It's A Heart-Mind Game... Are You Ready?

Do you think it is possible that your trading method/edge might need tweaking?

FX4

Here's something on exercise and trading from The Van Tharp Institute:

Why Exercise Can Help You Trade Better

by R.J. Hixson

Aerobic Trading
There’s a long-held belief that if you want to improve the health of your body, you should exercise, and if you want to help your brain, you should study or cause it to think. In the last two decades, though, a new paradigm has emerged. Scientists have realized that physical exercise is good, not just for the body, but for the brain too.


The Kids in Naperville

A few months back, a friend told me about a school district outside of Chicago that, without changing anything in the curriculum, saw a dramatic rise in test scores after it reworked its physical education program. That sounded moderately intriguing, but after reading a book that documented the story—Spark, by John Ratey, MD—I became fascinated.


John Ratey teaches clinical psychiatry at Harvard Medical School. He decided to visit schools in Naperville, Illinois after hearing about the district's unique exercise program, in which PE instructors hand out heart rate monitors and allow the kids to participate in any one of nearly two dozen activities. Choices include rock climbing, Wii games, 3-on-3 basketball and more, all with one purpose in mind: to engage students in activities that keep their heart rates in the aerobic exercise range for the duration of the class. Within the first few years of instituting this new program, Naperville’s test scores improved dramatically—and not just nationally, but internationally. Other school districts have reproduced similar benefits with similar programs. These schools are proving in the classrooms what scientists are confirming in the labs—that exercise helps the brain perform well.


Moving to Survive

Perhaps as interesting as the science behind the findings are the possible hereditary reasons why exercise helps us learn and think better. Scientists hypothesize that the role of learning in humans evolved over the last million years to help us find food. For most of our genetic history, finding scarce food involved motion–walking 8-12 miles on most days across the savanna to find or follow food sources. In the last 10,000 years or so, however, food cultivation has eliminated the need for humans to move anywhere nearly as much. Now, eating merely requires that we take a few steps to our plentifully supplied kitchen pantries and refrigerators. Our DNA advances at an evolutionary pace, much slower than the comparatively rapid pace of human technological developments. In the future, humans may not need to exercise to perform at peak levels, but in the meantime, it seems that peak performance requires some aerobic activity.


The Science

Broadly speaking, exercise helps the brain in a whole host of ways. Most notably, it helps balance the production of neurotransmitters—chemicals that help brain cells communicate and affect mental states such as calmness and attention. Ratey equates going on a run to taking a little bit of Prozac and a little bit of Ritalin—a prescription anti-depressant and a prescription stimulant that, if taken together (not advised), would produce a state of calmness and focus.

Exercise also helps in the production of a category of proteins called neurotrophins. Scientists have only come to understand these proteins in the last 20 years or so. Neurotrophins build and maintain the existing “infrastructure” of the brain—nerve cells and synapses. One of these neurotrophins, BDNF, promotes neurological functions so well that Ratey refers to it as Miracle Gro for the brain (Miracle Gro is a popular garden fertilizer in the US). Aerobic activity actually promotes the production of this protein—this “fertilizer”—for your existing brain cells.

Surprisingly, exercise even helps stimulate the growth of new brain cells. This process, known as neurogenesis, was thought impossible by many in the research community only a decade or two ago. Now, scientists have proven that neurogenesis occurs at a slow, steady rate over a lifetime and that exercise actually increases that rate.
Moving up one neurological level, aerobic exercise helps improve learning and cognitive processes. Exercise helps the brain at the process level specifically by:

 

1. Improving alertness, attention, and motivation
2. Preparing and encouraging nerve cells to bind together throughout the brain
3. Spurring development of new cells in the hippocampus—the part of the brain that plays a key role in memory management

What to Do?

