Each situation, each thought, each word, each feeling, is just a passing memory” P. Chodron

What if our trading psychology allowed us to trade with the above quote in mind? What would it be like if we traded as if thoughts and feelings that we have about the market and our trades were simply fleeting events that had little significance? Take a moment to think about this. Thoughts and feelings are not reality. If we treated each thought and feeling as if it were a passing memory rather than something we feel compelled to act on, how would our trading be different?

Trading Would Be Different

Rather than cutting a winner short when our mind says, “You better take the (small) profit because the market might come back against you,” we note that thought for simply what it is: a few words that quickly become nothing more than a fleeting memory. If that were the case, then we might hold the trade to its profit target. And, rather than hesitating when we have the fearful thought, “if I enter this trade I’ll have a loss,” we note that thought for what it is (again, a string of momentary words) and we take the trade.

If traders weren’t governed by what their mind and feelings were telling them, then their trading might improve in several ways. For example, they would trade with less stress, they would have less fear in taking trades, they would take well-defined trades without self doubt, and they would position themselves for greater profits. These positive results could be accomplished by treating each thought and feeling as simply a passing memory rather than a truth we must obey.

Mindfulness For Traders

Mindfulness helps us do exactly that – see each thought and feeling as a short-lived memory, nothing more. It is a skill known as “defusion.” Defusion simply means a capacity to decenter from thoughts and feelings. Rather than looking through our thoughts as if they were tinted glasses coloring our world, we hold our thoughts out at arm’s length, so to speak, and look at our thoughts rather than look through them. Mindfulness cultivates the mental space which allows us to do just that.

Benefits For Traders

The big advantage is that when mindful, we can take action on what matters most to us in a given trade rather than slavishly respond to what the mind says. That means taking important trading actions such as holding onto a winning trade, setting a stop, or pulling the trigger on a sound setup rather than becoming hijacked by thoughts and feelings and doing things we later regret.

Mindfulness Tips

To get started with mindfulness, follow these guidelines:

• Make it a daily routine and practice when you won’t be disturbed.
• Sit upright and comfortably, limbs uncrossed – a chair is fine.
• Watch your breath as your abdomen rises and falls or as the air flows across the tips of the nostrils. Keep your focus on the breath, that’s all there is to it.
• Notice how the mind wanders repeatedly. Become aware of when the mind wanders and bring it back to the breath. This is the task of mindfulness.
• Keep sessions 5-10 minutes to begin; extend the time with experience.

Keep in mind that you can be mindful anywhere and in any situation. Simply note when your mind has slipped off of whatever it is you are engaged in and gently return it to the present. Mindfulness can be a powerful trading psychology skill when developed through practice.

And, to help you develop the skill of mindfulness, I’d like to invite you to claim your FREE, Instant Access Guided Mindfulness Exercise, designed for traders at http://www.tradingpsychologyedge.com/44.html.