What’s the best thing to talk about when the market is firing on all cylinders? Recessions, of...
New Visualization Exercises to Boost Your Investing and Trading
11/05/2015 6:00 am EST
Since he feels visualization and affirmation are important factors to consider when developing a trading strategy, Bruce Bower of SMB Training Blog and HowOfTrading.com highlights several trading tools he uses, which he also suggests that other traders consider as well.
Visualization and mental practice are tools that can take you to the next level of performance in your trading and investing. These tools can have a transformational impact on your mental game, helping you to execute better in every facet of your investing and trading. In fact, they are so important that I have compiled a resource page on the SMB Web site and even written about them extensively in my book, Peak Performance Trading and Investing. I use these tools frequently and am the biggest proponent of them.
Now, I wanted to share with you some new visualization tools that I have been developing and refining. These grew out of several things that I and other readers wanted to do to improve the overall results from visualization:
- Be as effective in less time
- Offer most holistic improvement
- Give an alternative to people who have trouble with making pictures in their head
These are all valid concerns and I am always looking for ways to do things better, with improved results in less time. In a previous article, I answered reader questions about visualization and offered some tweaks that people could apply to the existing set of tools. Now, I want to explore each of those concerns a bit more:
- Some of the earlier visualizations tools that I describe can take a lot of time. We don’t always have twenty, thirty minutes, or even more, to do the whole routine. Just the process of getting relaxed properly can take five-to-ten minutes. Furthermore, doing a comprehensive visualization can often leave us feeling drained, unable to give 100% effort to a day in the markets. What we want to add to our toolbox is an exercise that we can perform quickly and that will give us some of the same effect as regular visualization exercises.
- A lot of the visualization tools that I have laid out are very targeted. They are designed for a specific usage, e.g. setting goals and their scope is intentionally narrow. Some readers wanted a more general visualization tool that could help them to feel more confident and better able to tackle the markets. There are numerous proven tools for this in the peak performance and therapy worlds and I have adapted them for use in the trading/investing context.
- Different people have different levels of aptitude for making pictures in their head. This is actually a big difference between groups. I find it quite easy, as that’s just how my brain works. I understand pictures and visual imagery but am absolutely hopeless with music or any other art form. But not everyone is wired in the same way. There is a host of scientific evidence documenting that some people learn better with other sensory faculties and that we all have different levels of affinity for each sensory channel. This is a fancy way of saying that some people work best when dealing with visual representations, while others may deal better with sounds or feelings. I’ve written in the past about how to use multiple sensory systems in your visualizations, but I will address this in more detail here.
The main exercise that I want to highlight is affirmations. These are positive, declarative statements that you repeat to yourself. By the power of suggestion, your brain adapts and works to realize those outcomes, just like with visualization. The difference between affirmations and my previous visualization activities is that the former are usually much more general.
NEXT PAGE: What Is Affirmation?|pagebreak|
Affirmations have been written about for decades. They have been popularized by several famous books for aspiring wealthy people, like The Science of Getting Rich, Think and Grow Rich. They have also been featured prominently in the self-help and therapy world in best-selling books like Psychocybernetics and The Power of the Subconscious Mind. Several famous athletes have also used affirmations to boost their performance. Clearly, affirmations have cropped up in many fields. But do they work?
The evidence has been mixed, as the scientific literature is not fully supportive. More recently, the book The Secret popularized affirmations and visualization to a new audience and was phenomenally successful in the process. It also caught a lot of flack because it seemed to encourage an insouciant attitude of “visualize and everything will come to your door,” without addressing the need for corresponding action. To my mind, this is putting the cart before the horse. Affirmations and visualization shape and enhance our existing efforts, but can’t and will never take their place.
As always, we are using only visualizations and affirmation only as a complement to our existing effort. We can’t just vegetate in a chair, make fabulous pictures in our heads for an hour a week, and expect success. Rather, we have to work very hard at our preparation, research, paying attention to the market, and reviewing ourselves. If we do all of those well, then affirmations can make things a bit easier or get us to the next level. I assume that this is how you will be using them.
What is an affirmation? There are a bunch of definitions, but from my reading her are several traits shared by every definition:
- An affirmation is a positive, declarative statement of the state of being of what you want.
- It is present tense, so that you are telling your brain that you have it now. This can be both physical and more emotional or mental states and things.
- g you could affirm that “I am a happy, healthy, energetic person” and also say that “I am earning a very large income.’
- It is a bit vague and general, on purpose. You would say “I am earning a very large income” instead of “I earn $2,000,000 per year,” ‘I am brilliant” rather than “I have an IQ of 135.” This is different from how we set goals, because you are trying to move your brain in the right general direction.
- An affirmation is what you want to happen, so it should both reinforce your current strengths and also assume that you have corrected any weak spot. For instance, if you are a studious person but quick to anger, then you should create an affirmation that you are “a patient, disciplined, calm, and rational investor.” This will suggest the optimal reality.
- It is designed to be something that you work toward over time, not instantaneously. Stretch yourself and your horizons. Talk about how you are super successful, live in your dream house, describe your ideal emotional state, etc. Make no small plans.
This is how to structure your affirmations from a linguistic perspective. Let me emphasize that it’s better to keep them a bit general or vague. The idea of affirmations is to get every part of your mind working towards, or noticing, the outcome that you want. If you are telling yourself that you feel better than, then it’s entirely plausible that you wake up one day feeling better than you’ve felt in some time. It can be for a number of reasons, like your getting more sleep than normal; your having slept better; or just because you’re looking forward to something that day. At that point your brain is going to say “You know what, I am feeling better,” and it becomes a self-reinforcing cycle. You feel better, so you believe that you feel better; as you believe it more, then your brain makes it happen.
