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Mindfulness in Forex trading

So how can mindfulness help Forex trading performance? In the previous section, we mentioned that mindfulness means paying attention to the present moment non-judgementally. We have also explained the highly psychological nature of trading as well as the link between our thoughts, emotions and behaviour.

In Forex, as in other forms of trading, it is easy to take decisions based on our biases, negative thoughts, unpleasant memories of losses and consequent emotions. We may have a good trading plan, a high probability trading method and significant experience but we may still be unable to do what we have to do at the right time.

Taking decisions based on our mind’s talk, our emotions or even on the inevitable effects of our body’s chemistry is the rule rather than the exception to it. But in trading, success comes from sticking to the plan we created and the goals we set, so we must learn not to allow all this inner chatter influence our decisions.

Practicing mindfulness will help us

  • To experience greater awareness of our thoughts, bodily sensations and emotions
  • To become a non judgmental observer of our thoughts and emotions rather than a soldier that spends his energy trying to fight them
  • To be more stress resilient
  • To be in the “here” and “now” rather than in the “before” and “after”
  • To cultivate inner discipline
  • To be able to take decisions according to our values and goals instead of our momentary emotions and thoughts
And in Forex trading this is important because

    • Emotions, negative thinking and biases do interfere with objective decision making
    • With practicing mindfulness, we can learn to differentiate when a trading decision is thoughts and emotions based and when it is goals and values based
    • When we understand the difference, we must opt to take values & goals based decisions
    • We will learn to be more focused and decisive
    • We should neither try to eliminate nor completely buy into unhelpful thoughts, emotions or bodily symptoms. We shouldn’t try to eliminate them because a) it’s impossible to control them anyway b) they may carry important messages. E.g What is my rapid heartbeat telling me? It’s telling me that I ‘m getting anxious, that I do not like what I see and that my mind is starting to play the worst case scenario. However, I do not need to buy into this. My mind is telling me “loss is increasing, exit now”, I can choose to watch my mind, my body, my anxiety and not act according to it.

For most of us, mindfulness is not a natural mental process. We are conditioned to strive for control, avoid unpleasant emotions at any cost and run on automatic pilot, often unaware of what drives our behaviour. Mindfulness requires our patience to consistently practice it  so it can become a skill. Throughout this website, we will offer information on how traders can practice mindfulness and suggest specific exercises that may be helpful.