Thursday, November 13, 2014

Why It's Important to Go With the Flow State

Thanks to @brussbowman for pointing out this interesting article on how the brain performs better when it slows down.  Steven Kotler makes the case that we can optimize our thought processes by more consistently placing ourselves in flow states.  During these flow states, Kotler observes, active parts of our brain slow down.  This helps account for a distinctive aspect of flow states:  we become so absorbed in what we are doing that we lose sense of time.

Kotler's recent book, The Rise of Superman, explains how the flow state is the foundation for performance success in fields as different as athletics and jazz music.  Adventure athletes, he notes, are especially good at hacking the flow state, utilizing a variety of environmental, internal, and social triggers.  One of the reasons adventure athletics can produce flow is that "flow follows focus, and taking risks drives focus into the now."

What is perhaps most interesting about the flow state is that it is achieved through heightened concentration and yet is a relaxed cognitive state.  When we encounter a situation that is difficult to deal with, we typically intensify our thinking and respond with emotional frustration.  Both, ironically, interfere with accessing the flow state.  Kotler points out that meditation--a loosening of cognitive constraints and entry into a different mode of processing--may be much more successful in helping us deal with challenges. 

There is a fascinating connection between deliberate practice and achieving the flow state:  tackling challenging tasks and receiving timely feedback creates an immersion in performance that helps us access flow.  Conversely, when we are stuck in routine activities, there is little immersion and little flow.  We commonly hear advice for traders to "stick to their process".  It may be the case, however, that we need to go beyond routine process to achieve the flow state routinely.  Once we're in flow, there is no need for externally imposed discipline.

Years of working with traders have taught me that we know more than we know we know.  That implicit knowledge manifests itself as intuition.  Most traders have experienced a "gut feel" in which patterns and meaning suddenly jump out from the seeming chaos of market movement.  Csikszentmihalyi's initial work on flow state suggests that it is closely linked to creativity.  It may well be the case that emotional disruption is most damaging to good trading, not because it necessarily leads to impulsive, destructive behavior,  but because it denies us access to what we know, but don't necessarily know that we know.

In one study, subjects were given a difficult brain teaser.  In their normal state, none could solve it.  When a flow state was artificially induced, over half of the subjects achieved the solution.  Perhaps Kotler is right.  We have a Superman within, if only we can access the proper state of consciousness.

Further Reading:  Implicit Learning and Trading Performance