FXGirl

I heard a story about Thomas Edison: He use to fall asleep in a chair, one arm handing down, a metal dish clutched in his hand. When he was asleep enough that his hand relaxed, the dish clattered to the floor and woke him up. Sometimes he awoke with a great inspiration or solution to a problem he had been working on. So maybe a nap is just the thing.

I, too, am over forty and live in So Calif, so I rarely get up for the open of anything thing. Yoga first, then the charts. If there is a lull and I'm feeling bored, or if I feel drowsy, I get on the rowing machine and pull hard for 10 minutes. (Rowing machine is right next to my desk). That gets the brain working again. If that doesn't work, there are always the "oldies but goodies" and I get up and dance - more fun, but not as good for the back and shoulders. I hate house work, so that is never an option (luckily, someone else takes care of that for me); love cooking but I get too involved; occassionally watch Netfix on one of the screens, but that can get dangerous so I don't do that often. I must admit that I got totally sidelined one day reading "The Hunger Games" - at least I wasn't in a trade!

Dear zdo: You said, “My posts are : offtoppic: ie they are for those few who ‘need’ flow and are willing and able to pay the price for sustained flow.” I’m not sure I understand what you mean by paying the price for sustained flow. Perhaps you could clarify that for me. What is the price? For me, flow has always been something that happens spontaneously when you relax into it. And by relax, I don’t necessarily mean you body has to be limp, but that it is almost like falling into it. Or if you are a Harry Potter fan, like Devil’s Snare, you just have quit struggling [ame=http://www.youtube.com/watch?v=znV2J73TpZs]Harry Potter - Devils Snare - YouTube2trim.flv - YouTube[/ame] I’ve experienced it surfing, when the wave, the board and I were one. I’ve experienced it as a cop when I suddenly knew I was in danger and exactly what to do to get out, every move lay out before me and my body moved through it smoothly and automatically. I’ve experienced it in deep meditation when my body was so still that it seemed to disappear entirely leaving nothing but perfect peace. I’ve experienced it as a therapist when I suddenly “got” a patient’s worldview and knew exactly what to say next. I’ve experienced it as a trader when I suddenly knew it was time to get in or time to get out – though I must say that doesn’t happen anywhere as often as I’d like. You might argue that the price for flow was hours of being in the water as a surfer, or years as cop, or many, many years meditating, or years as a therapist, or as a trader. But I’ve never had the sense that I had to pay a price for flow. It was much more like getting out of the way and letting it take me over.

Hi, Zdo: I certainly support your idea that flow starts in the body – that’s been my experience on a number of occasions, as has meditation on others. But when we use brainwaves in neurofeedback as a measure of state, or breathing and GSR as indicators of relaxation in biofeedback, or variable heart rate and magnetic pulse to measure “coherence” as do the Heart Math people, we are looking at the process of flow through different lens – none of which allow us to see the full picture. I suspect that flow exists and is the integration of all levels of our being. We haven’t discovered all the dimensions of flow, let alone how to measure them, so we are stuck with seeing a fragmented picture.

Suiya: I like your point about noise vs. signal. And I think others on this thread such as roztom are talking about the same problem. Les Fehmi, PhD, head of the Princeton Biofeedback Centre, has some interesting things to say about the noise vs. signal issue. Fehmi is an expert in neurofeedback and believes that it is the quality (style) of our attention that determines what information is available to us. In other words, it’s not what we attend to, but how we attend. He says that there are four basic attention styles and these are associated with particular brainwave patterns: 1. Narrow Focus – concentration on a limited field – this is where most traders are during a trading session. (see Beta Waves below) Higher Levels of Alpha and/or Theta 2. Diffuse focus – softer more inclusive view (conducive to market pattern recognition). 3. Objective attention – observer is emotionally distant from object (emotionally calm, non-attached). 4. Immersed or Absorbed attention – characterized by self-forgetfulness, unconscious (timelessness). Here is a chart of his theory: Quadrant B is associated with Low-Beta and Alpha brainwaves, a special kind of Alpha - phase-synchronous alpha. This means that not only are many parts of the brain producing alpha, but that these waves are also rising and falling in unison…a large number of cells are working together. If non-synchronous beta activity is like the chatter of an auditorium full of high school students engaged in separate conversations, the synchronous, uniform lower frequency (alpha) generated across the whole brain by open styles of attention is the equivalent of the same group of students singing together. Bursts of phase-synchronous alpha occur during optimal performance – being in the “flow”. Athletes say they have unusual perceptual experiences during these times; they often perceive high-speed action in slow motion, and some see spontaneously shifting foreground and background. In phase-synchronous alpha states, people tend to perceive events as simultaneous, timeless, and all inclusive. Some report a “sixth sense” of where other players are and where they were going to be in the future. In chess or trading this can be experienced as subtle patterns become perceptible, seeming to jump out from the background – trader’s intuition. Dr. Fehmi did a series of YouTube videos (eleven of them I think) about his theory and how it relates to peak performance, pain relief, etc. Here is the link to the first one: [ame=http://www.youtube.com/watch?v=rp7Ip18hsv8]Focusing on Open Focus: Part 1 What is Open Focus? - YouTube[/ame] I don’t want to violate Trader’s Lab rule about promoting any commercial services, so I want to make it very clear that I have no association with Dr. Fehmi; I’ve read his book and tried some of his exercises and found them helpful although I didn’t practice them as long as I would have liked to. The above chart is from his book, as is most of the information in this post on brainwaves though the comments about where traders fit into this schema is mine and from a presentation I did a number of years ago. Beta Waves: Beta 13-50 Hz, is where we carry out most of our tasks and where we are most of the time when we are trading. Beta is usually divided into three subgroups: Low Beta 13-15 Hz is characterized by relaxed but interested attention, characteristic of someone taking a test and knows the material well. Mid-range Beta 16-22 Hz, is produced during focused external attention. Frequencies of this range and higher are associated with the dominant use of narrow focus. High beta 22 Hz and higher generally correlated with tense muscles, anger, anxiety and other intense emotions…examples: someone taking a test and doesn’t know the material…or a driver with road rage (or a trader determined to get even with the market).