Ratey explains that scientists aren't sure yet what the minimum or optimal amounts of exercise are. He does state, however, that you need to get your heart rate up above 65% of your peak level for 30-60 minutes pretty much every day. A workout at 65% maximum is medium intensity and probably involves some heavy breathing and sweat—but nothing that will leave the average person exhausted or gasping for breath. Ratey recommends a mix of aerobic intensities with some days at 65% and others somewhere between 75% to 85%, where you feel like you’re working out pretty hard. In addition, he recommends some weight training, although the links between anaerobic activity and brain function improvement are less highly correlated. Finally, he advocates doing complex motor skill activities such as martial arts, tai chi, yoga or dancing about twice a week. These kinds of group “exercises” help stimulate the interaction of multiple parts of the brain, coordinating challenging bodily movements and social aspects of interacting with other people.


Other Benefits

Across the board, scientists are verifying that aerobic exercise can help people of all ages in all sorts of conditions: it can reduce stress, battle depression, end addictions, reduce the effects of dementia and Alzheimer’s disease and minimize female hormonal imbalances, including those that occur after childbirth and during menopause. These are more than bold claims; scientists are confirming every one of them.


Implications for Traders

Van likes to say that trading is 100% psychological. He’d probably be okay with adding one caveat: a healthy psychology requires a healthy support system. Exercise helps you perform at peak performance levels, not only physically, but psychologically as well. We talk about this in the Blueprint workshop, and Ratey’s book adds a lot of evidence to support what Van has long said on the subject.

How might a trader take advantage of this knowledge? Well, what if there were ways to mimic the activity for which our bodies are designed in order to perform at peak levels? Several years ago, the Wall Street Journal ran a photo of a guy in a shirt and tie looking at some monitors over the front of the treadmill on which he was walking. Apparently, he spent his days managing a hedge fund while walking on the treadmill at a slow pace of about a mile per hour. I also know of a prop fund in Chicago that allows its traders the option of trading while walking on a treadmill. Not only that, it has a walking path around the facility so traditional desk traders can get up and move around (no doubt some of the firm’s principals know about the Naperville school system’s results). These ideas seem a lot less kooky to me now that I’ve read Spark and its references to numerous academic papers documenting research results.

Let's say, though, that a treadmill desk is not an option for you. Is it possible for you to work out every morning before the market opens or at lunch? I know of one trader who goes outside for a short intense walk several times a day—especially after big trades.
In several ways, exercise can make your trading better and improve your execution of trading systems. For a trading edge, figure out some way to raise your heart rate on a regular basis through aerobic exercise.

Trading firms recruit a lot of former athletes and military, from what I've read and, a few times, know.
Also, exercise helps make mind-body connections and grow kinaesthetic learning (VAK model). Gut instinct, where, as I gather, one feels the pattern one observes, is also whole-body pattern or action pattern, just like other neural plexuses in body -- tops being the brain, of course -- can generate a pattern.

That's all okay for chart study, and may balance the chemicals some.
But I don't think it'll cover entirely for the trade.

Here's a post that's effective in capturing what I mean. Your advice, also noted earlier to me about trading rules, is more specific.

It's tempting to say those chemicals will expand one's conscious awareness, slow down an overwhelmed brain, and train stimulus-response toward efficient moves. But boundaries show that stimulus-response is necessary to entrain exercise, so it's a circular argument.

Of course, there's also discipline / hard work and tactics/strategy, why those firms hire them:
A good risk/reward factor.

I can certainly understand why trading firms would hire successful athletes or military personnel...as you have said...for the benefit of the mental conditioning process they understand. Those mind -body connections are real.

Gut instinct, where, as I gather, one feels the pattern one observes, is also whole-body pattern or action pattern, just like other neural plexuses in body -- tops being the brain, of course -- can generate a pattern.

These firms are probably realizing that there is some advantage to getting traders to this level.

It's tempting to say those chemicals will expand one's conscious awareness, slow down an overwhelmed brain, and train stimulus-response toward efficient moves. But boundaries show that stimulus-response is necessary to entrain exercise, so it's a circular argument.

Chemicals...natural body chemicals, herbal products or otherwise? Please elaborate a little...

