Meditation and Trading

This is a bit lengthy, but I hope it is helpful to people. Good things sometimes come in big packages :)

As might be evident by the title of this blog, I am a big fan of meditation and its implications for human health, sanity and performance in all aspects of our life. As you may also have noticed by the title and content of this blog, I am quite fond of short term trading. I have not been trading for very long, but I think I can assume almost all traders have experienced the same things that I have as a newbie.

When trades go well, I often experience happiness, contentedness, relief and sometimes a little too much assurance. When trades go against me, I often experience anxiety, dread, sadness, anger, self pity and probably most other negative mental states that you can think of. After experiencing a string of losses, I have noticed that my mental energy is not so much directed towards the process of trading itself, but it is often mostly involved in the mental story lines and drama surrounding the sense of failure or inadequacy of my performance. The trading information coming into my senses is only receiving part of my attention, but an enormous amount of energy and attention is involved in the personal story of “me” and how this situation is affecting “me”. If we are able to notice this, then this is where meditation might start to be seen as something that could be enormously useful to us as traders as well as human beings.

Meditation is a word that has many connotations in North American culture. When I speak to most people about meditation they usually relate it to things like sitting in a cave somewhere, doing complex poses, sending our mind off to some trippy high state, or just spacing out and escaping from the world. Some associate the word meditation with relaxation, calmness or acceptance. There are probably as many opinions on the word as there are people.

Something I find interesting is that we are all meditating all of the time, whether we realize it or not. Every human on this planet is, and always has been, meditating every instant of their life. This is true whether we are sitting on a cushion in a monastery or laying unconscious on the bar floor. It is true when we are sleeping, when we are laughing and when we are just zoned out. It even holds true when we are absorbed in the order flow of a trading display. This is also true for every animal whether big or small. Every being with consciousness is meditating at every instant, they always have been and always will be. This might sound strange to some people, but I think to discuss the topic of meditation it will be useful to know how the word applies to what I am writing here.

The Tibetan word for meditation is “gom”. This word is translated as familiarity. We are always familiarizing ourselves with something. When we practice generosity, we are familiarizing ourselves with what it feels like to be generous. When we are angry, we are familiarizing ourselves with the feeling of aggression. This is true for everything that meets with our mind, all of our experiences are perceived with crystal clarity by the mind. Drowsiness and confusion are experienced by the mind the same way. The entire spectrum of what we perceive to be inside (thoughts, emotions, opinions) and what we perceive to be outside (colours, sounds, smells, etc.) all must meet with our mind, and when experienced by the mind we are becoming familiar with that particular aspect of our reality in that particular moment. This familiarity is really the only possible thing for our mind to do. By definition mind is that which knows. If we saw a new colour, we would be awestruck, but after the first time we have gained familiarity, our mind has met it already.

Speaking for myself, and most of the people on this planet I presume, the thing that is most familiar is restlessness. Restlessness is when the mind wants to be somewhere other than where it is now. We are constantly searching for happiness, but the search for happiness implies that we need to find it somewhere else. The need to move somewhere else is restlessness, so in essence we are constantly restless because we are constantly striving to be happy. I am not knocking happiness, but wanting to be happy is restlessness which is pain. I think that this is something that most of us are experts at, the thing that we have been meditating on or familiarizing ourselves with the most: looking elsewhere for happiness. Another word for this constant search for happiness might be distraction. We are all experts at distraction. Distraction implies time, because distraction means that we are not present in this moment, but off in the memories of the past or the fantasies of the future. Our minds are almost always in the past or the future, but rarely in the present moment.

When we meditate we are familiarizing ourselves with something. We can choose what we want that to be. When I am meditating on distraction, my life is constantly in the past or future and I have little or no experience of my actual life at all. I wake up and think about going to work. In the shower I do not really enjoy it because I think about what is for breakfast. When I eat breakfast I do not enjoy it because I am thinking about leaving on time. When I am commuting I am stressing about work or rehashing something from the past. When I am at work I am thinking about how nice it would be to be going home. When I get home I am dreadful about having to go to work tomorrow. On and on. During that time I gave my happiness away all day long, because I was too habituated to looking for happiness elsewhere, when it was really with me all along.

When we sit on a cushion and meditate (the more common usage of the word) we are deciding to direct our mind's meditative capacity towards something useful: the present moment. We put the typical distraction meditation on hold and watch our mind. When the mind goes to the fantasy of the future or the memory of the past, we gently bring it back to the present moment. The mind is so familiar with the habit of distraction that it is only natural that it will go there again and again, but we practice just noticing and gently placing our mind back in the present moment. We can use our breathe, or a candle, or any meditative object that resides in the present moment as our anchor. When we forget our practice of meditating on the present moment, and we find ourselves imagining a beach in Brazil, we suddenly remember and gently come back to the present moment. Over time, if we work at it, we will slowly decrease our allegiance and habitual tendency towards distraction and we will increase our tendency towards remaining in the present moment. The more we are in the present moment, the more time we spend noticing the sources of happiness that were always with us, and the more available we are to help others. We notice our destructive habits and that noticing breaks them down. There is no mental condemnation necessary. New skilled and positive habits will fill in the holes left behind.

This is not to say we will never have pain if we meditate. We are likely to feel the pain more intensely because we are not cashing out of the situation on a mental level. But this pain is no longer something that we have to run away from, it is just another part of life. We might even come to respect and actually love our pain because it has something to teach us and it helps us to sympathize with the pain of others. I have been lucky enough to meet some amazing people who told me that their pain was a great cause of joy in their life because it helped them love others more deeply. Their pain actually made them happy.

I know two former students of a late famous Zen teacher, Suzuki Roshi. Suzuki Roshi had fallen ill. They told me that he was taken to the hospital and they thought he was infected with tuberculosis. He had to wear special protective gear so as not to infect any of his students and he was not able to eat with them for fear of contaminating the food of other people. When the treatment was not working and he had to return to the hospital, he was correctly diagnosed with terminal cancer and had been told that he only had a few months to live. He came out of the office with a giant smile on his face. These two students asked him why he was smiling and he said “because I have cancer.” They were horrified and said, “Why are you so happy?” He relied, “Because we can eat together again.”

What does this have to do with trading? When the 5th straight losing trade in a row happens, it is likely that some pain will occur. Some mental anguish is likely to arrive. At that moment we can make a choice. We can try to avoid the pain and think of the past or future, but that doesn't ever work. Usually the intensity of the emotion spurs a thought about it, and we cling to the thought to escape the emotion, but then that thought brings more emotion, so we think again, and so forth. This is how our thoughts run away and we end up freaking out over something small. If we just allow that pain to arise in the moment, and if we meet it with a sense of acceptance and even love, then the pain will be experienced once and we will move on. Happiness deserves our respect and pain does too. This is how I think we can live a whole life, and I think it would be one with more dignity.

I am by no means an expert in either trading or meditation, but I think that they can go hand in hand. We can meet the challenges of this crazy profession with mindfulness and allow them to move us in what ever way they need to in that moment. We can maybe lessen or even drop our agenda and our need to be right. We can allow the market to do its thing and not have an adversarial relationship with it, but see ourselves as simply an extension of that market. If profits are there then we take them, and if anticipated losses are there then we take them. It is simply our job to follow the plan and let the market exist with none of our ideas about how it “should” be, because that is the reality of the situation anyway. The market will do what it wants and so will the world around us.

Mingyur Rinpoche: What meditation really is

Suzuki Roshi Video

Sogyal Rinpoche: What meditation Really is.

Sean.