These past few years, the market has been ramping up, with pauses few and far between.
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For trend traders, it’s been a relatively easy trading environment.
But recently, volatility has made its comeback. The market has decided to give back months of gains.
As we dive into the last part of this year, it’s easy to feel irritated, rushed and overwhelmed, because you want to close the year with profits. Especially if you’ve given back most of it, if not all, during this recent downturn.
In this post, I’d like to encourage you to try a simple mindfulness practice. It’s called Breaking the Spell.
Here’s what it looks like:
Notice each time you feel anxious, rushed, overwhelmed…
If you’re a day-trader, try to develop an awareness of it throughout the trading session. If you’re a swing or position trader, try to be aware of it whenever you initiate a trade or close one, or when you’re simply looking at your current positions.
The point is, the sooner you can catch those emotions as they’re happening, the better.
Maybe try to see it as a game – see when it happens as often as you can.
If you feel anxious…
Notice that mental habit that you have to just let that anxiety englobe you and carry you off into worry and blind reaction.
Don’t eat the bait.
Instead, notice what it feels like to be anxious. Notice how compelling it is – it’s like a spell has been cast on you. But once you become aware of it, you break the spell.
But breaking the spell isn’t enough. You have to build a new mental pattern: pausing, softening the feeling that’s in your body.
If you know some days will be more anxious than others then pre-emptive measures may be necessary. Breathe deeply and relax before taking the plunge. You could also try CBD/THC to help block the production of stress chemicals that cause anxiety. This article from Observer may be of use if you wish to pursue that idea further.
Once you’ve put a damn on the building anxiety. Redirect your attention to what’s written in your trading plan and what you know you should be doing. The anxiety should go and stay gone.
If you feel rushed…
Notice how that mental habit seeks to control you, again, like a spell.
Soften into it and understand that, in the market, whatever is going to happen will happen, whether you want it or not.
Ok, this recent downturn has made you lose a bunch of profits. You’re possibly even down for the year. Now you want to make it all back. Okay, I get it. But understand that your most urgent task isn’t to make back some money lost, it is to follow your plan.
Personally, it took me too long to understand that. There was a time when my ego and my delusions had taken so much control that I kept messing up my trades because I was desperately trying to achieve a specific yearly return.
Until I realized this: I don’t control how the market behaves and I cannot be profitable all the time.
Over enough time, my profitable trades should amply make up for that, but in the immediate term, there will be days, months, and even years where I will reap losses. Even when following my plan to a T.
This is how probabilities show up sometimes.
This was my realization, and it was a pivotal moment. Now I follow my plan with discipline, but I never let myself think “Oh, I need more return for this year”, or, “I need to get back what I lost.”
There is nothing to “get back.” In the short-term, the market gives some and takes some of its own accord. You do not control that. You only control how much. This is key.
So, realize that the only way you can improve your trading performance is to tell yourself that you’re not necessarily where you want to be, but you accept where you are right now.
Enjoy the journey. It’s all you ever have. Focus on trading well in the present moment and let your results speak for themselves over time.
If you feel overwhelmed…
When you feel overwhelmed, pause and notice the symptoms. If you look closely at what is happening there, you’ll notice some symptoms in your body and some story in your mind. The two tend to feed off of each other.
But the moment you bring mindfulness in, all of a sudden, the spell is broken. The feeling of being overwhelmed might still be there, but it won’t englobe you the way it did previously.
Then redirect your focus on your plan. Let that be your entire world.
Trust that you’ll be able to handle with composure whatever the market throws at you. Trust your plan and enjoy following it without letting where you want to be cast too large an influence over your actions.
It’s good to have goals. It’s important. But when you’re focusing too much on the goal, it becomes a distraction, an impediment, a source of stress…
Stress is being here and wanting to be somewhere else. But, accept where you are here and now, follow a proven process, and, all of a sudden, stress is reduced.
If you feel hopeless…
Hopelessness is what happens when you are desperately wanting to control something that can’t be controlled. Peace is what happens when you don’t.
Understand that you have no power over what the market hands you. You have power over how you respond.
Learn to stabilize your mind. A formal sitting meditation practice can help a lot. It will allow you to develop mental-skills like patience, resilience, and an overall maturity in working with difficult emotions that can be used in your “non-meditating” time.
I’ve said it a zillion times, it is SO much more than a self-improvement technique, it is a path to peace.
So, this is the practice. Simple but not easy.
Work on it. Get good at dealing with your emotions. It is a BIG part of this game. Almost every situation will turn out better with a cool-headed approach.
And then, smile and enjoy the journey.