EDITOR'S NOTE
This special guest commentary was written by Dr. David M. Rosenblatt. Rosenblatt is an investor coach for MarketPsych, an expert in stress management, and an avid individual investor. Additionally he works with the California Department of State Hospitals treating Mentally Disordered Offenders.
Working with schizophrenia offers many bunnies to chase down psychotic rabbit holes.
The mind is a creative powerhouse that gave the world nanotechnology, satellites, and global markets. Unchecked, however, the mind is a scary place that turns shadows into demons and itches into insects. Stress can derail productive thought. Stress management can harness the energy generated in response to challenges.
The first article in this series introduced three controllable behavioral domains that can be leveraged to make better trades: focus, sleep, and meditation. Articles two and three further discussed focus and sleep, respectively. In this article, meditation is explored in greater depth.
Meditation is ancient...
It goes as far back as written history. A meditative state may be a truer state than the screen-loving abstract approach Westerners tend to take now. Social commentary aside, data reveal the mental and emotional benefits of meditation. These benefits can be used to the trader’s advantage to improve returns.
1. Meditation slows aging.
Structural-imaging studies found that the brains of experienced meditators had less drawdown in size than did non-meditators. Regular meditation practice can help you stay in the trading game longer.
2. Meditation anchors the mind.
Regular meditation practice shifts neural connections so that the mind wanders off less and stays present more. With less rumination on bad trades or worry about future trades, the mind has more resources to navigate markets.
3. Meditation improves memory and mood.
Additional neural changes from ongoing meditation include growth of memory areas and shrinkage of fear areas. People notice this difference, too, to a point that rivals the effectiveness of antidepressants.
4. Meditation improves focus.
As previously discussed in article two in this series, focus is critical to ignoring irrelevant and considering pertinent information. Tests showed people improved concentration and attention after consistent meditation practice of just a couple of weeks.
5. Meditation relaxes.
Objective physiological evidence -- such as reduction in heart rate and blood pressure -- demonstrates the relaxing effect of meditation. Meditators corroborated with their subjective two-cents, like when they reported lower pain levels after mindfulness practice. Certainly, any medical conditions and medication management should be addressed with a physician.
There are a variety of ways to practice meditation
Like many other activities in life, the results come after regular practice. In some cases of anxiety, people may feel a little worse before they feel better. Find what works for you and stick with it.
Guided meditation is a nice place to start because it provides step by step instructions for how to meditate. Myriad websites offer scripts to read or recordings of scripts. Click around until you find a voice and style you like.
Breath work is another starting point. Buddha himself taught that breath is the fundamental connection with the world. Focus attention and awareness on the breath for some moments. Nature sounds can be a nice, aural backdrop for breath work.
Mantra meditation is silent chanting of a word or phrase. The practice is to keep the mind centered on the mantra with gentle redirection back to the mantra when distracted. This can be done with eyes shut or open, such as when in bed or on a subway.
Sensory meditation is focus on a sense. Gaze at a flower for many moments to take in the reflected light, refrain from labeling the color “purple.” Smell the wafts of essential oils. Slowly rub lotion on to the hands. Take a moment to relax and savor the world around you.
Consider a low-impact physical practice of meditation, such as Tai Chi, Qi Gong, or yoga. Mindful walks fit into this category as well. Consult with a physician before engaging in any new physical activity.
It may be a sin to discuss meditation without mentioning mindfulness. Mindfulness is two parts:
- The choice to remain open minded and
- Focused awareness on the moment.
Meditation and mindfulness can go together like strong fundamentals and growth.
That does it for this four-part series on stress management. We covered three controllable domains of behavior: focus, sleep, and meditation. Structure in any of these domains can support mental health and bolster financial trading.
As a trader, what psychological concepts or practice do you want to know more about? Let me know!
