One of the core principles of eastern philosophies is that we need to be at peace with the truth that the world will never move, act, or respond exactly the way we want to. The wisdom here teaches us to focus our attention on the things we can control, which is our REACTION and RESPONSE to the present moment. When we can respond to the present moment in peace, gratitude, and acceptance, we get rid of all emotional noise and we can fully immerse in any endeavor. In this moment, we achieve the state of FLOW.
The state of Flow can be experienced in any activity, including stock trading. The process of trading in the stock market involves a lot of variables that we have NO CONTROL over. Sudden economic turmoil, disease outbreaks, spiking inflation, and other abrupt black swan events may all happen with little to no warning. As such, one of the trader's edge in the market is to be able to have a stable emotional and psychological foundation to filter the noise and read the market clearly.
In this post, we will provide a basic guide on how you can consistently achieve a state of Flow when trading in the stock market.
The State of FLOW
The state we call Flow is a momentary period of effortless action. It is a distinct condition of the mind where it becomes fully immersed in an activity. When in this state, you are able to perform at your absolute best and produce quality output in the least amount of time.
The state of Flow is characterized by the following:
Clarity and peace of mind
Confident execution
Mind and body act as one. There is no buffer in terms of thinking and decision making.
Total focus
Most people have already experienced a state of flow at some point in their lives. It usually happens out of nowhere and quickly ends as soon as distractions come in. But when a person starts to gain a deeper sense of awareness, being able to achieve Flow becomes a repeatable process. When we can reliably leverage this state, we can regularly perform at our best and achieve high impact results in a short amount of time.
Effortless Trading
The state of FLOW in stock trading is experienced when a trader who has done rigorous preparation is able to respond to the present and future opportunities in the market. In this moment, a trader can recognize the most profitable patterns and signals (if there are any) and respond to them with confidence. Trades made during this state are usually winning trades due to the fact that it aligns perfectly to the strategy and is bought or sold at the best possible time.
Achieving FLOW as a Trader
In reality, only a handful of traders are able to attain Flow in stock trading. Why is this the case? Well, general study shows that 90% of traders lose in the market. This means only a meager 10% have a degree of success in the market. In this elite group, we can see common denominators in terms of habit and mindset that are deemed as pre-requisites to be able to experience the state of Flow.
The illustration above shows the common practice among successful traders. Those who are serious in stock trading have a strict routine of regularly analyzing the market and fine tuning their strategy. As such, they know exactly what they are looking for when they look at the charts. There is no room for uncertainty.
It is very important to remember that you cannot attain Flow on command. It will naturally happen when the conditions are right. Knowing this, a trader has to build healthy habits and routines that increase the chance to trigger the Flow state.
To complement their work ethic, successful traders usually have some form of meditative practice to reflect on their performance and achieve mental and emotional stability. A trader who is NOT clouded by emotions can execute the trade strategy with discipline and confidence.
Building the Habit
For the average trader, here are some practical tips to integrate to your weekly routine to build the right conditions for the Flow state to trigger:
Follow a balanced schedule to keep yourself organized.
Do a standard breathing exercise for 3-5 minutes to clear your head and start in a relaxed state.
When in a state of relaxation, start writing down your trade goals for the day, week or month that you want to achieve. Keep it SMART.
Do not look at social media or forums for opinions and sentiment. Your fundamental research and technical analysis is more than enough. Filter the noise. It is just the chart and you.
Be realistic and grounded in your strategy. If there is no profitable signal and setup then you DO NOT NEED to make a trade. Just wait patiently until the proper signal and pattern appears.
Keep a journal to write your ideas and declutter your mind. Write your mistakes, your wins and areas you want to improve on as a trader.
Have some form of meditation. Whether it is a focused meditation, walking, prayer, or any reflective activity. The goal is keep your thoughts aligned to the truth and channel your attention on things that matter the most.
Be consistent.
In a Nutshell
Every endeavor and profession can leverage the strength of Flow to be able to achieve maximum productivity. In stock trading, this will allow a trader to effortlessly read the market and make make the right response at the right time.
Achieving the state of Flow has pre-requisites. In the context of stock trading, a trader needs to be always prepared. Hard work knows no shortcuts. When you put in the work then your skill level will exponentially rise. When you match skill with a stable emotional and mental foundation, then you can filter the noise and focus your attention on the current and future opportunities in the market.
Preparation + Reflection + Discipline = Success
Discipline and reflection will allow a trader to prepare for opportunities. Successful traders consistently apply this which is why they are able to make big consistent returns in the market.
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