Thursday, December 17, 2009

Biofeedback for Traders: A Simple Application

My recent post discussed using biofeedback as a self-control strategy. In this follow-up, I'll outline how I use biofeedback, both in my own trading and in my work with traders.

The program I've been using most recently has been the emWave system for tracking heart rate and heart rate variability. For more on the topic of heart rate variability, please see this post. See also this post on hemoencephalography, which is biofeedback that makes use of different data, based on blood flow patterns in the brain. If you are new to the topic of biofeedback, check out this introductory article.

Basically, biofeedback is a system that monitors and provides you with real time information about your body's level of arousal. There are biofeedback systems for brain waves, skin conductance, muscle tension, heart rate, and much more. The idea behind biofeedback is that you can learn strategies that will moderate your level of arousal, which in turn reduces your stress levels. If you are focused and relaxed cognitively and physically, it is difficult to be stressed out.

A simple routine that can help traders is to keep your body in a very steady, stable state for 10-15 minutes, reducing all forms of arousal. The way you do this is:

1) Fix your attention on something specific, so that your mind doesn't wander (music, a picture across the room);

2) Keep yourself completely physically still, with muscles relaxed;

3) Keep yourself in an environment insulated from outside noise and distraction (noise cancelling headphones are good for this);

4) Regulate your breathing by breathing quite deeply from the diaphragm and by breathing very slowly.

By staying in this mode for an extended time, you can enter a quasi-trance state. (See Chapter Nine of The Psychology of Trading for details on "tranceforming the mindscape"). In this state, you have enhanced attention and concentration, combined with enhanced relaxation. The combination of focus and reduced arousal is the entry point into "the zone"; it shows up in the heart rate variability feedback as regular sine-wave rhythms.

Because the biofeedback unit shows you when you're in those rhythms and when you're not, you can tweak your breathing and attention to improve your time in the zone. With sustained practice, you become quite adept at entering that zone. The benefits are substantial, not only in terms of reducing stress, but also in terms of enhancing your focus on markets.

For more, see the posts below: