Mindfulness for Financial Traders: An Introduction by Aedie Caltern - HTML preview

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It may not be the best way to start to define a topic by saying what it is not, but in this case I’m going to make an exception.  At least to start.  At its simplest, mindfulness can be considered to be the opposite of ‘mindlessness’.  Most people understand what is meant by mindlessness – the undertaking or repetition of some action without even thinking about it.  Mindlessness is not always wrong.  It happens and is appropriate where there is a simple action that needs to be repeated regularly or intuitively without thinking.  It helps to prevent us becoming very bored, virtually hypnotized by simple repetition.  At the opposite extreme, it enables us to act quickly, instinctively, particularly in times of danger or competition, without thinking or planning in advance.  Walking, writing your name and many of the required actions when driving fall into this category. 

 

But notice that it is the actions that can be undertaken mindlessly.  You should not undertake any of these activities without paying some attention.  If you are writing your name, what are you signing?  Watch where you are walking.  Pay attention when driving.  These are all conscious actions requiring attention.  But you don’t need to stop to think which letter you will put first in your name or how to form it.  And you don’t want to stop and think about how brakes work or which pedal to press when you need to do so.

 

So, mindlessness has its place.  It allows us to tolerate the humdrum, the repetitive, the mundane and to concentrate our attention to where it needs to be, or where we would wish it to be.

 

But there is a downside.  Mindlessness only allows this.  We don’t know how far to allow it to happen.  We don’t seem to have a good inbuilt control for everyday situations.  By diverting our minds from our immediate surroundings we have no guarantees about how far our minds will wander nor to where they will go.  And a lot of the time the attention capacity that is freed up is put to uses that are not at all beneficial. 

 

The capacity may be used to worry about actual or imagined events.  Or it may be simply that the loudest thoughts dominate and constantly intrude.  It has been estimated that the average person has over 60,000 thoughts per day.  Furthermore, it is estimated that up to 90 percent of these thoughts are simply repetitions of our thoughts from yesterday. And while people spend almost half their time worrying, the vast majority of those worries never come true.

 

There is a constant noise, a hustle and bustle in our heads, even when the world around us is quiet and non-intrusive.  This is particularly the case where the immediate surroundings are familiar and low in terms of their stimulatory impact on our senses.  Think of lying aware at night.  These are the very places where we should be able to react easily without even trying.  But how often are the quietest places also those where worries rush in to fill the mental capacity that has been freed?

 

Mindfulness is an attempt to stop this.  It does not place strict limits on our wandering minds but it tries to call them back to what is the present experience.  Is today really just a case of the boring sameness as every other day?  Of course not.  The truth is our surroundings are constantly changing.  Our actions, no matter how repetitive, are constantly varying.  It’s just that we are not paying attention to these changes and variations. 

 

If you look through the literature on mindfulness you won’t find a single universally accepted definition but various forms of words that create quite similar impressions.  There does not seem to be any particular boundaries to what constitutes mindfulness, but you know it when you experience it.  In general, it appears to be defined by associated actions or experiences, rather than physiological or medical symptoms.  This has sparked some criticisms that it too vague a concept to be of real use with little or no definitive empirical or experimental evidence to support it.  This has been countered, often by people who have really bought into the cultural and religious ideas from where mindfulness originated, that this is a westernized, scientific mindset that is simply inappropriate and misses the point. 

 

Does this matter?  Well, up to a point.  If we are going to learn a skill we need some reason to think we will see a benefit.  And while mindfulness may not fulfill all the criteria that would see it considered to be a mainstream therapeutic treatment within the medical sciences, there is plenty of evidence, some of which is discussed later in this eBook, that there are plenty of associated benefits.  As for claims that looking at it in this way is a distortion of a religious or philosophical practice, I have no wish to get into that argument[1].  Why would I?  We are not looking for a way to enlightenment, just a way to improve our trading performance. 

 

So what sorts of definitions appear.  Looking through the literature, but avoiding the more esoteric material that sees mindfulness as a step on the path to enlightenment, you will encounter definitions such as that mindfulness is:

·        paying attention on purpose, moment by moment, without judging;

·        awareness;

·        the opposite of forgetfulness;

·        a technology that you apply to the mind so that you begin to generate insight into yourself and your place in the world;

·        a practice in which we develop a non-judgmental present-centered awareness.  In the state of mindfulness, we observe what is, without reacting to it as good or bad and without colouring it with thoughts and feelings of past and future; 

·        concentration, sensory clarity and equanimity;

·        a reminder of what you are supposed to be doing; sees things as they really are; sees the true nature of all phenomena.

