In this post, I’ll share four lessons that my consistent mindfulness meditation practice has taught me about trading the markets.
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As you all know, I began trading fulltime (for a living) about 14 years ago.
Looking back, I have to say, I’ve learned more in those years (I mean, deeply transformative stuff) than I’ve ever had in my entire life, and I expect the lessons, the failures and the successes (all intimately intertwined) to continue.
That’s what trading does to you. It’s a highly competitive field and it forces you to get to know yourself and to ‘get your shit together.’
This is how you become a better decision-maker, but also more able to weather the ups and downs of the market while maintaining focus and mental stability.
If you can’t get to a point where you can do those things, sadly, there just won’t be any future for you in trading. (Perhaps you’d still do well as a long term investor, but that remains to be seen.)
Personally, this necessity to become more self-aware (and overall a more enlightened version of myself), led me to the practice of mindfulness meditation.
Mindfulness has been instrumental in my trading journey, and that’s why I make it a centerpiece on this website.
The ability to create distance from my thoughts and emotions and experience them under a different, more positive light has enhanced my life while making me a much better trader.
Here are four lessons the practice of mindfulness taught me about trading.
#1. – 80% is Showing Up
The core skill of meditation (mindfulness or otherwise) is showing up.
Showing up is not something we do once. It’s something we do over and over again.
Is it easy?
No.
Showing up is sometimes very hard.
Your mind finds excuses, you feel resistance, but that’s the whole point of showing up – it’s doing it anyway, no matter what your mind tells you.
Showing up is the foundation of the practice of meditation and one of the keys to success in almost anything in life.
In trading, showing up presents a couple of advantages:
- You begin taking every signal that your system identifies. Or as many as you can. The more you trade your proven system, you more you are improving your statistical chances of success.
- It allows you to take advantage of rare (and potentially life-changing) opportunities in the markets. The more you show up, the greater the likelihood of being at the right place, at the right time for some potentially very lucrative opportunities.
- Showing up makes you less prone to being disappointed. If a trade doesn’t work in your favor, you know there’s always the next trade, and the one after, and so on… because you’re showing up, trading becomes less about one trade; it becomes a process.
- When you show up, you are slowly developing mastery. It’s very simple: Mastery follows consistency. Often, we tend to think that developing mastery requires some monumental effort, but nothing can be further from the truth. Showing up and being consistent will bring you closer to mastery than anything else.
So, as you see, showing up is crucial in anything that you do, and, to my mind, the only failure is in not showing up.
#2. – The Process Is Everything
Early on in this meditation journey of mine, one of the lessons I learned was this: when we cling too much to an end result we so desire, often, it doesn’t materialize.
Not because of some metaphysical reason, but because often our own minds get in the way.
You see, many people come into mindfulness meditation expecting bliss or some kind of “enlightened” state of mind.
They sit, and they expect it right now.
By expecting, they’re overthinking, hence, they’re not meditating anymore.
Concentration is lost, and, as this feeling of bliss is nowhere to be found, one begins to feel agitated and thinks even more… naturally, under such conditions, bliss, peace, enlightenment, whatever one seeks is impossible.
Those one-of-a-kind blissful states do occur from time to time during meditation, but what’s important to understand is that the practice of mindfulness meditation is not about seeking those states.
The practice is about accepting all the states (ordinary or otherwise) that present themselves to you however they are, and not clinging to them or trying to avoid them.
It’s working with each and every one of them, gently and kindly.
When it comes to trading, it’s the same thing. Different context, but same principle.
People are usually attracted to the idea of trading because it’s exciting, and the potential for fulfillment is enormous.
So, it’s easy to get obsessed over an end goal of X return by the end of this or that period.
But, trading and meditation are both processes.
You do a thing to the best of your abilities… and then you do another thing.
If you keep at it like that, a few things become a lot of things one after the other, and before you know it, your results become tangible. Slowly, but surely.
But, in those two cases (mindfulness and trading), you’re unlikely to get results if you’re obsessed with a particular outcome and are expecting it at every turn.
You’ve got to have complete faith in the process and not even think about the end goal.
The key is to focus on the small steps.
Keep this in mind: It’s a marathon, not a sprint.
#3. – Your Ego Will Set Traps For You
Mindfulness meditation has allowed me to be a more authentic version of myself.
But it wasn’t always like that.
In my early days, I had somehow intellectualized this whole idea that someone who practices meditation is by default always focused, present, calm, and at peace.
And this quickly became an issue for me.
I was playing a role – “I’m a meditator.”
Admittedly, the practice did help in making me more at ease and peaceful (overall), but sometimes I didn’t feel calm and equanimous at all.
Instead, I experienced “negative” emotions because, after all, these are all parts of the human experience.
