October 11

How To Trade Like A Zen Monk

By Yvan


To be a zen trader is to trade in a state of grace. But how?

First, let me share a quote with you:

You Only Lose What You Cling To.

The above statement is often attributed to the Buddha, though, some scholars say there is no record of him ever saying that.

But whether the Buddha actually uttered those words or not, in Buddhist epistemologies, it is well understood that most of our troubles stem from our attachment to things that we mistakenly see as permanent.

So the remedy that is put forward for consideration is this: We must develop a mind that sees impermanence and clings to nothing.

As a trader, imagine what it’d be like to have a mind like that — it’s a mind that doesn’t need things to be a certain way; it’s a mode of thinking and perceiving that’s rooted in non-attachment; it’s a zen mind…

See… if a loss irritates you, it’s probably because you were attached to a particular outcome.

If you obsess over the fluctuations in your PnL, checking it 20x a day, you are also attached to a certain outcome or ideal you want to happen.

If you have a habit of closing your winning trades too early, you are attached to certainty.

There are many other examples, but in general, you are attached because you’ve imagined things to be a certain way in your mind, and when they happen differently, you feel miserable.

In fact, trading aside, every difficulty we experience in life is caused by this habit of attachment: stress when we’re overwhelmed, procrastination when we don’t want to do something uncomfortable but necessary, boredom, loneliness, shutting down rational thinking in an argument, bad financial habits, overeating, and much more.

It’s all because we’re attached.

If our mind wasn’t so attached, we’d be better off. We really would.

Of course, in trading, you’d still need to be curious and open to learning, but you would not have to be upset about a trade outcome that didn’t turn out your way.

At the end of the day, being upset and all worked up is optional and only adds a layer of struggle that you don’t need.

Okay. So then, how to develop a mind that doesn’t cling?

Here’s how to become a zen trader:

1. Start by just noticing when you are getting attached.

It’s hard to see at first, but once you become aware of it, you start noticing it all the time.

When you don’t like the way your lunch tastes, that’s attachment.

When you absolutely need to have your morning coffee, that’s attachment.

When you overtrade, close a trade too soon, or when you check your PnL 30 times a day, that’s attachment.

When you procrastinate, overeat, get frustrated, lash out, run to your favorite distractions, shut someone out… those are all instances of attachment.

Just start noticing. Notice without judgment.

2. When you’ve noticed the habit of attachment, try to see how it feels.

What do you notice about your mind when you’re attached?

What do you notice about your body and the sensations therein?

Get curious; fine-tune your attention so that you can notice the smallest details.

Notice where in your physical body you feel that feeling of attachment, of crisping, of wanting… And without trying to push the sensations away, feel what happens to them when you observe them objectively.

Do they linger? Do they move? What’s their temperature?

Usually, what you’ll see is that, if you adopt this kind of objective observer pov, the feeling gradually dissipates.

3. Notice the self-centeredness of attachment.

When you are clinging to something, it’s because you are at the center of it all. You want things to go your way,  to be the way you like it, to meet your desires and fantasies.

This is when we put ourselves at the center of everything.

Again, just notice.

And realize that while your ego protects you in the outside world, this how much of it you actually need in trading: Just enough so that you can execute your trades properly and not shoot yourself in the foot.

4. Practice letting go.

Letting go of attachment is akin to a sort of relaxing of the tightening and rigidity of your mind and body.

It’s a relaxing of your grasp on how you want things to be.

It’s saying to yourself, “I don’t need things to be my way. I don’t need them to be any way. They can be any way they want and I’ll be content with that.”

But here’s an important caveat: Try not to actively seek letting go. This is another form of attachment.

Instead, simply feel whatever comes up in your body as a response to what’s happening in the market, or to your trade. Accept it fully and letting go will then naturally happen.

5. Find beauty in everything.

Inherently, no situation is ever “good” or “bad” because you never know how the future will turn out from there.

Have you ever seen the movie The Butterfly Effect? It’s a great depiction of how life is – a giant play of causes-and-effects.

If an immediate outcome is positive or negative, you still never know what the future reserves.

Because the future is always open to new possibilities.

So everything is perfect the way it is now. In the short term, “good” outcomes will confirm some of your ideas, positive habits and qualities, and help you build confidence. “Bad” outcome will get you wisdom and help you make smarter decisions in the future.

When you understand that, you also understand how futile it is to label events and outcomes as good or bad. You just flow with whatever is. You’re a zen trader.

6. Pick up a daily formal meditation practice.

If you’ve been reading this post while saying to yourself: “Well, don’t you need some sort of attachment to an ideal if you want to achieve something specific in life?”

It’s true, but then I’d make the distinction between attachment and aspiration.

Attachment is rigid, it’s a unidimensional way of looking at things.

Aspiration is more flexible. It’s has acceptance built into it.

When you cultivate a meditation practice; you’re cultivating the habit of observing the patterns in your body and mind and the patterns in the external world too. And one of the many insights that eventually come to you as you do that is that nothing in your life is as reliable as it seems. Everything is subject to the law of impermanence and change.

When you realize this, it will help you see (experientially) that attachment is a lose-lose situation, no matter how you slice it.

You lose if you do not get what you want. You lose if you get what you want because what you got will change or your desire will change.

But your meditation practice will also help you accept this fact of life. When you accept it, paradoxically trading becomes easier. Because you’re not grasping and resisting. You’re letting everything flow and be just the way they are with full acceptance.

Conclusion.

The real way to become a zen trader is to develop a mind that clings to nothing. And to do that, you must continue to let go. It’s always about letting go. Moment after moment, noticing the clinging and then letting go. Again, and again.

As long as there is attachment to things that are unstable, unreliable, changing, and impermanent, there will be misery because these things will inevitably change and cease to be what you want them to be.

So, cultivate non-attachment. That’s what’ll make you a zen trader.

The above steps, if applied, refined, practiced, will help you develop a mind that doesn’t cling. Of course, it goes without saying that those steps won’t get you all the way Zen monk style, but they’ll get you pretty close.

 

—-

Memorable Lines From This Post

You Only Lose What You Cling To.

Click to Tweet

Being upset and all worked up is optional and only adds a layer of struggle that you don't need.

Click to Tweet

This how much [ego] you actually need in trading: Just enough so that you can execute your trades properly and not shoot yourself in the foot.

Click to Tweet

Attachment is rigid, it’s a unidimensional way of looking at things. Aspiration is more flexible, it’s has acceptance built into it.

Click to Tweet

Attachment is a lose-lose situation, no matter how you slice it. You lose if you do not get what you want. You lose if you get what you want because what you got will change or your desire will change.

Click to Tweet

The real way to become a zen trader is to develop a mind that clings to nothing. And to do that, you must continue to let go. It’s always about letting go.

Click to Tweet

Share The Full Post


Take it Further with The Trading Psychology Mastery Course

"The course has impacted positively my trading by bringing awareness to my monkey mind habits during live trading. The awareness is impacting my life in general where I am making better choices. i would recommend it highly to every trader I know." ―Mandeep Gill