Skip to main content

The Surprising Reason We're Not In The Zone When We Trade

If you click on the graphical display above, you'll see the results of a very simple demonstration using heart rate variability biofeedback.  (I used the Heart Math Freeze Framer biofeedback system for the demonstration; the newer version is called em-Wave.) 
In the demonstration, I first attempted to enter and stay "in the zone" by regulating my breathing and sustaining focused concentration.  Notice the regular sine-wave rhythms in the top display.  The finger sensor to the biofeedback unit is picking up a high degree of "coherence" in the variability of my heart beats.  This coherence has been associated with greater emotional well being, improved cognitive performance, and enhanced access to intuition.  

The bottom left display shows that I am functioning "in the zone" during this period of coherence.  Over that period, almost all my scores fall into the green (high) coherence category (bottom right frame).  When hooked to the unit, you can see your rhythms, whether you're in the zone, and whether you're scoring in the green area.  All of these give you instantaneous feedback to let you know if your self-control efforts are succeeding.

Notice the change in my rhythms (top panel) about midway through the demonstration.  At that point, I began talking aloud about financial markets in a stream of consciousness fashion.  I was *not* talking about anything stressful, but notice that simply taking my mind off the self-control efforts was sufficient to get me out of the zone (bottom left panel) and put my readings in the red zone.

This is very important, because it suggests that it doesn't take frustrations and losing trades to nudge us out of our zones.  Our normal daily routines take us out of our optimal states of consciousness.  Once we begin talking, walking, watching screens, etc., we are no longer in that heightened state of focus and self-control that represents our performance zone.  

You can see that I was in the zone from the very beginning of the demonstration.  It takes me little time to get into the zone, because of years of practice.  Note, however, that even this practice was not sufficient to keep me from leaving the zone once I went into the talk-aloud mode.  Where the practice has helped is in returning to the zone once I find myself distracted, frustrated, etc.  That is useful, but it doesn't address the more basic problem:  our daily work routines are incompatible with our optimal performance zone.  

If this is the case, taking trading breaks and preceding work days with meditation are helpful, but the real challenge is sustaining the zone while we are making decisions in financial markets.  This would require a very different work routine: one in which we are minimally distracted, minimally active, and highly self-controlled in our breathing and focus.  Online chat?  Switching from screen to screen to see what is moving?  Little to none of what we usually do when we're trading keep us in a zone and indeed take us out of our ideal state.

Nor would writing in journals or talking with trading coaches help the situation.  Only a change in our trading process and training to sustain the zone in real time would enable us to make decisions from an optimal state.  This is truly a frontier of trading psychology.

Further Reading:  Heart Rate Variability and Self Control in Trading
.

Comments

Post a Comment

Popular posts from this blog

Austerity-A Fancy Word for Destitute.

The reason for this post is not for the folks who have been caught in the first wave of personal economic hard reality, but the next wave. Regardless of the optimism espoused by grinning leaders and sycophant press, we are entering the final stage of global economic collapse. It began in 2008 and was forestalled for five years with fudge putty, but the weight of global indebtedness cannot be propped any longer and the final crunch is imminent. Austerity measures herald the final throes.  Indications of coming austerity.   Austerity measures are the final last ditch effort, futile or not! Back in the day many of us old-timers went through periods of "hard-times". In retrospect I realize there is no comparison to yesteryear hard times and today's version. Back then, expectations were never very high for the working class, there were no sophisticated systems or conveniences anyway. In fact the difference between being "set" or not was about having treats or not. Si...
Post a Comment
Read more

Terrifying Arctic methane levels

A peak methane level of 3026 ppb was recorded by the MetOp-B satellite at 469 mb on December 11, 2021 am. This follows a peak methane level of  3644 ppb  recorded by the MetOp-B satellite at 367 mb on November 21, 2021, pm. A peak methane level of 2716 ppb was recorded by the MetOp-B satellite at 586 mb on December 11, 2021, pm, as above image shows. This image is possibly even more terrifying than the image at the top, as above image shows that at 586 mb, i.e. much closer to sea level, almost all methane shows up over sea, rather than over land, supporting the possibility of large methane eruptions from the seafloor, especially in the Arctic.  Also, the image was recorded later than the image at the top with the 3026 ppb peak, indicating that even more methane may be on the way. This appears to be confirmed by the Copernicus forecast for December 12, 2021, 03 UTC, as illustrated by the image below, which shows methane at 500 hPa (equivalent to 500 mb). Furthermore, ...
Post a Comment
Read more

Women and children overboard

It's the  Catch-22  of clinical trials: to protect pregnant women and children from the risks of untested drugs....we don't test drugs adequately for them. In the last few decades , we've been more concerned about the harms of research than of inadequately tested treatments for everyone, in fact. But for "vulnerable populations,"  like pregnant women and children, the default was to exclude them. And just in case any women might be, or might become, pregnant, it was often easier just to exclude us all from trials. It got so bad, that by the late 1990s, the FDA realized regulations and more for pregnant women - and women generally - had to change. The NIH (National Institutes of Health) took action too. And so few drugs had enough safety and efficacy information for children that, even in official circles, children were being called "therapeutic orphans."  Action began on that, too. There is still a long way to go. But this month there was a sign that ...
Post a Comment
Read more