In trading, we all strive to stay in the zone. This is when trading works best: when you are hyper-focused, present, and nailing every step of your process, managing your attention second by second.
But sometimes, it’s easier said than done. Sometimes, there are moments when your mind isn’t there. Maybe you begin to panic. Maybe you’re just not as sharp as you’d want to be.
Most of the time in those trading situations, you are not present—not because you are not alert enough (if that’s the case, go grab a coffee) but because you are stressed. There are just too many thoughts going on in your head. When that happens, what helps me kick back to reality and become really present is the breath.
In this todays post, I’ll give you two techniques.
Breath Awareness
The first one is breath awareness. I use it as a cognitive booster. I’ll give you an example:
I live in a big city with a lot of traffic, and sometimes it’s just easier to navigate the city center on a bicycle. I can zap forward, meandering between cars stuck in traffic—but when you’re moving fast, you also need to think fast. Whenever I need that extra edge to my focus, when I need to sharpen my senses and stay super alert, I switch on the breath awareness.
How to do it?
Pay attention to your breath. Observe how it moves in your body.
Start counting your breath, counting as you breathe in, and as you breathe out. You can go with 1...2...3… count for breathing in, and 1...2...3… for breathing out.
In this way, equalize your inhalations and exhalations.
You can adjust the counts as you please.
Why the counting part?
Believe me, it’s actually easier to follow your breath when you do the counting. It’s easy to lose track of observing what happens in your body as you breathe, especially when there’s a lot going on around. But counting anchors your mind, keeping you in the exercise.
Why does it work?
Here comes a super small pill of brain science: emotions in your brain are processed by a structure called the amygdala. The amygdala, in turn, is tightly connected with other brain areas that regulate attention. According to research, just by observing the breath, you can down-regulate the amygdala and reduce stress reactions. At the same time, when observing the breath, the brain areas responsible for regulating attention become more activated.
Navy Seal Box Breathing
So the first technique serves to increase your focus.
The second one calms you down—on top of increasing your focus.
This exercise is called box breathing, and it’s used by the military (famously by Navy Seals) to deal with combat stress. In the most dire situations, soldiers use it to prevent panic and stay alert. Just like box breathing has saved the skins of many on the battlefield, it could also help you in your trading situations.
Navy Seal box breathing uses counting as well, but on top of that makes the breath slower. Here’s the technique:
Breathe in for 4 counts.
Hold your breath for 4 counts.
Breathe out for 4 counts.
Just Another Tool in Your Toolbox
It’s a good idea to spend at least a little bit of time in a calm situation at home to train the technique and see how it feels in your body.
But then you can use it on the spot, wherever you are. This is the beauty of it: you don’t need to sit in a lotus position on a cushion in a corner of your office, you don’t need to do anything zen. Just pay attention to your breath and do it in a certain way.
These techniques are useful because you can do them wherever you are trading or out and about outside so if that’s the case people around won’t notice (unless you begin to gasp mid-conversation).
But more so we can use these techniques in tough trading situations like
When you’re about to take an important trade…
When you’re waiting for a setup to form
When you’re taking a break during a tough losing streak...
Whenever you notice you’re losing your becoming unsettled, use your breath as a cognitive booster to bring you back to the present moment.
Hope you enjoyed it. And let me know in the comments—how did it go for you?
All the best,
Alan
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About Alan
Alan Edward (aka The Divergent Trader) is an impactful speaker, author and high performance expert. A Full Time Trader by profession. Alan is the founder and CEO of Divergent Trader a private financial firm that educates, coaches and supports traders.
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