But boundaries show that stimulus-response is necessary to entrain exercise....not getting your point clearly here. Maybe a link would be helpful...don't know.


Glad you mentioned that firms are doing this .

FX4

You can only be dominant over the boundaries you are entrained to respond to,
until you expand to other types of (game) boundaries,
and then to the skill of stimulus-response with a certain, simple (and thus game-like) set of conditions (boundaries).
Chemicals make dominance, i.e. dopamine. Other chemicals too, I guess, where ever your body gets it from.



That's all I meant.
Anyway, was framing your exercise etc. post a bit for context. To what I've read, charting for trades is a kind of game.

Hi again Ha-Pattern,

You can only be dominant over the boundaries you are entrained to respond to,...

Glad you made that point! It is very true. That is why an athlete who excels in one area has to be trained to excel in another.


Anyway, was framing your exercise etc. post a bit for context.

An appreciated and well-framed comment. Thanks.

FX4

P.S. Going back to your other post in a bit .

Hi again,

Thought I'd post a little something on Dopamine from Psychology Today...

Dopamine

Dopamine is a neurotransmitter that helps control the brain's reward and pleasure centers. Dopamine also helps regulate movement and emotional responses, and it enables us not only to see rewards, but to take action to move toward them. Dopamine deficiency results in Parkinson's Disease, and people with low dopamine activity may be more prone to addiction. The presence of a certain kind of dopamine receptor is also associated with sensation-seeking.


Is this a heart-mind "game" or what .

Since there are so many dynamics that can affect a trader, and the body-mind can do some things "automatically" based on a trader's actions, it might be helpful to find a specific trading path (not just talking about a system here)...more of a routine, stick to that, and then work on the other variables to reach optimum trading performance, while the body does its part in the process.

What do you think?


FX4

Subby got an email from NeverAgain late on Friday. He's just reading it...


Hi Subby,

Couldn't make our Friday meeting today. Not superstitious or anything 'cause it was the 13th...just had alot happening and I knew I was not in the frame of mind to focus like I normally would.

Would definitely want to connect next week. Will have to get back to you on the day though. How was your trading week?

Regards,


NeverAgain

Subby just sent an email back to NeverAgain...


Hi NeverAgain,

Glad you had a productive week. I'm not superstitious either, so no worries there .

Had a profitable week, nothing too aggressive yet though. Here is my balance curve.

Whenever you have time next week I'll be there GW.

Enjoy your weekend,

Subby

Hi again Ha-Pattern,

These boundaries can mean so much to a trader. Most sports, let's say weight training have physical boundaries of conditioning...like x number of pounds. But for traders, it can be a dollar amount in the form of a position size, or even a gain on a trade that once a trader gets comfortable to produce let's say 20 pips, to go higher can require another "entraining" process. The thing is, it is a mental and emotional boundary and not really a physical one as such, which could make it a little more challenging for a trading coach, especially if the trader is the mentor/coach.

Traders trying to go to another "pip level" in profit will likely feel the emotional-mental strain....even if they are letting the trade run without staring at the screen, they'll still feel the heart-mind pull. But once they get used to it...and the entraining process has been completed, they'll be good to go...until they want to be stretched to the next level.

On the flip side, if a trader is "entrained" to accept a certain amount of loss and is conditioned to do so, winning can feel awkward. Some real coaching might be needed to help a trader get out of that rut. Not sure...just thinking it might.


FX4

I got another for you,
one more attainable for the average would-be trader.

It's mindfulness.

I'd needed a crossover between brain chemicals and emotion,
and found the Buddhist list of five hindrances: desire,aversion,sleepiness,restlessness,doubt .
On mec, maybe aversion on the positive x axis, desire on the negative x axis, restlessness on the positive y axis, sleepiness on the negative y axis, and doubt at the 0,0 of x,y axis; this'd make mec's 'emotions' compromises or extremes, and would fit more in line with lots of them such as the googled 'cycle of market emotions' has. Sleepiness is serotonin; the rest, I don't know. Internal homeostatics may also be related.

