflicting dialogue the individual is supported in the ability to focus more intently on the trade or investment at hand

• Lowering heart rate

While trading it is very easy to become overly excited and experience a racing heart, consistent meditation relaxes the overall system and helps the trader and investor to track incoming data with greater clarity

• Lowering stress

Stress levels become elevated when trading and investing due to hard earned capital at risk, meditation eases stress levels and helps the individual navigate through complexities of the market

• Easing anxiety

For many traders just opening their platform increases anxiety…about being wrong, making mistakes and losing money. Meditation helps the trader/investor to align body, mind and emotions to go in the same direction and for the same goals thereby reducing internal turmoil and conflict.

• Increasing patience

Meditation helps the trader/investor to appreciate the moment and develop the capacity for waiting, which is a mainstay of successful trading.

• Inducing calm

Through the process of sitting still and focusing on breathing, mindful meditation calms the body and the mind which expands the trader’s ability to reduce distorted judgement and better deal with distracting negative emotions and thoughts.

• Reducing susceptibility to fear and greed

Successful trading/investing stems in part from the effective management of fear and greed, two of the most disruptive emotions to the process. Meditation helps one to maintain a grounded and centered perspective that puts distance between these emotions and the task at hand.  

One of the most common rule violations that novices and some experienced traders make is inappropriately moving a hard stop when the price-action is inching toward it. The first signal that you normally become aware of is an emotion that is other than positive or neutral; such as in this instance fear or anxiety as you watch the price-action. That emotional signal is not the first thing that happens however. The first response is an internal dialogue that for the most part is out of your awareness, which is why you must attend to the emotional signal as the first stimulus that comes to your attention. When the fear/anxiety is felt immediately “stop” what you are doing in order to interrupt the emerging pattern, which would culminate in moving the hard-stop, increasing your risk and in most cases ends in a greater loss than you would have experienced had you maintained the hard-stop. By stopping you take a deep breath which will initiate a relaxation response; then change your physical posture and assume a position of power, for example, standing up straight and unclenching fists or teeth. By doing this you are not only interrupting the emerging bad pattern, you are also exchanging a forthright intention for what a moment ago was frustration, frazzlement and fragmentation. Then you “challenge” yourself by asking 3 important questions:

1) What must I be thinking or believing to feel this fear or anxiety? The answer in this instance might be, “…That price-action is going to hit my hard-stop and that means I’ll lose, and that means I’m a poor trader, and that means I’m stupid…” You get the picture. 2) What is the objective reality? In this example the reality is that the price-action may or may not hit your hard-stop; and in actuality it doesn’t matter because your initial plan calculated the best hard-stop placement according to the risk assessment. 3) Is there an alternative interpretation?
After asking the three questions then it’s time to “choose” a response that is in keeping with your highest and best goals for the trade and that would be in this instance to be patient and allow the process to play itself out. You’ll not only maintain your A-Game at the platform, you will have gathered more mechanical and internal data; and trading is all about the data.

Stop, Challenge and Choose is a simple and highly effective “edge” for interrupting emerging bad patterns and placing yourself in a position to not only follow rules and keep commitments, but to maintain a position of increasing your skill levels. Additionally, it works quite well with your journal to memorialize the process in order to track the instances of emotional turmoil so that you can identify the bad patterns of thinking, feeling a doing as they take place. In this way you are poised to anticipate the occurrence and become proactive and pre-emptive in the process thereby greatly enhancing your ability to sustain your highest and best trader at the platform.

In any important effort where you are up against other individuals that are as motivated, as intelligent, as competent and as prepared if not better than you, then it is crucial that you identify an edge in your game in order to come out ahead of the pack and get the win. Trading is a good example of this due to the solitary nature of the game. You are in there alone in most cases and ultimately the only person that you can rely upon is you when the ride gets bumpy.

By having and using an edge you are employing an approach, a strategy, a belief, a mindset, or a tool that will support you in bringing your absolute best to the platform and keeping it there. Surely you have experienced times where you found yourself at a crossroads in a trade; a fork-in-the-road where you had to make a choice to either go to the left and violate your rules, break your promises to yourself and go over the cliff to crash and burn; or, you chose to go to the right, kept your highest and best trader engaged while trading in your highest and best interests. When you do-the-right-thing in such an instance, you not only support your ability to follow-through more consistently; but, as well, you have cataloged a peak experience that has the effect of catapulting you forward, bolstering your confidence and strengthening your self-esteem. This edge is usually in the form of a mental or emotional tool. Stop, Challenge and Choose is one such tool or edge that aids you in remaining focused intently on what-matters-most in the trade by interrupting disruptive patters of thinking, feeling and doing that can and do cause you to take the left turn at the fork in the road resulting in catastrophic results. In a subsequent blog I’ll outline the main points of how this works so that you can hone your focus to a laser presision on what matters most in your trading and in your life.