Tradng "flow"
Mihaly Csikszentmihalyi named this experience (and the title of his book)
'flow', and he noted that people who are doing what they love to do tend to
have the best odds of getting into this flow. They become totally absorbed
in the present moment, with no distractions (can you say this about your
trading?). He also called flow a mindset that is 'intrinsically rewarding.'
This suggests that we should trade not only for the money, but also because
we enjoy it on a deeper, more personal level. Great traders, like those
shown in Jack Schwager's Market Wizards series of books, show a love of the
trading game itself in addition to the desire to make money.
So how do we get ourselves into this flow state? Csikszentmihalyi defines
six important prerequisites to allow entrance into the zone:
1) Confidence - As a trader, you must have confidence in your trading
method, and believe that you will succeed if you implement your trading
plan. This allows you to place your entries and exits promptly and
thoroughly.
2) Focus - A narrow focus on the task at hand is required to get into
the zone. Fears about the outcome and regrets about past losses do not
exist here.
3) Visualization - A trader pictures what success look like, and gets
in the zone through visual processing of data. Verbal cues can take a
trader out of the zone.
4) Pleasure - When you enjoy trading, it raises the odds that you will
participate fully and maximize your efforts. This increases your chances at
achieving mastery which further increases your enjoyment. Those who view
trading as work will feel a struggle to find great trades, while those who
love trading will feel in harmony with the markets and opportunities appear
more easily.
5) Relaxation - Once you get to the zone, you may tense up as you feel
in new territory. Fear tends to bring you out of the zone. Stay relaxed to
let yourself stay in the zone.
6) Excitement - Some tension can help performance, but too much
intensity will create undue stress and hurt performance.
The other element traders need to get into the zone is Preparation. Larry
Bird hit key shots under pressure in basketball games because he had
practiced so many times in the gym that his shots under pressure felt more
automatic to him, which increased his confidence. Traders must spend the
time necessary to make trading skills "automatic" and create winning trading
habits. When you are totally focused, you cannot be thinking about technique
or strategy. Preparation and practice allow you to develop the skills you
need to stay in the zone.
from Innerworth.com |