Well, it's not an exact match. But then the list has a right to be of its own.
Here's my reasoning:
Of course, a thousands-year-old list of a religion that practices mindfulness meditation should work. Being present in trading is essential, as it's over fast and, while it can be simple to do, it's much easier to mess up with emotions etc.
Moreover, mindfulness is likely common in Japan, what with their famous factory production and quality rates, high-achiever social structure, and common forex trading (; ) ).

That's a whole lot of crass generalizations.
What it did for me, was work.


I drew on the screen my gut (or anywhere in the brain or body) trace, which one can get maybe through talking about how one feels at the moment and then tracing the pitch,volume and rate. Then I drew what I believed at the time to be the opposite of that gut trace, as an exchange with the first. Finally, I labelled which hindrance I felt was a result of this exchange.
Then, during my trade, I was mindful of how the hindrance affected my performance.
I find that if I identify the opposing body pattern from its being an 'emotion' on the (my simplified social/hindrance-inclusive) mec, then I can think through the pattern without having to draw it and then get and be mindful of the hindrance that way. Reading one's body signals for hindrances helps, too.

That's it! I felt a new calm and energy after trading several times with it
-- I don't usually say anything about an approach that new to me --,
whereas I usually underperform and feel energized except in a bad way.


Who knows, the overall approach of how I apply the list to trading may not be effective in the long term; just thought I'd run the idea across. Second try in, I'm already modifying it.
I don't think I need to tweak my technicals and trading them, so much as let myself do as good a job at technicals and trading them as I'm capable of.

A good next week of trading to you.

This started as a PM between 4x4newbies and I when I returned from Vegas. Enjoy your week.

Something interesting I learned and was right in line with your thread. A family member invited me to go to an Alcoholics Anonymous meeting.(I never abuse it, she just wanted some company). So we hopped on the monorail and went to the Riviera. Ever since I read "Trading For a Living" by Alexander Elder, I have wanted to go to one of these meetings. He recommends all traders go and substitute something like "Abusive Trader" every time someone says Alcoholic.

A particular individual was sharing that the hardest thing to accomplish to quit drinking was only about 18 inches. The approximate distance between the brain and the heart. When you know in your heart that you are an alcoholic and need to change then results happen.

So it is with traders. 18 inches is all it takes to believe in your heart that you are a trader, then the first million will be easier then the first thousand as Jessie Livermore had said. So for me that one hour meeting was worth the whole trip. Such a simple little analogy but communicates so much.

This upcoming week I will be able to ease into the market again. Work is slowing a little at least enough so I can have some breathing room.

Ha-Pattern,

That was some good insight on that hindrance idea. I hope viewers clicked the link and read some more on those hindrances. I went to the link and found something that would have been very helpful several months ago. Here it is...

3. Sleepiness: When we are tired, it is difficult to be alert and aware of the present moment. There are different kinds of sleepiness to notice within your own experience: actual physical fatigue and resistance to something that you are experiencing in your mind or body. Sometimes, when we are experiencing fearful or painful emotions, the body reacts to this internal resistance through a sensation of sleepiness. It is helpful to begin practicing how to distinguish between the two in your own life.

I vaguely wondered about that, why sometimes I would feel sleepy when it was time to trade. Sometimes it was because I was really tired, but other times made me wonder what else might have been going on. This answered it!

I am very glad to hear of your calm while using this and also good news that your technicals are okay. Seems like you may have made some more breakthroughs there.

What was interesting was the PM from Rufus, which he posted just after your post.

It brings up the idea of belief, as expressed by the AA member (the distance between the heart and brain...believing that you can quit) vs. doubt. One of the hindrances you mentioned was doubt.

So for a trader where is the area of doubt? In themselves? In their system? Once they locate what's feeding it, that should also help to bring them out of that trading pit so to speak. In the case of the trader, believing that you can trade successfully is a much more powerful place from which to operate than doubt, or just hoping that you can wing it.

Thanks for sharing...and thanks Rufus for posting.

