What is Mindfulness?
Mindfulness is defined by one of the world's leading mindfulness researchers and practitioners, Jon Kabat-Zinn of the University of Massachusetts Medical School, as āA way of paying attention: on purpose, in the present moment and non-judgementally to whatever arises in the field of your experienceā.1 Michael Chaskalson, in his book The Mindful Workplace,2 defines it as āA way of paying attention in the present moment, to yourself, others and the world around youā. In a very simple way, it is noticing what's happening, while it's happening. Mindfulness is a way of connecting to your present moment experience in an accepting way.
In trading, these definitions might translate behaviourally as trading in the moment, paying attention to what the market is doing right now and the environment around you, being aware of your own thoughts, emotions, physical sensations and any impulses or tendencies to act. You would be fully present and more aware of preconceived ideas or biases that could influence you, and you would probably be experiencing lower levels of anxiety as a result. You would be attentive and aware, responsive and engaged.
Mindfulness is the opposite of mindlessness, which can be defined as living on autopilot, governed by your past conditioning of thoughts, beliefs, emotional responses and behaviour. Whilst much of the time this process can be healthy and performance enhancing, within all of your automatic experiences there may also lie patterns of thinking, feeling and doing that are detrimental to your trading performance, ones that have been learnt in the past but are no longer useful.
The cultivation of mindfulness develops your ability to be present, to be aware of what is going on within you and around you, to notice the stream of moment-to-moment change and to develop greater choice, to act on purpose as opposed to being reactionary and dominated by mindless habits, patterns and reactivity.
Importantly, mindfulness is a skill ā it can be learnt and developed. We all have an inherent ability to be mindful; however, with the ever-increasing pace of change in the world, the amount of instant stimulation and the level of information overload that our brains get exposed to, sometimes being mindful ā whilst so simple in nature ā can be extraordinarily difficult. Consider the requirements of the trading environment and its demands on your attention at any given time: prices flickering, P&L numbers moving, graphs and charts changing, news flowing from screens, squawks and televisions, the noise from other traders around you, phones, mobile phones, instant messengerā¦ the list could go on, and the effect is that being able to be fully present, attending to the here and now, is, for many people, becoming more and more difficult.
The practice of mindfulness encompasses focusing your attention on your experience of thoughts, emotions, feelings and body sensations as they arise and pass, from moment to moment.
The Contact Points practice below is a great way to experience mindfulness.
Practice: Contact Points
- Find a comfortable, upright sitting position with your feet flat on the floor and your back slightly away from the back of the chair.
- You may choose to close your eyes or you may wish to keep them open, in which case, lower your gaze towards the floor.
- Focus your attention on to a physical sensation, the sensation of your body pressing down in contact with your chair, or the sensations in your feet as they contact the floor. Notice where the sensations are strongest, the feeling of sitting on the chair, or the contact of feet on the floor, and allow your attention to rest there.
- After a while you may find that your mind wanders. When you notice this, simply acknowledge where it has wandered to and bring your attention back to the contact point without judging or being critical. Minds wander, it is what they do.
- After a minute or two, let your eyes open and return your focus back to the room.
What was your experience like? Many people find that even in just a short time their mind wanders a number of times, to a number of different places, and often quite shortly after they begin.
This is probably a good point at which to switch our focus onto what mindfulness isn't. Despite all the potential benefits and upside to developing mindfulness skills to enhance your trading performance, there are still some people who remain a little wary of the idea, particularly when they think of it alongside the word āmeditationā. Here are some key points drawn from Mark Williams and Danny Penman's book Mindfulness: A Practical Guide to Finding Peace in a Frantic World:3
- Mindfulness is secular, and is not a religion. It is simply a form of mental training. To help frame it as such, the US Marines have named their mindfulness-based programme āMind Fitnessā, as has a colleague of mine who delivers his programme in prisons, and as have I in my work with traders.
- Mindfulness practice is not a āsoftā approach to mental training and will not deaden your mind or prevent you from striving towards achieving your trading goals. It will actually do the opposite, by training your mind, making it sharper and more effective and giving you a greater chance of achieving your goals.
- Mindfulness practice can be done seated, on buses or the train, while walking, and does not require any specific kind of clothing. You do not need to sit cross-legged in loose clothing or a kaftan, as seen in many magazines.
- Mindfulness is not complicated. It is a process, and there is no measure of success or failure in your practice of it. Even when your mindfulness practice feels difficult, you will find that you have gained something from it.
- Mindfulness practice does not have to take a lot of time, as you will see in Chapter 3. However, like learning any skill it does require some practice and perseverance if you are going to get the benefit.
Equanimity: Approaching and Acceptance vs. Avoidance and Aversion
One of the central and most important aspects of mindfulness-based approaches is accepting and approaching thoughts, emotions, impulses and behaviours rather than seeking to avoid them, or control them. This can, at first, seem a very counterintuitive approach, and for many an uncomfortable one, especially when you look at it in relation to more traditional psychological methodologies. However, as we shall see in later chapters, there is strong evidence that the suppression of thoughts and feelings is not a workable strategy and that being more open to them, accepting them and relating to them differently is far more effective.
Acceptance-based psychological approaches have been applied to performance populations including athletes and sports teams, and also to international chess players. In a study involving high-ranked chess players,4 participants showed significant reductions in the interference of general, āunpleasantā thoughts, feelings, emotions and impulses during competitions as well as reductions in the frequency of their counterproductive reactions to these experiences as a result of learning strategies and techniques to accept and approach rather than avoid them. Also, as indicated by an objective chess performance measure, all participants in the experiment improved their performance during the 7 months after the protocol in comparison with the 7 months prior to it. In contrast, none of the control participants improved their chess performance.
Another study with a US college volleyball team found that after training in acceptance-based psychological skills, although their levels of performance anxiety remained similar pre- and post-study, they actually improved their performance quite significantly.5 It was not so much the feeling of anxiety that was interfering with their performance, but how they were reacting to that feeling.
This process of accepting something, such as your thoughts or feelings, without resistance is referred to as āequanimityā. In fact, in its wider sense, it refers to accepting things that you cannot control, to change what you can, but to let go of the struggle to change what you can't. You cannot, for example, control the markets. It is important to stress here that acceptance is not a passive state of resignation, and does not mean that you stop trying to grow and develop as a trader. Rather, acceptance entails a willingness to see things as they actually are in the present ā in that moment ā to experience them as they are. In my own work I often use the word āapproachingā when talking about acceptance, to highlight that it is not a passive process, and that it is also about moving towards what we are experiencing rather than away from it. This ability to approach experience, especially when it is viewed as unpleasant, is particularly important in dealing with the thoughts, emotions and sensations in the moment, but also in encouraging exposure to these difficult events and ultimately it produces an increase in resilience and toughness.
Take a moment to reflect on what you have done up to now in an attempt to overcome the challenges faced in your own trading.
What Have You Done So Far To Improve Your Trading Psychology?
- What have you already tried to get rid of your negative thoughts, emotions and ill-disciplined trading behaviours?
- What have ...