Yet, rather than letting myself experience those feelings —remember mindfulness is a nonjudgmental experiential practice– I repudiated them, ignored them, and simply acted as if I were calm.
I played a role…
And it’s ironic because, in playing this role, in attempting to act mindful, I was sabotaging my mindfulness practice.
In these moments, I wasn’t allowing myself to be my authentic self and experience my authentic being.
This is a trap that my ego had set up for me, and I fell right into it.
Unfortunately, it’s pretty much the same in trading: Our egos will set traps for us.
And one of the most obvious ones is by getting us excited about the mountains of wealth and riches that trading will help us generate.
This is readily observable on Twitter: Many traders want to get rich so badly (and fast) that even their Twitter names and pictures show this obsession.
If this is you, let me say that I do not mean to be patronizing (and forgive me if you feel that I am), but this is a terrible attitude to have as a trader because it shows your predisposition for short-term emotional gratification.
It shows that you are more prone to making trading errors born of fear and greed.
How do I know this?
In a not-too-distance past, I was like that.
Those who get sucked up by this mirage of wealth and riches never get far.
Don’t get me wrong. Trading can help you create a lot of wealth, seemingly out of thin air. And fast!
But, trading can also get ugly.
Sometimes you make mistakes, and you suffer the consequences.
Sometimes, you work a lot with nothing but losses to show.
Who breaks down when this happens ―is it the trader whose ego hangs onto every trade, or is it the one who remains level-headed and calmly focused on his/her process?
The first trader, obviously.
So, keep your ego in check, focus on trading well, and you’ll perform better as a trader.
#4. – We Have Little to No Control, and it’s Fine
Every moment that passes, you are moving closer to your death.
You can wish that you die of old age, but ultimately this is out of your hands.
At this very moment, the ceiling could fall on your head because somehow the home builders that built your house didn’t do their job properly.
You could step outside the next minute and have a guy texting on his phone run you over with his car.
You could have cancerous cells developing in your body that you’re not even aware of.
Those things would be unfortunate, but they’re very possible.
Everything is happening out of a long and inscrutable chain of cause and effect which you have little control over.
The rules that we create to govern society as a whole decrease the likelihood of something bad happening to us, so that we can live longer.
Rules create a structure for human behavior.
But this structure doesn’t create certainty; it just decreases the probability of something bad happening.
Ultimately, the certainty or the control we think we have is an illusion. It’s a beautiful illusion, but it’s just an illusion.
You really can’t control the environment, the weather,… mother nature. You can’t control each individual person walking on the face of this earth, and you don’t even have full control over your own body.
Every breath you take is unique and could be the last one. Every heartbeat of yours could also be your last…
Personally, a consistent meditation practice has helped me understand the changing and uncertain nature of life.
It has helped me make peace with it and appreciate it for what it is, as ridiculous, absurd or senseless as it might seem.
And when you learn to see and accept the world as it is, it’s bound to affect the way you see the market and experience trading.
Many people know what do to in trading, but they can’t seem to do it because they lack this experiential understanding or wisdom.
Somewhere in their mind, they know that markets are uncertain. At the same time, they hold beliefs that suggest the opposite.
And naturally, when they have sets of beliefs that clash, they systematically act on the beliefs that hold more weight in their mind.
When we stop believing in certainty, we become more accepting of the realities of the market.
Losses don’t hold the same kind of weight in your mind because you know (intellectually and experientially) that it’s temporary. Everything is! Everything is in constant flux.
When you have a practice like mindfulness that confronts you with this reality on a daily basis, eventually, it seeps into your trading. You stop trying to control your trade outcomes. You just sit back and let everything happen as they may while trusting your rules.
Conclusion
My mindfulness practice has taught me how to approach trading and navigate the markets with inner calmness and resilience.
Most of the time, I do not see myself in the markets at all –they don’t reflect back at me a feeling of inadequacy, or unworthiness, or lack like they used to.
Most of the time, I just see them for what they are.
And you can achieve this too.
- Trade a proven strategy
- Trade sizes you can handle emotionally
- Focus on the long term picture
- Pick up a meditation practice
The only thing is that meditation is pretty much like going to the gym.
The moment you stop being consistent with it, the changes you’ve been cultivating will gradually fade away.
So, it’s a life-long practice.
If you’re interested in learning it with me, check out the Trading Psychology Mastery Course.
In there, we work on dismantling some destructive habits that cause traders to fail.
We look at how to change your outlook, how to think in probabilities, and how to maintain emotional stability trade after trade.
We also work on relieving yourself of the trauma of past losses.
This course is not about rehashing things, it’s really about practice.
Check it out. If you’re willing to do the work, it’s possibly a game-changer.
To help you begin this journey to consistency, enter the code EQUANIMITY at checkout for a $50 discount.
THE TRADING PSYCHOLOGY MASTERY COURSE
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