In my book, Zero To Hero, I told the story of how, through the power of mindfulness, I was able to slowly but surely change my experience of trading, altering the way I respond, and by the same token, altering my performance.
I went at great length explaining how a consistent meditation practice has helped in that project.
Writing in a journal helped a lot as well.
More recently, I’ve shared the benefits I’ve had with a Pranayama practice.
But there’s also another small habit that I practiced (and keep practicing), that helps turn difficult situations into much better ones: It’s the habit of gratitude.
Gratitude is a mental habit you need to start cultivating if you want to be (and stay) mentally strong.
This is such a simple habit that too many people overlook. But when it’s practiced and turned into a daily habit, it can literally transform one’s entire perspective, and with it, one’s whole life.
Let’s look at what gratitude is.
Gratitude is the feeling that everything is perfect as it is and it’s the deep thankfulness one feels for everything as they are. Because all things, events, circumstances ultimately contribute to one’s advancement.
A more helpful definition comes from the Harvard Medical School:
“[Gratitude is] a thankful appreciation for what an individual receives, whether tangible or intangible. With gratitude, people acknowledge the goodness in their lives … As a result, gratitude also helps people connect to something larger than themselves as individuals – whether to other people, nature, or a higher power.”
Research has found that using gratitude as a strategy to navigate the conditions and circumstances of our lives, has a positive impact on our wellbeing. It appears that feeling grateful for the good things in our lives (and sometimes even the ‘bad’) has four important benefits.
Firstly, gratitude helps to magnify positive emotions.
For instance, you’ve experienced a loss as a result of following your plan. The loss is painful but you’ve followed your plan. With gratitude, you’re less likely to overly focus on the loss and, instead, it makes you appreciate the good that you’ve done — i.e., following your plan.
Secondly, gratitude helps you to block negative emotions like regret, guilt, envy, resentment…
Studies have found that if you’re grateful, you can’t resent people for having something you don’t have because you are content with what you have. You also can’t feel bad for a lost opportunity in the market because you know that opportunities are like taxis —there’s always another one behind.
Thirdly, gratitude helps you recover more quickly from stress, adversity, and trauma.
It helps you interpret negative events under a more positive light. It has been found to give you a perspective to help guard against post-traumatic stress and lasting anxiety. For instance, You can’t feel bad for a loss too long — especially one that occurred as a result of a mistake — because you know it’s just a learning experience. You know that you will keep making mistakes until you learn the lesson, so you’re open to learning. And you feel grateful for it.
And finally, gratitude gives you a higher sense of self-worth.
It helps you recognize that you have so much good happening in your life already; that you are worthy of happiness and success. It helps you see that you can achieve those things even when everything seems to be going against you.
Gratitude and its lasting effects on the brain.
Lasting effects on the brain? Yes, please! A lot of the studies on the benefits of gratitude have come out of the University of California Berkeley’s Greater Good Science Center. According to their research, it all starts with the brain’s reward system.
Essentially, researchers found that feelings of gratitude directly activated brain regions associated with the neurotransmitter dopamine. Dopamine feels good to get, which is why it’s generally considered the “reward” neurotransmitter.
But dopamine is also almost important in initiating action. That means increases in dopamine make you more likely to do the thing you just did. It’s the brain saying, “Oh yes man, do that again.”
So gratitude can have a powerful impact on your life because it engages your brain in a virtuous cycle — underpinned by neuroplasticity. If you feel grateful for what you’ve done, let’s say, and are rewarded for it via a Dopamine release, this initiates a cascade of positive changes in your brain. Gratitude, therefore, facilitates the process of mastery.
But that isn’t all. Through its targetted action on the hypothalamus, gratitude helps regulate hunger, body temperature, and sleep.
[You can find a list of the research related to gratitude here.]
So gratitude has tangible benefits, and it only seems natural for traders to get into the habit.
How to develop the habit of gratitude.
You don’t have to make it complicated. Hopefully, you already hold a trading journal. Just try to make some space in there to document the positive events that have happened in your day or week.
You could just do it mentally, and it’s really up to you, but, personally, I prefer writing.
Again, gratitude is a habit. And I promise you, it’s a well-worth one!
Keep doing it until it becomes a habit. And you don’t even have to do it for long. The research is pretty conclusive on that: 5-15 minutes is all you need.
My personal experience.
I’ve had the habit of jotting down the things I’m grateful for since 2012.
I remember starting the practice on a day where I was on the wrong side of the market. Big time!
I woke up in the morning just to witness a huge gap down in the underlying.
20% of my account went into flames. I sat there… long face… complete disbelief…
Even though I had a meditation practice (I had just started), the whole day, I felt generally stressed out about the event. I hated the position I was in and felt generally unhappy.
That same day, at night, I don’t know what took me but I decided to make a list of everything I was grateful for.
It was a long list, and while I can’t remember everything on it, some of the things I remember include:
- I have a beautiful, loving, and supportive partner.
- I have a roof over my head.
- I’m in a comfortable bed.
- I’m able to put food on my table and had a good dinner.
- I am relatively healthy (maybe at that time I was a bit underweight, but I didn’t have any major illness).
- The market will always be there. I just have to be ready.
- I am alive. I can taste delicious food, smell flowers, see art, hear music, love, experience life… What a fucking miracle!
- I have a few friends I can rely on.
- I’m an able human being, and if things go sour with trading, I know I’ll survive.
- Nothing is set in stone, I can choose to better myself and the quality of my decisions.
- I’m grateful for trading, with all its risk and opportunities.
- What doesn’t kill me makes me stronger.
The list was probably 3-5 times as long, but you get the idea. The things I was taking for granted were now put before my eyes. Don’t get me wrong… The things I was feeling bad about didn’t just vanish, but they were put in perspective. They were blended with more powerful elements of my life.
Yes, there are unfortunate things that happen in life.
Yes there is pain and suffering.
It’s OK to feel bad about those things. But it’s also important to remember the rest of your life. It’s important to remember that even the bad things are important. They make you appreciate the good, and they make life as complex and interesting as it is.
Seriously, life would be boring without challenges! Trading would be boring without challenges!
The transformation in my perspective I went through in that moment was really remarkable.
All from making a simple list.
Ever since, I’ve used this process hundreds of times, keeping it as a habit, and it has transformed everything that I am and do. Gratitude has become the lens through which I experience my life, and mindfulness its guardian.