Since the first year of this new millenium, every day, before I start trading (or anything for that matter), there is one thing I am always doing 1+ hour a day: Meditation.
During this roughly 5300 day period, I have been practicing meditation within a buddhist and yogic tradition. Working with a meditation teacher the entire time, as of this writing, I have logged well over 6,000 hours of meditation practice.
In 2001, I was certified as a meditation instructor, and in 2011, completed a one year meditation retreat, practicing several hours per day with very strict retreat parameters.
Now even though my meditation practice has ‘evolved’, moving through a progression, there has been one practice I’ve worked with since day 1, along with another since 2004. Based upon my teacher’s recommendations, my practice may add in other elements, but these two have been fixtures for over a decade.
Ok, enough of the resume, let’s move forward.
From Trading Psychology to Neuroscience
If you search through the trading psychology literature, there is definitely an abundance of johnny-come-late-to-the-party trading psychologists embracing the practice of meditation.
I don’t think it’s ironic this has happened now that Neuroscience has well documented meditation as being beneficial for the brain, body and mind.
Although I think it’s a good thing they are promoting meditation as a beneficial practice for trading (+ your mindset and mental health), most don’t have a real working experience of it, so are only talking about it ‘conceptually‘ or ‘intellectually‘. This isn’t any real benefit to you, other than getting you to start.
Sharing A Practice
With that being said, although I’ve been talking about meditation as a practice to improve your trading/mental performance for years now (since 2011 when my blog really started), I will be sharing a formal meditation practice for trading that I have thousands of hours experience with.
If you end up not doing this particular practice, but choose another, here are two quick recommendations:
Make sure whichever practice you choose is from a meditation instructor. This has the benefit of someone guiding you from a real working experience of the practice, along with them sharing the pitfalls, challenges, obstacles, and things to work with as you progress along.
Ideally, this person can give you continual feedback on your practice. Why is that?
Well, if you think about it, ‘you’ doing a meditation practice on your own, with no guidance, is really ‘you’ just getting more of ‘you’ now isn’t it? It’s your thinking that’s doing the analysis on your progress and giving you feedback. That is simply you never leaving you, your mind and conditioned beliefs.
If that was sufficient by itself, it would have worked for you in trading, but it hasn’t, and the same goes for meditation.
As an FYI, you can’t intellectually learn about meditation as a way to become good at meditation. You have to do the practice. No amount of books you read on it will do the work for you.
That is the great thing about meditation (and buddhism for that matter). IQ is (for the most part) meaningless in the face of building up a good meditation practice. You could have a super high IQ, or spend a hundred years reading about meditation. None of that will advance you in your meditation practice.
It requires you to sit in a seat with your arse and do the work. There is no way around it.
Not fully practicing is akin to being thirsty, yet only hearing or seeing water. You cannot quell your thirst if you don’t drink it.
It should be stated, there is no pill you can take that creates some instant solution to meditation. It is up to us to do the practice. You have to have a direct experience of it. Although there are things we can do which are a spring board to our meditation practice, there is no pill form available.
Meditation demands self-existent experience.
Meditation for Trading
Now that I’ve given a very charming commercial about how easy meditation is, let’s begin by describing a practice you can do for trading.
A Disclaimer: This practice wasn’t built for trading. It was created thousands of years ago. I’ve done dozens of types of meditation practices within my tradition, but there are a few I have worked with great intensity and regularity. It is one of these practices I’ll be sharing with you in a secular way, and one that I find is an incredible fit for trading and improving your trading performance.
This practice is called ‘Shamatha’, and can be translated as ‘Calm Abiding‘. There are many stages of the shamatha practice one can go through as they progress, but I will be starting you with ground zero.
There are many benefits to working with this practice which I’ll continually sprinkle throughout this article, but a few of them are below;
Generating Insight Beyond Intelligence
Cultivating A Calmer Mind
Reducing the ‘Noise’ of the Mind
Becoming Less Affected By Emotions While Increasing Emotional Intelligence
Increased Pattern Recognition and more…
I could go on for the next…say…2-3 years talking about the benefits, but this should be intriguing enough for now. Onto the practice.
Posture For A Chair
The posture you take for the practice will have a direct effect upon your body, mind and energy. For those who have any back issues, or a decent amount of physical pain, I’d recommend sitting in a chair. Ideally the chair has a straight back and is comfortable for you to sit in a decent amount of time.
While you are sitting, your back should be straight, chin parallel to the floor, palms resting in your lap (face down). If you’d like, you can take a ‘mudra’ (means ‘seal’ in Sanskrit) with the hands, using the tip of the index finger and thumb tips touching (again palms facing down).
Your knees should be shoulder width apart (or slightly less) with your heels 90 degrees straight below your knees. Feet should be flat and toes pointing forward.
Posture For A Cushion
For those with a little more flexibility, you can use a firm cushion, pillow, or get yourself a ‘zafu’, which is a meditation cushion (and what I personally use). The posture with the spine and chin will be the same, along with the hand position. The only differences will be with your legs. For this, I’d recommend sitting in a ‘cross-legged’ position.