 

The terminology differs as does the different aspects that are emphasised but there is a fairly common theme that is probably best summed up by the shortest of these definitions: mindfulness is awareness.  Awareness of our surroundings and of ourselves.  We become aware but just observe without judgement.  And we stick to the present moment.  This final point is summed up very nicely by the Buddhist author Thich Nhat Hanh.  He writes that

‘Our true home is not in the past. Our true home is not in the future. Our true home is in the here and the now. Life is available only in the here and the now, and it is our true home.’

 

If you wish, click here to view a short introductory video on mindfulness.  (It’s only about 4 minutes long).

 

Becoming more aware of our immediate surroundings, while removing the past and future from your mind, may not sound like an obviously helpful thing to do.  However, if you can do this in a way that suspends judgment and self criticism then there can be surprising results.  In particular, you can begin to tap into mental capacities that will help you to make better decisions.   

 

So, why are we not doing this automatically or at will?  Think about how we typically act as we go though our days.  We are intelligent, sentient, sensory beings.  This means we have the faculty to experience the world around us, through our senses, and to make sense of it through our minds.  But is this what we actually do? 

 

Just having the ability to act in this manner is not enough.  The fact is that we actually tune out from the world around us most of the time paying little attention to what our senses are telling us.  We think we concentrate on the information from our senses that is, what we perceive to be, of most relevance to our objectives.  But look at the huge judgements that are implied in that statement.  We assume we can judge what is most relevant and then that we instinctively concentrate on that information. 

 

However, this does not happen instinctively.  We do indeed tune out from most of our sensory information, but we do so in an almost a random manner.  And we do not use the information we do process in an objective manner.  Instead we constantly judge and categorize this information often according to experience which may or may not be accurate.  In undertaking this judgement and categorization we bring to bear all the prejudices and obsessions, as well as learning, that we have developed as we grew up.

 

We rationalize the fact that we pay little attention to what is actually going on around us on the basis that this allows us to concentrate on the task in hand, on what actually matters.  But again we do no such thing.  We allocate at least as much of our attention to thinking about the future and the past as we do to the present.  And yet, nether the future nor the past actually exist.  The former is simply our imagination, fantasies  in our minds.  They may or may not come to pass, but even if they do the chances are we will then be thinking of something else at that time.  The past is also simply a construct of our minds.  We call it memories.  In fact, much of what we think of as memories of events are actually memories of memories and we have limited abilities to distinguish between the two. 

 

So, we are intelligent beings that do indeed make decision on what our senses are telling us about the world around us.  But we are actually ignoring most of what our senses are telling us and allocating most of our intellectual capacity to manufactured thoughts. 

 

Is it any wonder we fail to see the obvious, find it hard to concentrate and make mistakes?  Worse, we allocate time to rehashing memories of adverse feelings we experienced when we made those mistakes or trying to recapture in our minds positive feelings from good memories.  What remains of our intellect we allocate to imaging situations where we can either avoid those bad feelings or experience again the good times.  And all this irrespective of what is going on around us?  

 

We do this even though we know that only the present is real, that our senses can only experience the present.  We do all this and still carry on with our daily lives, performing most tasks though a combination of evolutionary strengths such as involuntary behaviours and the mindless undertaking of tasks that require some voluntary behaviour but less than full attention. 

 

Like driving perhaps?  Yes it’s hard to believe that we take what is effectively a deadly weapon into our hands – the use of private cars is responsible of the deaths of thousands of people every year – and we operate it while thinking about something else.  If we do that mindlessly then how much else do we do mindlessly?  And now we have reached the point where we can use the word that describes so much of what we do – mindlessness.

 

Mindfulness is a breaking away from this way of operating.  We aim to make space in our minds, not necessarily by excluding other things but by consciously finding space, to observe and become aware of what is actually going on within us and around us.  And we want to go further, because we want to be aware that we are doing this, to be able to observe that we are aware of the present.