Wednesday, April 07, 2010

Imagery, Visualization, and Anchoring: Building Positive Trading Behaviors

My recent post outlined important steps to take in raising one's trading size. This is one area where imagery exercises can be especially helpful in adapting to changes in your trading. My earlier post on the use of imagery highlights how the proper use of visualization methods can accelerate change processes. The idea is to make the desired change again and again in your mental rehearsals, so that you are prepared to make the right decisions when real-life opportunities occur. Imagery, used in such a manner, is a form of practice: it enables us to build new habit patterns in a rapid and controlled way.

When imagery is paired with a highly focused and relaxed state, it begins to look like a self-hypnosis routine. What you're really accomplishing with the imagery is a kind of self-suggestion: you are preparing yourself to act in a desired way in a targeted situation. Indeed, by staying very focused and calm during actual trading, you can activate the scenarios that you've practiced. Such "anchoring" is an unusually flexible and powerful psychological technique: by linking a desired behavior to a distinctive mind state, you invoke the behavior whenever you enter that state.

Notice that the goal of the exercise is to turn a positive trading behavior into a regular, automatic practice. Too often traders focus on reducing or eliminating problems, when in fact they would be better off by building on their best trading practices and making those more consistent. That is the essence of the solution-focused approach, and it's a great application of imagery.