John: Very well put, very well indeed!

Karoshiman: No, this trader didn’t have meditation training, but he was a youth minister in years past and had a daily practice of prayer. I think this may have been the basis for his ability to calm his physiology. Also interesting was that he was an artist in his spare time and did beautiful, detailed paintings. When he was painting, he allowed his creative side to express itself (subconscious mind?). He trusted that it was there and would make itself known. I think that a calm, quiet physiology can be a great asset in letting the subconscious speak. The body can learn to move into that state through the practice of any of a number of meditative techniques (TM, Zen, mindfulness, mantra, etc.), controlled diaphragmatic breathing, biofeedback, and so on. A quick look in the Apps section of the iTunes store (or Android store) will show you a number of apps for breathing, relaxation, meditation or biofeedback. The trick is consistent, daily, practice so the body learns and goes into that state automatically in response to a given trigger, such as starting to breath deeply. And, of course, good food, as in good-for-you food, sound sleep, and vigorous exercise all support a calm physiology. Roztom: I don’t think that this trader set out to put himself in that state consciously. I think he had just developed that association over the years and found it worked for him. This became his consistent, natural state when trading. Of course, if he hadn’t spent years at the charts, his subconscious wouldn’t have had the data for understanding the market. However, this is a complex subject and a calm physiology is only one possible avenue to letting the intuitive voice express itself. In athletes, we don’t see a calm physiology. What we see is a state of mind, “flow”, and the body as the tool the subconscious uses to express itself. There are probably lots of ways to allow that intuitive voice to express itself, but one thing that always gets in the way is a negative emotional state. If your conscious mind is preoccupied with emotional drama and internal chatter, it’s tough to hear your subconscious. A very nice side effect of a calm physiology is a less intense emotional pull by the conscious mind, but it isn’t usually sufficient to silence the drama. There are lots of things you can do about your emotions (pretending they aren’t there is not an option if you want to be a good trader), but that’s probably for another thread. It would be interesting to hear what avenues or experiences, other than trading, have allowed the intuitive voice to express itself. Perhaps we could learn from some of these.

I’m coming in late to this discussion, but in reading back through some of the posts (not all), it’s been an interesting one. I’ve worked in a number of fields before becoming a trader: police officer, knowledge engineer (interviewing experts and helping them elucidate their decision making process), and clinical psychologist. This is what I’ve learned about experts: the subconscious mind records everything, all the facts, results, experiences (including physiological states) and all emotions associated with them (emotions are a critical ingredient), and it layers or mixes these in with other experiences that came before and turns all this into an extremely sensitive pattern recognition system. And because the movements of the market are so complex and the emotions so intense, with trading it usually takes a long time – years - for the subconscious to gather enough data to develop the pattern recognition system sufficiently. When the conscious mind is quiet, or looking the other direction, or when the pattern recognition system goes into red alert, the subconscious can get a message through to the conscious mind. It comes as a “knowing” (“I just knew”) or a feeling (“I just felt it was right”). Sometimes it has visceral component to it (“I felt it in my gut”). Some people have a knack for listening to this voice; they come to trust it and they relax into a state that allows it to come forth. But the problem for most traders is that they have trouble separating the “knowing” from the other emotions of trading and this is where they get into trouble. A number of years ago, we hooked up an expert day trader to biofeedback equipment so we could monitor his heart rate, breathing, GSR, etc. while he was trading. We expected to see rising levels of stress as he considered and took trades. Instead we found that his biomarkers dropped into what is more closely associated with a meditative state. Now, that was just one trader, but it made me wonder if what I was seeing was his way of letting the subconscious speak.

