This Psychological Trick Can Help You Improve Your Trading: Recent advances in the science of psychology offer traders a powerful technique to make it possible to introduce essential changes in behavior. Many aspects of the new psychology techniques have been adopted from the Eastern spiritual tradition, which is. Today, the idea of a conscious mind has changed the landscape of Western psychology. Researchers suggest that ‘mindfulness’ may have a wide range of applications. In particular, it can be used to increase concentration, minimise stress, overcome serious psychological problems and improve performance in various activities such as sport or trading.
The purpose of reducing stress and improving performance is essential for traders, who have to struggle with the influence of emotions every day. Mastering ‘mindfulness’ skills can be useful for any trader in three ways.
Developing an awakened mind is the most efficient way to improve concentration and attention. Like professional athletes, who know that their concentration improves if they are aware of it, mindfulness traders begin to «see the market better» and improve their ability to discover the important clues it provides. Mindfulness ensures a high level of concentration and the ability to fully immerse oneself in the market.
Awareness of the present moment
It is difficult for many traders to concentrate on the present moment rather than repenting of something from the past or thinking about things that might happen in the future. For example, a trader may lose the opportunity to open a position with high potential because, at the time the position was supposed to be open, his mind was regretting past losses. The trader prefers to avoid risks and stay away from the market even if there are many possibilities to make a good trade.
A trader concentrating on the past or the future and not on the present loses important clues that indicate changes of direction. Another mistake is clinging to a losing trade due to habits. Mindfulness provides the trader with critical thinking and helps him to improve his ability to identify distractions.
Reducing stress and mastering emotions
Perhaps the main value of ‘mindfulness’ is that it makes it possible not to rely on one’s own emotions when trading. Trading is a remarkably stressful activity. And when a trader is stressed, the struggle to escape more stress is so intense that he loses the ability to focus on trading.
The trader’s attention is often focused on his emotional state and not on the market. As a result, he falls into error after error, leading to unavoidable losses. Mindfulness helps to avoid being trapped by emotions and thoughts, and to focus on what is essential for trading. This separation between emotions is called ‘diffusion’.
Mindfulness is now believed to be an essential element of trading psychology, as it helps traders perceive their inner state (including thoughts and feelings) from a more distant and detached perspective.
If we suffer because of your thoughts and feelings, we will only get more entangled in them. Instead of suffering, we must learn to stay focused on what we are doing. For example, athletes show better results during competitions, when they stay focused on the game rather than on their inner state.
A person who masters the skills of mindfulness may perceive their emotions and thoughts as transient events rather than seeing them as something that demands an immediate response. Developing this technique is the best way to stay focused on operations and the market.
There is no doubt that practicing mindfulness can drastically improve traders’ performance. In addition to the above-mentioned benefits of mindfulness, it has been proven to reduce stress, promote relaxation, strengthen the immune system, relieve pain and improve mood. It helps traders to be more focused on their goals and the most essential things in trading and their lives.