The markets offer an endless stream of opportunities to trade. Each trade or series of trades provides the chance to wipe the financial slate of the past clean, find trading redemption, and claim the lucrative future. Each trade has the potential to announce that your dues are paid, that you are maturing as a trader, and that finally you are poised to enter the elusive circle of consistent winners. The lure and promise of financial freedom through the clicks of a mouse offers a sense of adventure, challenge, and stimulation rarely matched in other activities or professions.

It is sometimes stated that you need to remain detached from your emotions whilst trading. This represents a noble aspiration, but aside from the fantasy world of the paper trader, where real, hard-earned money is on the line emotions will kick in strongly, and therefore we have to know how to make them work to our advantage. Despite our best efforts to override or subdue them, emotions, enhanced and crystallised into sharper focus by the market environment, will gnaw at us and dictate actions which are often contrary to what we intended when getting into the trade. Some traders struggle to take the action they know is right because they pay more attention to their own process in a negative way than to the process of the trade itself. The challenge is to fully accept your emotions as they arise during trading and in so doing, relate to them as reliable, trustworthy guides. The greater your emotional self knowledge the more clearly you will be able to gain transparency into the actions of the other market participants.

Understanding the market from such an emotional perspective brings many benefits. It means, for example, that you are able to fully embrace the risk inherent in trading. Knowing from your experience that anything can happen in the market, you will be prepared to catch and hold any emotional fallout that results from your trade. You feel secure within your overall expectation of profit, and are thus able to give breathing space to individual trades. It means that you are more likely to take the hard decisions quickly because you possess an inner fluidity that allows you to respond with nimbleness and acuity.
The market maxim of following the line of least resistance probably equates to following the line of most resistance in yourself, something that becomes easier as you become accustomed to relating your nuances of feeling to the market action. Emotions can be good contrarian indicators. With practice, you can begin to guess where others are ready to throw in the towel and be there to gladly relieve them of their position. The candles on the charts are graphic illustrations of hope, fear, greed, and belief as well as the footprints of money.

It is crucial to appreciate the emotional dynamics that underlie this game of wealth redistribution. In the market context some emotions may have a different resonance and payoff than in everyday life. For example, if you are in a place of deep despair and hopelessness in your everyday life, then perhaps this can be talked about, processed, worked through in therapy, or offered to your particular God. Usually there is a way of finding some light at the end of that tunnel.
Transferring the same emotional dynamic with its inbuilt hope to the market, based on some apparently abiding faith that things will be OK is tantamount to financial suicide, a margin call probably being the only salvation.

Filtering Process
It is important to create for yourself an inner filtering process, perhaps a small simple ritual, so that you do not find yourself bringing to the market arena emotions and qualities which serve you well in everyday life but which could prove detrimental to your trading. For example, determination is a great quality to possess when used for the right purpose. You need to retain a determination that you will triumph in your quest to achieve your trading goals. This does not mean that you have to express your determination on every single trade and try to force results where they aren’t going to happen. You also have to be on the lookout for when you are using a particular quality in the market that maybe belongs elsewhere in your life. Similarly, suppose you have recently been successful in some other endeavour in your life. You assume that the same set of principles apply to becoming successful at trading. You follow your common sense and replicate your approach. It yields disappointing, confusing results. You may feel like quitting; but if you can pause to reflect and consider, you may discover that it is in the ashes of this temporary distress that the phoenix of the winner is waiting for an invitation to emerge.

Spiritual Parallels
The journey from loser to winner is, if you like, a trade in itself, the ultimate buy low sell high, exchanging ignorance, loss, and what you don’t yet know for self-knowledge, consistency and a degree of mastery. It’s a tough deal and only those who are willing to undertake serious, searing self-scrutiny and practice rigorous self-discipline will make it. Many, as they say, are called. Few make money.

Indeed, there are many parallels and echoes, for those inclined to look, between what is required on a journey of spiritual development and that of becoming a successful trader. The Buddhist concept of ‘the narrow way’ certainly has resonance with the statistical certainty that many traders will fall by the wayside and only a small dedicated percentage will develop the requisite inner qualities and get through. Many spiritual paths demand of their adherents a degree of asceticism, forgoing something in the present and enjoying the virtuous action that will yield them future rewards. Deferring the temptation to snatch a quick profit and practising the patience that may bring the greater reward if a winner is allowed to run is just one example where an adherence to a more rigorous ethic could be more profitable. Most spiritual traditions encourage an awareness of the present moment, for it is in this ‘eternal now’ that one becomes free from the veil that masks the true reality of being. I am not especially trying to reconcile God and mammon here, but I am acknowledging that if you could remain in present moment awareness whilst you are trading, you are likely to be more effective than if you are caught up in the hopes and fears of the future and the regrets of the past. If you can trade from the place of ‘what is’, then you remain closer to the pulse of the action. Discipline is freedom, they say, and apart from perhaps becoming enlightened, nowhere does this ring more authentically than in the trading arena.

A trading apprenticeship involves becoming unhappily familiar with the trader’s lament, the phrase ‘if only’. Regret for trades not taken, not exited quickly enough, or exited too soon must be dealt with in a way that doesn’t prejudice future trading The winner changes if only to ‘only if’ – only if he is disciplined, focused, alert, and grounded will he succeed. He develops an inclusive relationship with the inevitability of loss in its many guises. He learns to gracefully receive the lessons in humility the market so unfailingly provides.