NEXT PAGE: The Dangers of Being Overly Specific|pagebreak|
This is the other reason why you don’t want to be too specific. If you say, “I am making $10 million per year,” then it would be hard to find confirming evidence of that. Every time you look at your bank account, you run the risk of disappointment. But if you are affirming, “I get richer and richer with every day,” then you are much more likely to find some evidence and to get a lot of momentum together. The bottom line is: if you want a simple visualization exercise that you can use any time, then just keep it ague and general.
Of course, there is much more to this than just the language behind it. Affirmations are statements that affirm, i.e. say. You want to say these out loud to yourself, even if it’s at a very low volume. And put some feeling into them. Say them with a confident, powerful voice, like you really mean them. Say them slowly and deliberately, feeling and savoring every single word.
You want to mix affirmations together with an emotionally compelling representation of what it would be like to have your goal or your desired state. You need to create that entire experience and feeling and then to summon it and live in it while you are saying the affirmation. For instance, if one of your affirmations is to have a large beach house on the ocean, then you need to think about what that would experience would be like and how you would feel. Imagine the saltwater breeze from the ocean, the sunset over the ocean, the sound of laves lapping on the beach, and how comfortable and cozy your house would feel. Revel in these feelings, live in them, and harness all of that emotional energy when you say your affirmation. A couple of minutes reciting affirmations will go a long, long way when you combine them with such intense, pleasant feelings. As I’ve emphasized in the past, emotional intensity is what boosts the resonance and effectiveness of any visualization activity. In this respect, your affirmations are similar. Their effectiveness will, in large part, depend on how much emotional intensity you bring to them. A few minutes of affirmations in the morning with great emotional power will firmly lodge a goal in your mind, forever.
The most straightforward use of affirmations is that you say them to yourself when you catch a few moments of calm or focus. This could be at any time of day or night...right before you go to sleep, when you’re taking a shower, or when you’re on the train to work in the mornings. You have your list of things that you want to suggest or reinforce. You take the list of affirmation and recite them.
As you get comfortable saying these affirmations to yourself, you will gradually condition your mind to believe it. It will become an emotional touchstone that you reach for numerous times and where you gradually become more comfortable and successful with it. Just reciting these once a day, reveling in all of the emotions attached to them, can be a huge boost.
We’ve covered how affirmations work overall. How would we apply this knowledge to an investing or trading context? The first step is to identify what we want to feel and experience, in general language. It will sound insouciant at first, but remember...that’s what you want. You would probably like to feel calm, confident, and ready to face any challenge at any time. To feel in control and like the master of your craft. To feel rich and successful. To feel good and healthy and energetic every day. Create a mini-script for yourself that leaves you feeling exuberant.
NEXT PAGE: What's the Next Step?|pagebreak|
The next is to describe (in general terms) how you would describe yourself as an investor or trader. You would want to say “I am calm, collected, and disciplined.” Or that “I am methodical and process-driven” and “always prepared.” Or that you are “achieving new levels of profitability.” Each of these states is obviously something that we would want to achieve, while at the same time adding on to each other. What I mean is that you want to be calm and disciplined, but if you get calmer and more disciplined, then you’re certainly content to do so. Likewise, you want to hit new profitability targets, but if you, in turn, exceed those, then you are happy to do so. Whereas if you set a single profit target, then not only is it harder to progress towards it, but you are also potentially limiting yourself.
When you compose your investing and trading affirmations, stick to the most important points that you would want. Focus on these areas:
- Your psychological state. Remind yourself that you are “calm,” “focused,” etc.
- Your process. State that you are “methodical,” “process-driven,” “disciplined,” etc.
- Your work ethic. Tell yourself that you are “hard-working,” “always prepared,” etc.
- Your profitability or returns. Tell yourself that you are “more profitable than ever,” “realizing better risk-adjusted returns,” etc.
- You, overall. You have “more energy than ever,” “are feeling happier and healthier than ever,” and “your trading/investing suits your life well.”
That’s it. You don’t need to go into intricate details about your positions, your office space, or your co-workers. You just want to keep it simple and basic, focusing on what matters most.
If you want a simple list of affirmations to get you started, try saying these a few times to yourself in the morning. It could be in the shower; in front of your bathroom mirror; or on the way to work. The point is to say them and to really get into them.
“I am a calm and focused investor.”
“I am disciplined and driven by process. I am thorough in my preparation.”
“I devote the quantity and quality of work necessary for success in the markets.”
“I am a successful investor, continually becoming more profitable.”
“I am a prudent risk taker and risk manager.”
“Investing suits and enhances my abundant, happy life.”
And that’s it. This is the list of statements (or similar statements) that I repeat every morning. As trite as it may sound, this does work. It boosts my overall mood and gets me on the right general track. Affirmations work best when combined with select, targeted visualization exercises and with actual effort. When you take action towards a goal, and believe with all of your heart that you will achieve in your goals, then you will achieve your goals.
I know that anyone reading this is looking to raise their game and achieve peak performance in the markets. The loftier your goal, the better. Hopefully you can add these tools to your toolkit and get even better.
Related Articles on STRATEGIES
One sector that has treated us right is the small cap stocks, which we recommended towards the end o...
The market has been remarkably resilient; most U.S. companies are doing well, and the S&P 500 ap...
Aging economic recoveries and bull markets carry special risk for anyone who is too easily enamored ...