Trading Psychology: Mindfulness In Trading
Mindfulness is an ancient mental discipline that arose in the yogic traditions in India and China thousands of years ago. It is a simple presence of mind that can be a bit elusive to maintain because it is so exquisitely focused on the here and now.
Interestingly, its benefits for stress reduction, concentration, self-awareness and productivity have been validated by modern research. No wonder health-conscious corporations like Google provide mindfulness training for their employees, but its appeal is not limited to Millennials.
You will find mindfulness programs at Goldman Sachs, Blackrock and Bank of America because it improves the quality of decisions. The military has discovered that mindfulness training helps soldiers adapt and concentrate in new situations and recover more quickly from stress.
In trading, mindfulness can help immunize us against our own irrationality. Not only is the market unpredictable, but so is our own mind. Opinions pop up like weeds and masquerade as truths. Snap judgments and impulsive behaviors seem to arise out of nowhere. Negative self-talk can follow automatically when we struggle with a trading issue… and that only makes things worse.
Mindfulness can help reduce mental chatter and rigid opinions so that you can perceive the market more objectively. I believe the more objective we are, the better we can respond to the shifting market tides. And self-awareness reduces the chances that we will go off the rails when a trade heads south.