You may have heard that meditation can help you trade better.
Just like anything else, it is not for everyone, but I have yet to hear a case where it has not helped, at least a little, after the person gave it an honest effort.
So in this post, I will introduce you meditation for traders and hopefully remove some of the roadblocks that have prevented you from giving it a try in the past. You will understand why it works, how it can benefit and how to meditate properly.
It is something that I believe should be part of what I call Holistic Trading, where you are not simply looking for entries and exits, but consider all aspects of your life and how they can improve your trading.
Trading better usually means that your quality of life will also improve, and the two will continually build upon each other.
Before we get started, you may think that doing meditation means that you have to join a religion or live in a commune or something.
Although many meditation practices do have religious roots, it is not a requirement that you join any type of group to get the benefits.
It is similar to trading, where you are free to learn from different teachers and take what works and leave what doesn't.
Another misconception is that it is time consuming, complicated or mystical. It can really be as simple or complex as you make it. You can start to see results in as little as 2 minutes a day.
Just like in trading, I opt for simple…but do what works for you.
Why Meditation Works
Meditation works by allowing us to control the state of our minds.
We can measure these states by the frequency of the electromagnetic waves that our brains give off. The measurement process is called electroencephalography or EEG, for short.
There are different tools that you can use at home to measure your brainwaves. See my list here.
If you are not familiar with the different types of brain waves, here is a short summary. Mediation is associated with the theta and delta states, but I have included the others so you understand the bigger picture.
Your brain does not only operate in one state at a time, but in fact gives off brain waves of these frequencies all the time. When I talk about being in these states however, I am referring to the dominant frequency.
When your brain is giving off frequencies of greater than 30 Hz, you are in gamma state. This is the state that is most conducive to active learning and information retention.
It is also probably the least studied state. If you need to learn something, consider trying to increase your brain activity before you sit down to study.
This is the state that monks can frequently achieve after years of practice
This is our bread and butter. When we are giving off frequencies between about 12 – 30 Hz, we are in an alert state and doing normal daily functions like analyzing and planning.
This refers to the brain waves that are in the frequency between about 8-12 Hz. This frequency range is associated with conscious reflection and a relaxed state of being.
This is often when you are most creative.
Now we get into where meditation starts. When your brain is giving off waves in the 4-8 Hz range.
It is a state of deep relaxation and awareness. In this state, you have an increased ability to visualize things and solve complex problems creatively.
When you go down past theta, you are in delta, which is less than 4 Hz. If your brain is in this state, you are often in deep sleep, although some long-time practitioners of meditation can reach this state while awake.
This state is associated with healing.
How do you know what state you are in? There are many devices of varying complexity that will measure your brain wave activity or biofeedback devices that will measure your stress level.
Look around and see what suits your needs and budget.
Benefits of Meditation
There are many good reasons to practice meditation. In trading terms, it can lead to better concentration, calm under pressure and improved overall performance.
The benefits extend way beyond trading however. You will probably find that you are more relaxed in your everyday life and are able to cope with situations that may have overwhelmed you in the past.
This is a great list of the benefits of daily meditation, along with associated scientific studies.
According to a Harvard study, it has even been shown to ward off disease.
Now that you know how it can benefit you and how it works, let's take a look at how to meditate properly.
How to Meditate “Properly”
Contrary to what you may read on the internet, there isn't really one way to meditate properly.
Instead, in my research and personal experience over the past 15 years, I have found that “proper” meditation is the type of meditation that you will actually do on a regular basis and that works for you.
That being said, I think that the best thing that I can do for you in this post is to expose you several different types of meditation and sources of information so you can start your journey on the right foot and figure out what works for you.
Let's take a quick look at a few of the options that are out there…
A Basic Trading Meditation
If you just want something to get started, here is simplest form of meditation that anybody can do. Just do it every day for 5 days and see how you feel.
- Find a comfortable place to sit with your back straight. You can sit against a wall, on the floor or in a chair, whatever is most comfortable for you.
- Close your eyes and breathe in and out deeply and steadily. Only breathe in and out through your nose. You do this because breathing out from your mouth can activate your fight or flight reaction, similar to if you were running from a hippo.
- Concentrate on your breath and try not to think about anything else. It can help to count to five in your mind when you inhale and again when you exhale, so your breathing is even. If it helps, imagine a blank white movie screen in front of you. This can help you keep other thoughts out of your mind and just relax.
- Do this for 5 minutes. Set a timer with a gentle alert tone, if necessary.
- Before you open your eyes, take one last deep breath in and visualize yourself calm and collected. Then exhale and slowly stand up and go on with your day.
You may have heard of this type of meditation before because it is very popular. Famous practitioners include: Paul McCartney and Ellen DeGeneres.
I believe that one of the reasons that Transcendental Meditation has become so popular is because of its simplicity and the fact that it is does not tie itself to any religion or lifestyle. Although I have not been through the full course, I have seen some of the TM tutorials in the past.
It is very simple and I'm not sure that you need a full-blown course, but I could be wrong.
For people who do not like to sit still, Qi Gong may be a good alternative. It isn't meditation in the more well-known sense, where you sit and close your eyes, but it does provide many of the same benefits.
The basic idea behind this Taoist practice is that you are cultivating and distributing your body's energy. You move and breathe in ways that help you become more centered and energized. I do these exercises occasionally and I feel great afterwards.
If you dig deep enough, you will find that almost all of the major world religions practice some form of meditation. Even if you don't believe in the religious part, you can still learn a lot by studying these practices.
Buddhism is the religion most frequently associated with meditation and there are some really good books out there. The one that gets mentioned the most is Zen Mind, Beginner's Mind, by Shunryu Suzuki.
I have read it and although there is some religious nonsense it in, there is a lot of very useful information and practical exercises. It is a great place to start if you are a beginner.
Chris Capre also has a great trading mindset course that teaches one form of meditation. You can try it out and see if it works for you. I highly recommend this course because it really helps you figure out what is holding you back in trading.
So regardless of which method you use, just get started and find out what works for you.
Keep in mind that you may have to do some searching to find what works best for you, so do not get discouraged if you do not feel any benefits right away.
Just enjoy the process and understand that it is a lifelong endeavor.
Do you meditate? How does it help your trading?
Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we personally use and wholeheartedly believe in. A portion of the proceeds are donated to my charity partners.