The black round cushion they are sitting on is the ‘zafu’, and they are using a meditation mat which can make the sitting posture more comfortable than a hard floor. Their right leg is in front of the left, which is how I practice. I do not recommend stacking one ankle on top of the other (as in half-lotus or lotus position) unless you have a great amount of flexibility, and its easy to do without any effort.
Regardless, the hand position is the same in the first picture. So now you have the basic meditation posture.
NOTE: If you are sitting on a cushion, and your knees are not resting flat on the ground (like the picture), put some cushions under them. This prevents you from contracting/tensing muscles to hold your legs up, and allows you to sit more comfortably.
For this practice, I’d recommend deep breathing, but only in and out the nose. This type of breath naturally calms the mind, slows the breath down, and relaxes the central nervous system. All of this supports the mind to engage the meditation practice more easily.
While our eyes are open, the gaze is relaxed, so not too tight, not too loose. Your charts should be closed, phone off, and ideally you are in a distraction free environment (as best you can). If you can pick a small point on the floor to hold your eyes, that is great. Another option is a point on the wall, just below eye level. They should be non-descript, so as to not activate any additional mental activity.
For this practice, you’ll focus on the breath coming in and out of the body. If you want to make it a little more challenging, you can count the breath from 1 to 21, and back. If at any point in time, you lose the count, or get distracted, just say to yourself (internally) ‘letting go’. Once you’ve said this, return back to the breath and start over with the count.
If anyone makes it from 1 to 21 and back without saying ‘letting go’ once, I’d be shocked, shocked. Roughly 99.99999% of all people who attempt this (give or take a .00001%), will not make the full count without interruption. Not a good promo, I know, but you are traders and like a challenge ;-).
If you want a real ‘guestimate‘ and note of inspiration, I’d say for every 100 that try this practice, ~5-7% will take it on regularly. Of those, maybe 5-10% will stick with it over a very long period of time. And of those, maybe 5% will progress through and complete the shamatha practice.
If you wanted a mountain to climb, I just gave you one.
As to how long should you do this practice, I’d recommend 10 minutes to be more than sufficient. If you decide to take it on regularly, then pick a fixed time of the day to do it. Best suggestions are in the morning (before you start your work/trading day), or in the evening, about 30 minutes before bed.
Both are great, but from my personal experience, the best between the two is first thing in the morning as it sets the tone and mental energy for the day, infusing everything you do with a state of mindfulness and clarity.
If you can do it 3x a week, that would be the minimum suggestion. 4-5x per week is even better, and 7 days a week is fantastic. The key is not to stretch yourself too hard. Do what is workable and a pace you can maintain consistently. Commitment is key, but the benefits are worth every bit of it.
The Fruits of Practicing Meditation
Although wanting to increase one’s mental health ‘should’ be something we all aspire to (IMO), it helps to know some of the benefits and fruits that come with practicing meditation consistently.
I could mention all the things science says you’ll get from meditation, but that’s been done and dusted. Instead, I’ll communicate from my direct experience what you can create, build and experience from a steady, consistent and well developed meditation practice. So here goes:
A mind freed from the conditioned thoughts and disturbing emotions, becomes naturally clear, creative and joyful. Your IQ & pattern recognition will likely increase, and you’ll start to possess a penetrating insight (that goes beyond intelligence and knowledge).
Through meditation practice, the world becomes a book of knowledge, communicating to you and awakening your natural intelligence. It is as if the world you experience will start to change before your eyes.
Your day to day experience will be like a pen which inscribes clarity, awareness and insight into your mind as a living communication.
Eventually, the results will start to change your body, speech and mind, eventually penetrating all aspects of your performance (in trading) and life for the better. Mind will start to work for you, not against you (in trading and life).
You will start to mirror things more as they are, not as a conditioned mind which sees things in a limited way.
Accomplishment, spaciousness, equality, discriminating wisdom and transformation will become a currency available to you, growing stronger as you progress.
So if that is not a docket of reasons to practice, then I don’t know what is. There is some mental sweat required, but if you got some chutzpah, you’ll take this on and see it through.
Now you should have a good base of knowledge about meditation and why it can be a game changer for your trading performance and mindset.
You also have a very simple practice that you can engage on your own, with how to sit, posture, focus and breathe. Although I’ve shared ‘some’ of the fruits from practicing, the enrichment it can provide every aspect of your life is invaluable, and the highest profit trade you could ever make.
For those that are interested in taking things to the next level, I am creating a 12-lesson meditation series (specifically for trading), launching in a matter of days.
In the meantime, give this practice a go, and please do comment/share your experience, and of course feel free to ask any questions.
I sincerely hope you take this practice on, and receive every benefit possible, including turning the corner to successful trading, and building a successful traders mindset.
Trading Foreign Exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advisce from an independent financial advisor if you have any doubts.