I am sure that one of the main skills that a trader should acquire is the ability to make decisions out of Meta Position. But what is it?
The term Meta Position is widely used in NLP and means not just a “neutral” and detached position but more like integrated one. A person takes up this position when they grow over their polarities and starts a new level of development. Out of this state of mind, a person can easily make fresh and adequate decisions. However, Meta Position in the understanding of NLP and psychotherapy needs a long way to reach, while I think that each trader can from time-to-time return to a holistic, integrated state of mind. To make terms clear, I will later on call this “observer state”.
if you are just taking your first steps in trading, then I advise you to read the article about how to become a trader.
To put it very simply, in trading one does not only need to watch the market but also needs to watch themselves watching the market. We do not only manage our capital – open and close positions, decide upon adequate investing volume; but we also manage ourselves – set up our perception, try to acquire self-control, etc. Some are more successful in it, some are less, and some pay little attention to it, preferring more and more optimised trading systems.
In my opinion, if traders devoted at least 30% of their time spent on perfecting their trading (creating and optimising trading systems) to the development of their emotional intelligence, consciousness, and thinking skills, their work would become much more efficient.
Why would one return themselves to a neutral, detached state of mind from time to time? If we do not do it, we risk trading with a clear bias toward our positions and trading scenarios. This pushes our perception into tough framework that will be hard to escape. And if we our work de-synchronises with the market, such a nosedive will be even harder to stop.
The easiest way to get back to the observer state is to write down immediately all your thoughts, feelings, and emotions into a log. Psychologists agree that writing down a text manually, with a pen/pencil on paper if more efficient than typing it on a PC because this way we build a better connection with our subconscious.
Read more on this topic in the article about emotional intelligence.
There are several techniques that you can try. For example, you can get into the observer state using the technique of spatial anchors. Try placing an extra chair near your workspace; it will be an “observer chair”. Your task is to stop being the trader for some time and turn into the observer. Such a simple thing can be real help. Edward de Bono called such a change of mind-states a change of “thinking hats”. He called certain states of mind “hats”: a white one for a neutral position, a red one for concentration on emotions, etc.
Also, you can return to a more centered state of mind using your breath and concentration on certain points of your body. For each person, this will work differently; however, try to hold your attention on a spot slightly below your navel (closer to the middle of your body), and register what you feel. The main task is to find a spot that will return you to a more balanced state of mind. Holding your attention on certain body parts is used as a self-regulation method in many martial arts, and traders may also use them.
The goal of such practices is to keep your emotions from dominating over you when you are making decisions; dominating you neither consciously, nor subconsciously, and let you return control to your-self. You can spend many years in psychotherapy and psychoanalysis (increasing your emotional pain threshold) – or you can work individually on yourself, improving your skills of self-control and self-regulation. I think this type of practice is more available, and even more importantly – in the process, the person takes up all the responsibility on themselves, thus being in a more mature position in their life. However, in certain cases, if your emotions are too intense (your pain threshold is low), you should better address an expert.
Alternatively, you might switch to a higher timeframe because this is the solution of self-control issues for many traders.
By Andrey Goilov, Analyst at RoboForex