Traders Can Get “In The Zone,” Too

This is a tran­script of an inter­view I did recently with Tim Bourquin of Traders Interviews.

My guest today is Dr. Gary Day­ton. He’s here to talk to us about “mind­ful­ness” and how that can help us as traders to make bet­ter deci­sions in the mar­ket. Dr. Day­ton, first of all, what is mindfulness?

Well, Tim, mind­ful­ness is a qual­ity of atten­tion. It’s pay­ing atten­tion on pur­pose in the present moment with­out judgment.

We typ­i­cally are fre­quent fly­ers into the past or off to the future, and we tend to eval­u­ate every­thing that comes into our aware­ness as either good or bad; “Do I like this, do I not like this?” Those are con­di­tioned ways of think­ing, or habit­ual ways of think­ing, that are not nec­es­sar­ily help­ful to the trader.

Mind­ful­ness does a num­ber of pos­i­tive things, and in fact, the recent research is show­ing that it is actu­ally alter­ing brain struc­ture in ways that can be very use­ful for the trader.

Prac­tic­ing mind­ful­ness just 30 min­utes a day over a cou­ple of months will affect the cen­ters of mem­ory and learn­ing, the emo­tional reg­u­la­tion cen­ters of the brain, even things like per­spec­tive tak­ing, all of which are impor­tant to traders and are pos­i­tively influ­enced by mindfulness.

The prac­tice of mind­ful­ness can also help us to increase our focus and our con­cen­tra­tion. Ath­letes often refer to this as being “in the zone.” It’s a qual­ity of con­scious­ness where time seems to slow down, dis­tract­ing thoughts and feel­ings fall to the way­side, the com­plex pat­terns of the mar­ket become clearer, trad­ing cues become clearer, and our entries and our exits become sharper, all by mind­ful practice.

How do I actu­ally put that into prac­tice on a daily basis? What am I actu­ally doing each day? Is it 30 min­utes before the mar­ket opens?

That’s a help­ful thing to prac­tice mind­ful­ness for­mally, but you can do it infor­mally as well.

When prac­tic­ing mind­ful­ness infor­mally, just notice when your mind wan­ders.  For exam­ple, if you are talk­ing with some­body and they are speak­ing, notice how much your mind gets dis­tracted from what they are say­ing.  We all have this expe­ri­ence where we’re for­mu­lat­ing our answer before the other per­son is even fin­ished talk­ing. Notice that. Pause, refo­cus on the task at hand, which is talk­ing to the other per­son, lis­ten­ing and being atten­tive to them.

Set aside an hour a day dur­ing your nor­mal course of activ­i­ties and be mind­ful.  Dur­ing this hour, your goal is to notice each time your mind wan­ders, becomes dis­tracted, and you get lost in thought.  If you have never done this before, I guar­an­tee you will be aston­ished at how eas­ily dis­tracted you become.

More for­mally, you can sit for five min­utes to start in a quiet area.  The task is to watch your breath.  Place your atten­tion fully on the breath as it comes in and as it goes out.  Keep your atten­tion on your breath.  Notice when your mind starts to wander…and it will, fre­quently. It’s what the mind does, and that’s per­fectly nor­mal. The goal of mind­ful­ness is to become aware of when your mind becomes dis­tracted, and then gen­tly bring the mind back to the task at hand, which in watch­ing the breath is the breath.

So it sounds like this is all about stay­ing focused on the charts and the mar­kets while the mar­ket is open and try­ing to keep those thoughts about what’s going to hap­pen after the mar­ket closes or what’s been going on in our lives out­side of that so that we can actu­ally make bet­ter decisions.

Exactly.  You know, trad­ing is stress­ful. We’re deal­ing with risk and uncer­tainty and the fear­ful feel­ings that we have and the fear­ful thoughts that arise cause stress and that’s uncom­fort­able. So nat­u­rally, We want to get rid of those stress­ful thoughts and feel­ings.  But it is that desire to escape the feel­ings that tends to shift our focus away from the mar­ket and onto our fear­ful thoughts and emo­tions.  It’s a para­dox: the more we don’t want fear and stress, the more we have it and the worse it becomes.

Prac­tic­ing mind­ful­ness helps us step out­side of our thoughts and feel­ings and see them for exactly what they are: tem­po­rary thoughts and feel­ings that soon go away, noth­ing more.  Hav­ing even very fear­ful thoughts when mind­ful allows us to have those thoughts and feel­ings know­ing that they are pass­ing men­tal events and allows us to focus on the mar­ket and trade from our core, not from what’s going on in the mind.

And mind­ful­ness is a skill, and so it takes prac­tice.  We can’t just do it once or twice and be expert at it.  Any worth­while skill requires effort, and this is very true of men­tal skills like mindfulness.