The heart of discretionary trading is pattern recognition. Some traders track patterns in fundamental data; some follow price and volume behavior; some attempt to quantify patterns in sentiment and breadth data; some focus on patterns that follow events, such as earnings releases. When we have experienced many examples of patterns, we internalize them and develop a "feel" for their occurrence. It is that feel that we call intuition.
In the Radical Renewal blog book, I raise the issue of how our egos impact our trading. What is ego? It is our self-talk. Whenever we focus on hopes, fears, frustrations, and needs, we end up talking to our selves about ourselves. Such self-talk can be useful in planning and thinking through issues. We need our egos to navigate the world and accomplish things.
The problem occurs when our self-talk becomes so loud that it drowns out our intuition, our feel for patterns. There is no way we can be sensitive to patterns in what a market is doing if we're raging to ourselves about the need to make money, the fear of losing, or the fear of missing out. If intuition is the whisper of the soul, self-talk is the shout of the ego. Often, we lose our feel for what we're doing as we become most self-focused. This happens in all areas of life, not just trading.
Many self-help and coaching techniques simply substitute one kind of self-talk for another. Filling our minds with positive talk might feel better than burying ourselves in worries, but both lead to clutter that drowns out the whisper of intuition. What we need is a quiet and open mind so that we can amplify the whisper into a clear and consistent voice. This is why many traders find meditation helpful: in controlling and quieting the body, we can focus the mind and let patterns speak to us.
One exercise that I have found remarkably effective in quieting the mind and improving access to intuitive knowing is simply to take a brisk walk very early in the morning. The streets where I live are completely quiet and the air is often cool and refreshing. During the walk, I focus my attention on all that I see and look for the beauty in my surroundings: an attractive house, colorful flowers, a cute squirrel, the morning sky. My mindset is one of appreciation and gratitude, focusing on all that I am privileged to be surrounded by. I don't think about my work and the day ahead; I don't think about what happened the day before. The mindset is entirely focused on the present.
Think about how many trading problems occur because we are not simply present in the present. We are caught up in what just happened and we become focused on what might happen. We talk, talk, talk to ourselves and never reach the quiet state where we can simply listen. We become masters of intuition when we can operate continuously with a focused, open mind. This is a strength that can be exercised and developed: the simplest walk can help us turn the soul's whisper into a reliable voice.
Further Reading:
.
Posts