Hi, Bronchi07: Glad you liked The Mindful Trader concept. We'd really like to finish it and get it on the market. I'll look into your suggestion.

Certainly there is a learning curve regarding emotions during trading. Just like a new mother learns that every time her baby cries, its not a cause for panic, or a rookie cop learns that when the dispatcher calls you it isn’t always a robbery in progress, traders develop some equilibrium in the face of the market’s ups and downs – they have seen it before. And, as the Negotiator says, the more success you have, the more able you are to believe you can succeed in the current circumstances. Nevertheless, when “Emotions run wild and sabotage your trading constantly” a strategy of trying to control your emotion seldom works. The fastest and surest way to deal with out-of-control emotions is to look them straight in the face and articulate what you are feeling – say it out loud or write it down. Once they are out in the sunshine, so to speak, they lose much of their power to control your fingers on the mouse. All the stupid things we do such as get out of the trade too soon, move our stops, etc., we do in order to reduce the feelings of discomfort (fear, greed, regret, anger) we experience when faced with the uncertainty of market movement and the threat of loss. The brain is hardwired to produce these emotions as a way of getting us to take action. You can’t get rid of these emotions – they just are. You can try to repress them or pretend they aren’t there, but they will resurface and bite you in the ass just when you least expect them. Or you can acknowledge them, and in doing so, reduce their power, and then apply your cognitive techniques such as controlling your thoughts, and so on. Recognizing your emotions, articulating them, and employing techniques to move you into a more relaxed state (“ ‘bring forth’ a set of game specific, pre-existing capacities/archetypes/background emotions…”) where you can more clearly see what the market is doing, is what all long-term successful traders have learned to do. For most, arrival at this process has by trial and error and so it has never been thought of as an integrated strategy. Instead, it operates unconsciously, as a habit. So once traders get to this stage, they seldom remember how they developed their emotional management skills and they tend to think they just learned to get rid of or “control” their emotions.

No, you don’t have to fix yourself in order to trade. But you probably do have to fix certain patterns if you want to trade successfully. The chief characteristic of the market is its ambiguity. We don’t know for sure what the market is going to do next. We have theories, indicators, system, etc., that help predict market movement, but none of these tells us what the market is going to do each and every time. This ambiguity makes the market a perfect Rorschach. We can project whatever we like on to it… and we do. We all have internal scripting (what we believe is true) about our ability to succeed, about money, about our lovability, about the need to be right, our need for acceptance and so on. These emotional structures are the result of our early experiences in life; they are alive and potent in our unconscious, and are triggered when we experience something that reminds us of these early situations. Had a Dad that told you no matter what you did it wasn’t good enough? Did you get angry and try even harder to prove him wrong? Now take that into your trading as an adult. You work hard, do the analysis, and put on a trade. At first it’s looking good, then the market starts to move against you. What are you feeling now? Do you dig you heels in, affirm that you are right and it’s got to turn around so you add to the trade? But the market doesn’t turn around and now you have a loss that a lot bigger than it should be. Do you get angry and take a revenge trade even though you know you shouldn’t? You weren’t thinking about your relationship with your Dad when you were trading, but those emotional structures influenced what you did with your trade. So, yes, you probably want to find a way to “fix” that. Fixing it doesn’t necessarily mean that you have to resolve your issues with your Dad, though that would certainly help. Fixing it means that you pay attention to what you are feeling, recognize that emotions are data, and use that knowledge to make you a better trader by creating a different response to the market in similar situations.

Hi, pa18: Because we are a Mac family, I don’t have much experience with non-Apple products. The emWave is a standalone device based on HeartMath research (scientifically sound), but requires you to keep a finger on it. If you want to use it while trading, be sure to buy the version with an additional sensor that can attach to your ear. I’ve seen it on Amazon for about $145. There is a computer version too, but it’s more expensive. It’s been a while since I’ve used this program and I’m not familiar with the latest version, but I imagine that if you have multiple computer screens available, you could run it while you are trading. The emWave is a sophisticated biofeedback device and will teach you more than just how to breathe. My husband, who is also a psychologist with a specialty in anxiety disorders, occasionally recommends Chopra’s “The Journey to Wild Divine” to his patients who want something to use at home on a PC. It’s a bit pricy, but it is visually interesting and has a number of different challenges to keep you engaged. Of course, you can’t trade when you are using it. I did a quick look at apps for Android phones and saw “Breath Biofeedback” which looked like it might be good, as did “Deeper Breathing”. These might be worth investigating. They certainly are affordable (free and $1.59 respectively). Hope this helps. If you decide to try any of these, please give us your feedback.

