All man’s miseries derive from not being able to sit quietly in a room alone…Pascal
It doesn’t matter what you call it—rat brain, old brain, limbic brain, monkey brain, emotional brain. Thirty years ago, I decided to call it the rat brain, so let’s go with that. This is the part of your brain that causes you to make irrational decisions in the heat of the trading day. This is particularly true when we are in highly volatile markets such as those that I expect to occur for the remainder of 2011.
Your rat brain instills fear and blinds you to opportunity. Your rat brain fills you with greed and blinds you to danger. This is the part of your trading brain that must be both understood and tamed if you want to take your trading to higher and higher levels of success.
The rat brain delights in filling you with flight of ideas, endless chatter, rapidly changing thoughts and mixed messages that that cause you endless confusion. The incessant chatter can be exhausting. Eventually you may feel like your head is going around in circles, that your
thoughts are upside down and you are exhausted, drifting on a path to nowhere and then in the depths of depression or anxiety because you can’t turn down the noise. It’s like a reality show/soap opera filled with drama, pathos and endless cliff-hangers. You are fighting with and within yourself. No matter how hard you try, you are so captivated that you can’t change the channel let alone turn off the TV! The rat brain loves this. It adores putting you into such a state of confusion that you end up doing—for lack of a better term---rat-brained activities. These may feel OK in the moment, but they end up causing untold grief and suffering.
Examples of such activities in trading include taking profits too soon, trying to pick bottoms or tops, trading what you think (not what you see), getting into positions without a plan, letting losses run, talking yourself into and out of positions, being frozen and unable to take setups, feeling upside down and all around, and committing almost every trading error under the sun. This has happened to me and it has happened to you. My greatest challenge in trading was to learn to control my rat brain because it truly was holding me back from being the trader I knew I could be. After years of struggling with these impulses that seemed to come suddenly and from a place that I did not understand, I found the answer to the question: How can I quiet my rat brain so that I can achieve my full potential as a trader?
The answer was meditation. In my opinion, this is the best way to truly tame the rat brain. Like trading, meditation is simple but it is not easy. One of the most difficult things for human beings to do is nothing. Just sit and do nothing. It’s like that saying: Don’t just do something—sit there. Easy to say but really challenging to do. The ultimate goal of meditation is to be centered. When you are in your center, you are at the ultimate point of silence, balance and clarity.. Meditation is both a natural and a surrendering technique. It is one of trust and inner release.
There are many ways to meditate. I have found a way that works for me and have taught it to a number of traders. This technique may or may not be right for you, but I have found that it resonates with many traders at all skill and age levels.
There are many ways to meditate. I have found a way that works for me and have taught it to a number of traders. This technique may or may not be right for you, but I have found that it resonates with many traders at all skill and age levels.
You may want to begin by focusing on the breath while you meditate. Whenever your rat brain starts getting “chatty,” observe your thoughts, let them drift down gently like leaves falling softly from a tree and landing without sound on the ground. Continue to focus on the breath. Soften your eyes and feel them falling down into their sockets. Turn the eyes and the ears inward to watch the breath. As you go more deeply into meditation, turn all of your senses inward to watch the breath and feel your brain soften and become a distant observer.
With time and practice, you will look forward to those precious times of meditation. They will be a good habit and an integral part of your life. Your world will become more vivid and you will become more awake, alive, vital, responsible and effective---both in and out of the markets.
With time and practice, you will look forward to those precious times of meditation. They will be a good habit and an integral part of your life. Your world will become more vivid and you will become more awake, alive, vital, responsible and effective---both in and out of the markets.
We sit around in a ring and suppose. But the SECRET sits in the middle and knows…Robert Frost.
Janice Dorn, M.D., Ph.D.
