What would happen if you could just pay attention to what the market is doing right now? You’d be totally in the present with no preconceived ideas or biases to influence you. If you did that, your trading would probably accelerate to a new level. Well, you can trade that way if you practice mindfulness.

Mindfulness first came to my attention as a form of meditation in which you simply quiet your mind and then “watch your thoughts” as they come up. When a thought pops into your mind, you simply notice that it is there and then you release it. That’s all there is to the meditation, but it can have a profound impact on your life if you do it regularly.

Mindfulness is also a state of being. Harvard psychologist, Ellen Langer, has popularized the term through two books—Mindfulness and The Power of Mindful Learning. She defines mindfulness as a state of being in which one is likely to be: 1) creating new categories, 2) welcoming new information, 3) looking at things from more than one perspective, 4) controlling the context, and 5) putting the process before the outcome.

Each of these aspects of mindfulness could be an entire peak performance tip. I’d like to cover the first three categories about mindfulness in today’s tip and then continue the topic next week.

1) Creating New Categories

Mindfulness is the opposite of mindlessness. Mindlessness means living by your conditioning. It means assuming that all of your beliefs are fixed and true, so that all you can do is find evidence to support that truth. Mindfulness, in contrast, is the continual creation of new concepts and categories with no real attachment to their truth.

For example, think about your last day of trading—what was it like? You might say, “I put on some long trades and some short ones. I also closed out some trades—some at a profit and some at a loss. In between, I watched the market.”

Even if I offered you money for everything you could list that you did yesterday with respect to trading—you still probably couldn’t come up with much more than what I just listed. Yet, you did so much more. You probably experienced a thousand different emotions, which you’ve forgotten. You probably read 100 or 1,000 news items. You probably talked on the phone to some people. You probably did some of the 10 tasks of trading (if you know what they are). But unless I mention those things to you, you probably wouldn’t even think of them.

Most strong opinions rest upon global categorization. The market went up yesterday. We’re in a c-wave of an ABC correction. I lost money yesterday. I followed my system yesterday. We’re in an up move in a secular bear market. I should pay attention to what is going on now in the market. All those statements are global categories that you probably use to form your opinions. But what if you formed new categories of thought about the market? Think about the market in great detail. Who are the different players? What do you think each of them is doing with respect to the market? Call people you know and notice their reactions and their perspectives. Break old thinking patterns by creating new categories and you’ll step up your trading as well.

In many ways, this aspect of mindfulness is a lot like reframing as discussed in my Peak Performance Course for Investors and Traders. It gives you a new perspective and a new attitude about trading

2) Welcoming New Information

New information is continually impinging upon all living creatures, and their ability to survive generally depends upon their openness to that information. Research has shown that people undergo temporary psychological damage if they are deprived of new information for any length of time. Young animals, if deprived on sensory input, become severely impaired later in life. You need sensory information to stimulate you.

Most people are continually exposed to new information, so the lack of it is not a problem. However, most of us tend to filter, generalize, distort, or delete most of that information. Becoming more receptive to the information that is coming in to you is a major step toward improving your performance as a trader.

3) Looking at Things from Multiple Perspectives

There are at least three general “positions” or “perspectives” from which any information can be viewed. The first perspective is the “I” position—how does this information affect me?

The second perspective, position two, is how does it affect another person directly—what is that person’s perspective? That second position might be that of the person who takes the opposite side of your trade or perhaps the person who is making the market for you. Looking at new information from that person’s perspective might be quite valuable to do.

The third perspective is that of the neutral observer who is watching all of the other participants. This is like someone out in space who can see what everyone else is doing and then view everything from a global perspective.

These three perspectives were crucial in Einstein’s thinking processes. It was part of how Einstein’s formed his great ideas about relativity. Those perspectives are also the basis for some of the most powerful change work that I know about. So try them on. Of course, there are many possible players for positions one and two. You can try on numerous possibilities and gain tremendous insights as a result of doing so. You’ll gain choice in how to respond, empathy for other people, and the ability to change your own behavior much easier.

Remember that most people have perfectly “good” reasons for behavior that you might consider to be negative. The intentions behind those behaviors are “good.” If you close out a trade early, are you “nervous” or are you “cautious?” If you fail to take a trade, is it because you are “afraid” or because you haven’t totally developed and tested your plan for trading? Typically, the behaviors that you most want to change are the mirror images of the qualities you value most. Thus, if you are having trouble “pulling the trigger,” you probably value a thoroughly tested plan and don’t really have one.