I want to respect Rande and Zdo's request that comments on the Trader's State of Mind group process ocurr in a separate thread, hence this "Comments" thread. Rande, I think you are spot on teaching breathing techniques in your first session. The skill of managing physiological arousal through controlled breathing is a great tool for all traders to help reduce emotional intensity. I use diaphramic breathing when I feel myself starting to tense up during trading, and I've taught it to other traders and patients who have used it with great success. It's surprising how quickly our bodies make the connection between slow, rhythmic breathing and calmness. For those of you who have iPhones or Mac computers, here are the names of a couple of apps that will help you practice your breathing: "Breathing Zone" (there is a free version for the Mac) and "Breath", "BioBreathing", or "BellyBio Interactive Breathing" for the "iPhone" (a couple of these are free). All should be available through the iTunes store. If you discover other apps that you like, please let me know about them. Other apps that might be interesting to explore are "Let Panic Go", "Stress Doctor by Azumio", and "Biofeed" - all for iPhone. I wish they had more for the iPad, but I guess that will happen eventually. Zho, I saw that you wanted some suggestions for biofeedback. Some of the above apps might interest you. In addition, there are many biofeedback devices for sale on the Internet. Look for one that is VHR (variable heart rate) based, not one that is based on GSR (galvanic skin response). Some people do not produce sufficient changes in GSR for it to be a reliable indicator. If you are planning to use the device while you are trading, look for one that has an ear clip sensor - that will leave your hands free to use the mouse and keyboard. Also, look for something that gives you a signal when you are in a good physiological state. Several years ago, we developed a biofeedback device specifically for traders called The Mindful Trader. It used an ear clip that connected to a USB port of your computer. The program alerted you when your physiological state changed (VHR in this case) sufficiently so that you were out of your optimal trading range. (Yes, it learned what your personal optimal range was after a certainly length of time!) It had a function to guide your breathing in order to bring you back to a calmer state. Unfortunately, the people we were working with to do the programming wanted more money before we went to market, so we were never able to make available to traders. Oh, well. Such is life. Anybody know a good apps programmer?

Dear Mighty Mouse: That sounds so sad. When I die, even if in mid-trade (stops and take-profit in place), my family will know exactly where to look for the money. My trading is done through a family owned corporation – no problems with getting the money either. I love the idea that they will enjoy spending it – hope they have a great time. As to the fading photo on the mantle, that is as it should be. We have loved, and loved well. What more can you ask? I don’t want them to get stuck in memories, grief or regrets. I hope my husband goes on to fine someone else he can love deeply. I hope my children will go on to create happy, meaningful lives for themselves. Years ago (and I do mean years), I was a police officer. When I went to work each day, I never knew if I was going to becoming home. The dishes were done and the beds made so no one could say I wasn’t a good housekeeper (that’s a woman thing), and my last words as I went out the door were always, “I love you.”

Trading may be a mental game, but managing the physiology is essential to a good mental and emotional performance. Sleep: Get to bed on time – there is nothing like a good night’s sleep (eight hours minimum for me) to set me up for a good trading day. No sleep – no trade! Emotional balance: Because I’m on the west coast, up at 4:45 AM. Savor the quiet – everyone else in the house is sleeping. I take time to look at the stars if it is winter. In summer, I watch the sky lighten. Feel gratitude for the peace and beauty, for my family tucked safely in bed, for living a charmed life – not necessarily everything I want, but certainly everything I need. Food: English breakfast tea, strong, hot, with cream. Avocado on sprouted wheat toast (hey, this is California) and a hardboiled egg. Need that protein for brain function. Second cup of tea, time to turn on the computer. Physiological arousal: When trading gets tense, breathe. Look away from the screen and breathe some more. Keep breathing deeply until calm. Think about surfing. Remember the way the ocean talks to you, tells you when to dig in and paddle, when to kick out. Some waves are good rides, some aren’t. Remember there will always be another wave, wait for the right one. It’s the same with the market. Breathe more. Now look back at the screen. Low physiological arousal: When bored, get on the rowing machine, pull hard until alert and out of breath.