FX4

Subby and NeverAgain are scheduled to meet tomorrow afternoon. Let's see what other trading exercises NeverAgain's got up his coaching sleeves.
FX4

Here's the latest (via email) on the meeting with Subby and NeverAgain:

Hi Subby,

Was wondering...can we meet for dinner at the Traders' Lounge & Restaurant about 8pm tonight?

NeverAgain


Subby has already confirmed, so it's all good.

FX4

Subby and NeverAgain are at their dinner meeting at the Traders' Lounge & Restaurant.


Subby: This place is packed! I'm surprised we got a table.

NeverAgain: It's Friday and traders usually go somewhere to get a well needed break. I like coming here because the food is great, free of harmful chemicals like MSG, and the desserts are fabulous...not loaded with sugar or artificial sweeteners. I also like the fact that they don't serve lots of heavy alcohol. Sometimes, if a trader has had a bad week, they can hit the booze hard.

Subby: That's really sad because it doesn't solve anything long-term. At least that's how I see it. Glad we are able to get a chance to hang out a bit.

NeverAgain: Me too Subby. Everything seems to work out for the best when we just flow with things huh? You probably needed a little break from your routine too...so here we are.

Subby: I think I did. Thanks for the invite.

NeverAgain: So how have you been?

Subby: Pretty good. Think I got over that major drawdown issue. Been trading a little here and there, but feeling very calm and in control.

NeverAgain: That's good to hear. Been trying to decide which way to take you next. I definitely want to recommend that you begin a regular exercise routine if you don't already have one. It's good for your mood...keeps you in an upbeat frame of mind. Is your trader personality profile information helping?

Subby: I definitely need to get back on track there...got kinda lazy there for a bit (smiling). Yes that profile is helping me to understand me. Also, I tend to read the INFJ profile often as well, since so much of "me" shows up in there (laughing). It's like an emotional mirror...that's how I see it anyway.

NeverAgain: That's good to hear. I think one of the last things we worked on was the time-frames you felt most comfortable with, right?

Subby: I think so, and I got it down to H1, M15 and M5.

NeverAgain: Okay, what I'd like to try is for you to add H4, and when you see DoingWell's triggers there, begin to look for your entry on the shorter time-frames. Once in the trade, see how far you can stretch yourself emotionally to hold that trade on H4. Just checking to see where your emotional threshold might be at this point in your training.

Subby: Okay. I think I follow you. I'm just trading DoingWell's system on H4, but using a shorter time-frame like M5 to get in.

NeverAgain: Yes, take your time with it and let me know how your feel...

NeverAgain: Here comes our waitress Subby. I think she's got our order. Time to grub (rubbing his palms together).

Subby: Looks like it to me too.

Subby: One thing I like about this place is all the background chatter about trading etc., mixed in with their other interests in life. I'm sure you can meet some very interesting people in a place like this.

NeverAgain: Sure can. It's like the subways in NewYork; you never know who will come and sit right next to you. Anyway, let's dig in, shall we?


We'll pick this up with Subby again once he starts the new trading approach from NeverAgain.

FX4

For those who may be new to the Subby dialogue in the post above, here is where it started.

FX4

must be the old cynic in me but I've read it off and on over the past week waiting for the 'sell' to take place. Refreshing to see that there isn't one and it's just a good mixture of anecdotes and wisdom. Thanks.

The only sell on my mind at the moment is to sell a pair with a bias to go down .

Glad you like the mix.

FX4

Subby is still pushing + pips for the month of April. Think he is...

1. Taking his time when selecting trades (making sure they are DoingWell's system and nothing else).

2. Not impulse trading, 'cause what it looks like many times ain't so.

3. Staying calm and focused (not distracted by emails, phone calls etc.) and trading what he knows works.

4. Not trading his P/L...just focusing on the chart, price action and his TA.

He's also trying to implement what NeverAgain suggested over dinner: he's trying to stretch himself to trade H4 now. He's also done his TA on his Balance Curve so he can keep closer tabs on where his heart-mind is now.

FX4