If you’ve watched the movie The Matrix, you are undoubtedly familiar with an iconic scene showing Neo and Morpheus going hand to hand.
At one point, we see a shot of Neo taking a big hit from Morpheus which causes him to fall to the ground. They then exchange the following dialogue:
“How did I beat you?”
“You’re too fast…”
“Do you believe that my being stronger, or faster, has anything to do with my muscles, in this place?”
“Do you think that’s air you’re breathing?”
This is followed by a shot of Neo’s face that shows realization and understanding of Morpheus’s points.
The fight then continues, with both Neo and Morpheus’ performance approaching parity.
At which Morpheus says:
“What are you waiting for? You’re faster than this. Don’t think you are. Know!”
“Come on, stop trying to hit me and hit me!”
The next shot shows Neo’s arms moving twice as fast as Morpheus’, followed by a nervous look on Morpheus’ face. This shot helps the viewer see that Neo has just moved faster than what Morpheus can perceive, thus altering the matrix.
Here it is, for all of you, visuals.
Thinking too much
We’ll get back to that scene in a moment, but if you’re anything like me, your thoughts are pretty much impediments to the proper execution of your trading plan. A simple act of self-analysis through introspection and looking into your trading journal will undoubtedly yield the same conclusion –most of your trading errors originate from overthinking.
Here’s the typical pattern:
- Something happens – e.g. XYZ gaps down below your stop
- You perceive the event
- You immediately interpret it through the lens of your accumulated past experiences
- Since being wrong has caused you a great deal of pain in the past, you see this event through the same lens
- An emotion arises in response to the meaning you have given that new event
- The energy of the emotion demands action
- You either freeze, go hide, or over-thinking some more — you essentially act in a way that seems mandatory based on your interpretation of that emotion and the event.
And this whole process happens within micro milliseconds. Literally!
Now, the fact is that there may be other ways to interpret an event. And sometimes, it may not be helpful to interpret it at all!
There may also be other ways to react to the emotional energy. And it may not be helpful to react at all!
Coming back to the Neo Vs. Morpheus scene, Morpheus was attempting to lead Neo to that same conclusion, so that he could drop to a level outside of concepts and interpretations, go with the flow, and just focus on what is.
From this moment of unparalleled presence, when one’s mind is calm, clear, and focused; when the process of meaning-making is suspended, performance usually goes through the roof.
As you may know, these moments are commonly called “flow,” or, “Being in the zone” and accessing this state on demand is not that easy.
We live in a society that’s constantly bombarding us with stimulation; continually telling us to pay attention to this; to be afraid of that; to worry about this… and not only that, our mind has a natural tendency to get unconsciously captured by this constant conversation we’re having with ourselves.
And all of this keeps us distracted from the present moment –this unique moment in our existence.
No matter what you do in your life, you’re really in two conditions while doing it:
You’re paying attention to the thing you’re trying to pay attention to.
You’re lost in distractions.
If you’re truly paying attention, in essence, you’re connecting to a moment in your life that’s deeply fulfilling and rewarding.
If you’re lost in distractions, by definition, you’re thinking about the past; thinking about the future, but you’re not here.
And so, that’s the first spell you need to break if you are to enter that state of flow on a consistent basis – you have to learn to be present.
Before the market opens, come in early (say 10-20 minutes in advance); just sit there quietly, hopefully in a quiet room, and cultivate a quiet mind.
Focus on your breath — the autonomous, natural, automatic breath, not the self-directed one – at the level of the nostrils.
Observing the autonomous breath is interesting because it happens “outside of the ego.” Nobody is at home doing it, yet it just happens.
This is very important, so don’t forget that.
Now, this can be quite hard to detect when you start out, so do not worry if you don’t get it at first. Just pay attention to the exact moment of breathing in. An unconscious impulse to fill your lungs with air becomes slightly conscious; this impulse triggers your “wanting to breathe.”
Try simply to observe that impulse without grasping, without attachment, without creating stories. The stories will still be there, but they will become less dominant over time if you commit to returning your attention to the breath when you have noticed that you got distracted.
The more you do that – the more you take some time for yourself before the market open to observe yourself — the more you’ll be able to calm yourself before the open; before you enter the chaos. While people are losing their minds (the first hour following the open is volatile for a reason), you’ll be able to handle your emotional swings with more stability.
This is an important edge. Don’t neglect it!
At certain points (not all the time) you will experience what is sometimes called “access concentration”, or “flow” if you will. This is the point where nothing will distract you from the object of the breath. Your awareness rests effortlessly on its object without wavering. Liking and disliking cease to exist.
Conceptual thinking dramatically decreases exponentially. Thoughts still appear, but they are in the background. They inform you, like any other sense organ, as just another feeling, instead of psychotically dominating your world. Mind, body, and experience become one!
In trading, this is really the ideal state you want to inhabit. A quiet mind is able to hear intuition over fear; a quiet mind is able to execute with boldness; a quiet mind is not afflicted by emotions — emotions might arise, but they do not torment you. So you’ll spot your trades effortlessly, you’ll place them effortlessly, and you’ll manage them effortlessly.
Everything will flow through you naturally… and you’ll feel it. You’ll feel when it’s the right time to take action, you’ll know… you’ll just know, and it’s going be an effortless process.
Flow is a very important concept that you’ll need to understand on your way to consistent profitability. But it’s not always easy to inhabit that state on demand because a certain set of conditions need to be met for that to happen. And few people actually know how to do that reliably. Sometimes the mind has a mind of its own…
The good news is that I address that (and more) in the Trading Psychology Mastery Course. It’s a two week home intensive trader’s mindset program in which you learn to discipline your mind and develop wisdom, patience, resilience – all the qualities a good trader must possess.