Vol 4: Emotions/Mental States

...continued from last week...

Volume Four of the Peak Performance Course for Traders and Investors is entitled “How to Develop Discipline”. Here’s a summary of the important points in that volume according to my understanding of them.

Van defines “mental state” as a pattern of visual, auditory, kinesthetic, gustatory and olfactory sensory activations. In the vernacular, it’s a subjective experience of emotion.

Van defines discipline as control of your mental state. He advises that you monitor yourself to ensure that you are in mental states that enable you to stick with your trading plan. Those emotions include confidence and alertness. Mental states that could cause you to deviate from your trading plan or altogether abandon your trading plan include compulsiveness, fear, greed, anger, vengefulness, poverty, lack, and sadness.

The best way to observe your own mental state is from a dissociated state (the feeling of being out of your body and noticing yourself). The dissociated state is also an effective way to neutralize emotions and is therefore useful to use while trading.

To get the mental state that you want for trading, such as confidence in your trading plan, you can do any of the following:
1. Use beliefs about the meaning of events or the context of events;
2. Use memory of having had that mental state in the past;
3. Model other people who have had that mental state;
4. Fantasize about having that mental state;
5. Use physiology (how you gesture or hold your body) associated with that mental state;
6. Build that mental state from scratch based on Visual, Auditory and Kinesthetic components.

To regulate your state, you can use Anchors. Those are stimuli that, when repeatedly used in a unique association with your mental state, become triggers initiating that mental state. On the subject of anchors, you can and should collapse any anchors associated with mental states that cause you to deviate from your trading plan. For example, do intraday charts do that? If so, then you can and should collapse their power as an anchor causing you to deviate from your trading plan – or just avoid that stimulus.

In addition to collapsing anchors which cause you to deviate from your trading plan, you need to:
1. Find out the positive intention behind those deviations. Just ask yourself.
2. Then find ways to satisfy those positive intentions outside of trading.

...cont'd tomorrow...

Copyright 2007 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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