Learn to "Dissociate", by Dr. Van K Tharp

If you think about Peak Performance trading you could look at a market genius and how that person approaches their craft. However, you could also look at a genius from some other area and notice if some of their behavior could be usefully applied to trading. In that regard, I've been thinking about how Einstein would think about the modern markets. I learned that one of the things Einstein did so well was to dissociate. Which means he used imagery to step out of his body and assume another perspective.

This is an exercise in my Peak Performance Course for Traders and Investors Try it for yourself. During each part of the imaginary adventure that follows, notice what your thoughts are and what your experience is like.

Here is the first imaginary scene. See yourself (your whole body) on a movie screen skydiving. See yourself in the airplane with your parachute attached. Now see yourself getting ready to jump. After you jump, see yourself free falling for about ten seconds and then pull the ripcord. Notice what happens when you pull the ripcord; it's like the parachute pulls you up in the air. Now, watch yourself gently floating down to the ground. That's what's called being dissociated.

Repeat the same scenario only now see it out of your own eyes. Notice your hands and feet as you are sitting in the plane getting ready to jump. Now, move over to the door, get yourself ready, and then jump. Notice yourself moving rapidly away from the plane as you free fall. After about ten seconds, see your hand as you pull the ripcord and notice what the experience of your parachute opening is like. Now, feel yourself floating gently down to the ground. That's what is called being associated.

Notice that the scene was the same for both experiences—you were jumping out of an airplane. Yet the images, both of which were imagined, were quite different in each case.

We live most of our lives in an associated state. As a result, everything seems so real. Our feelings seem real. Our beliefs seem like reality. Yet that is simply because we seem to be part of it. What we are thinking seems to be all there is.

As soon as you assume another position—dissociated—your experience changes dramatically. Your thoughts are different. Your experiences are different. Yet is this second experience any more or less real? No, it's just another experience.

This quality of assuming other perspectives, especially this dissociated perspective, is common of many great people in many fields. Einstein is just one example. Great quarterbacks have claimed to have the perspective of being above the entire football field (even while they are playing) so they can see the entire field in a detached manner.

Imagine the perspective that would bring for anyone who could do that.

Michael Jordan has claimed to be able to imagine himself floating over the basketball court and from this perspective see everything that is going on. Perhaps that explains why he just seems to know where everyone is. Again, think of the advantage that such a skill would give you.

I did two interviews with former fund manager, Tom Basso. Jack Schwager who gave him the nickname, Mr. Serenity, interviewed him in The New Market Wizards. In my interview with Tom, he revealed that his ability to dissociate was one of the secrets of his success. Here's a little of what he said:

"In situations where I felt I needed improvement or in which I wanted to improve my interactions with other people, I would just play key events back in my head—figuring out how others handled the situation…I've always thought of it as some Tom Basso up in the corner of the room watching Tom Basso here talking to you in this room. The funny thing about this secondary observer was that as time went on, I found the observer showing up a lot more. It wasn't just at the end of the day anymore. As I got into stressful situations, as I started trading, doing more interacting with a lot of people, getting our business off the ground, dealing with clients, etc., I found that this observer was there to help me through it. If I felt awkward or uneasy, then I was able to watch myself do it. Now, I have this observer there all the time." — Excerpt, Course Update #9, December 1990.

A fundamental presupposition of NLP (Neuro Linguistic Programming) is that if one person can do something, then everyone else can do it too. Since being able to move to another perceptual position is one of the critical aspects of genius and greatness, it's important to start practicing.

Here's an exercise for you. At the end of the day, replay the day in your mind, especially critical junctures in the day. Do it from a disassociated point of view in that you watch yourself going through the day. Once you've completed the exercise, write down what you notice about yourself.

Last week we talked about two ways that you can imagine something. First, you can imagine yourself doing it from the perspective of being in your body. The example I gave was sky diving. Imagine yourself jumping out of an airplane and actually sailing through the air. What's it feel like doing that? See yourself pulling the rip cord. See the ground below you as you move toward it.

The second perspective is to simply see a moving of yourself doing the same thing. Now watch yourself doing the same thing only this time you are seeing a movie of yourself sky diving. This second perspective is the dissociated one. Even though both images are made up, the first one is attached to your feelings, while the dissociated perspective is now made up.

So how can you apply this to your trading? Well, here is a simple exercise for you. When you feel that you are not trading well. Simply stand up and walk away. Move to a different part of the room and observe yourself. Notice what you looked like sitting there in the state you were in. What did you do with your body? How did you hold yourself? What did your face look like? What was your breathing like?

And after you've observed all of those things, then notice how you feel now. You are no longer in that body. Instead, you are simply watching yourself from a dissociated perspective. All the feelings and emotions should be gone. If they are not, then make sure that you are watching yourself.

Now ask yourself some questions? What resources do I need to be able to handle this situation like a market wizard. Do you need confidence? Do you need the courage to get out? Do you need some perspective?

And how would you look if you had those resources? Imagine yourself in the same situation with those new resources. See yourself sitting there full of those resources and notice how much different the situation is when you bring those resources to the table.

Chances are it is quite different. Now comes the real application of this. Go back to the situation and become what you were just imagining. What is that like? Chances are its an entirely different perspective on the situation. And chances are that you are now performing at a totally different level.

That's the power of dissociation. Now practice this technique at least once a day for the following week. The more you do it, the easier it will become for you.

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Van K. Tharp, Ph.D.
TradingEducation.com