Tuesday, September 18, 2018

The Power of Quiet Trading

Think of your mind as a finely calibrated instrument that can detect subtle patterns in markets--and in ourselves.  In order for this wonderful instrument to function properly, it requires no interference whatsoever.  If you place electrodes on a person's head to detect brain waves, the slightest movement of the head can throw the readings off.  Similarly, when our minds encounter interference, they no longer can read the subtle cues of conversations--or the subtle patterns of price behavior.

Perhaps the greatest trading psychology flaw one can have is the tendency to experience quiet as emptiness.  Instead of experiencing quiet as peace, people can experience it as boredom or as a void.  So they rush to fill their voids with self-chatter and aimless action.  Just watch how quickly we turn to our cell phones when a quiet moment occurs.  All that activity trains us in a sense: it trains us to be unable to make full use of our finely calibrated instrument.

The most recent Forbes post examines research relevant to the quieting of our minds.  One line of research reaches an astounding conclusion:  that it is in the quieting of our egos that we gain access to our greatest strengths.  I encourage you to check out the post and the research links.  If this line of thought is correct, then all the trading patterns/setups and all the self-help techniques designed to instill discipline and remove our blocks are of limited value.  If we are not in the right (flow) state to detect subtle patterns, we quite literally will end up trading noise.