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Flow And Coherence: The Optimal State Of Being For Traders

Flow And Coherence: The Optimal State Of Being For Traders


The greatest discovery you’ll ever make, is the potential of your own mind.” Jose Silva


I love this quote, because when I look back on my difficult and challenging experiences, the common denominator that has led me into those experiences has started from my thinking and decision making, or lack thereof. On reflection, every process is a system of linked actions. These actions, regardless of the outcome – whether desired or not, begin in the mind. As humans we all desire peace and happiness, though many of us never find it or merely only ever get to experience fleeting moments. Maybe because the majority of us have not been taught how to think and act in an efficient and therefore an effective manner. This hypothesis led me to my observations of traders in general. One symptom of inefficiency and lack of effectiveness I see is “burnout”.


If I asked you as a trader, do you want to burnout from a business or skillset that you are passionate about? I am sure your answer would be no. Unless you are on a conscious mission of selfsabotage and self-loathing. However, the crazy thing is, many of us who work in high performance environments, like the financial markets are unconscious of the signs of burnout.


Firstly, what is burnout? Burnout is state of emotional, physical, and mental exhaustion caused by excessive and prolonged stress. This occurs when you feel overwhelmed, can’t cope, lack energy, have physical symptoms of sickness and feel emotionally drained. This may cause you to be unable to meet your financial goals. The majority of us have been conditioned like robots, so we simply soldier on through these symptoms, until it’s too late, and we are totally debilitated by this exhaustion. We keep operating, loading up on stimulants and draining our hormones like adrenaline and cortisol to cope in survival mode. People, there has to be a better way to function and thrive in this life. In this article, I want to scratch the surface of this science of human potential.


What if during our trading sessions we started becoming aware of our thoughts, processes and behaviours, and as a consequence our energy levels started to improve so we began living a more balanced, happier and fulfilled life. Our concentration, focus, and decision-making abilities improve and we start to perform at a higher level, which could reflect more profitability in our trading statements – therefore meeting our financial goals consistently. How good would this be?


Well traders, this is a very exciting space right now. There is a lot of science, research and technology out there that high performance athletes like golfers and Olympians and highly successful business people are using to achieve their desired goals and live the life they designed. This field of study of human potential is untapped in the trading world.


So where do we begin? As a foundation, let’s explain some of the science basics about high performance states of optimal being, if that is our end goal. To build solid foundations, first we must understand our brain. Electrical activity emanating from the brain is displayed in the form of brain waves. Brain waves are produced by synchronized electrical impulses from masses of nerve cells (neurons) communicating with each other. Electroencephalography (EEG) was invented over 100 years ago, and measures the electrical activity produced by the brain. Multiple brain waves may be present at the same time, but there can only be one brain wave that is dominant. There are 5 main categories of brain waves, though I want to focus on the 3 main brain waves significant to us during trading activities.



  1. Beta Waves are generated when the brain is aroused and actively engaged in mental activities. Associated with a higher state of alertness, logic and critical thinking. The frequency of beta waves ranges from 12 – 36 cycles a second (hz). These waves have low amplitude but high frequency. Trading requires the brain to very active in collecting data, processing and analysing data, focussing, concentration and decision making.Optimal beta waves result in conscious focus, memory and problem solving. Too much beta waves result in anxiety, adrenaline, high arousal, inability to relax and too much stress. Stress produces stress chemicals like cortisol which is harmful to the body if it’s too much. These stress chemicals contribute to the physical, mental and emotional burnout. This is what can happen to many high performers, especially traders in high stress environments.
  2. Alpha Waves represent non-arousal, awake but drowsy and when physically and mentally relaxed. Alpha is the frequency between our conscious thinking and subconscious mind. This is the flow state zone. The frequency ranges from 8 -12 hz. These waves are slower and higher in amplitude. Optimal alpha waves result in relaxation and the flow state. Too much alpha waves result in daydreaming, inability to focus and too relaxed a state.
  3. Theta Waves are even greater amplitude and slower frequency. The frequency ranges from 4-8 hz. A person who is driving on freeway, and discovers that they can’t recall the last 10 km, is often in a theta state. This state is present in deep meditation, when sleeping lightly and REM sleep. It is a state where tasks become so automatic that you can mentally disengage from them. Optimal theta waves result in flow state, creativity, emotional connection, intuition and relaxation. Too much theta waves result in ADHD, depression, hyperactivity, impulsivity, and inattentiveness.


In the previous paragraph, I mentioned the term ‘flow state’. So, scientists have found when Alpha and Theta waves measured in the brain are vibrating at the same frequency of 8 hz, these brain wave patterns are in coherence. This state is coined ‘flow’. This is the border zone between the conscious and subconscious mind.


In performance like sports we start out in beta, but very quickly SEP/OCT 2020 YOURTRADINGEDGE 57 move into alpha and eventually theta. Mihaly Csikszentmihalyi, a Hungarian – American psychologist, first recognized and named this concept of flow. Scientists have looked at the brain waves of Olympic archers and professional golfers, and have noticed a coherent spike in alpha and theta waves just before the athlete pulls the trigger. As we know from the previous paragraph, alpha frequencies are linked to lower heat rate, calmness and relaxation, while theta frequencies are associated with deeper levels of concentration, meditation, heightened awareness of the senses and a shift in the experience of self. Gabriele Wulf in her studies of swimmers found that when her subjects focussed on external stimuli like how the water moves around them and not on technique, their performance, speed and technique improved. It allowed the automatic systems of the body to complete the activity with grace, effortlessness and creativity. This is because the conscious thought of the frontal lobe of the brain had turned down or switched off.


This is the part of the brain typically associated with higher cognitive processes such as working memory and verbalization. It is counter intuitive because naturally one thinks you would want that part of the brain highly active. What it reveals is that when the brain enters this zen-like state of concentration and creativity, the self-critical and doubtful thoughts are silenced, which allows the automatic state to take over. This results in more resources being dedicated to the activity. So, for traders the experience of ‘analysis paralysis’ best relates. This is the frontal lobe of the brain working overtime, criticizing every thought and coming up with every possible outcome to the point where you are paralysed, and your mind feels locked. Ever had that perfect set up as you follow your trading plan, but your mind comes up with excuses and stories, or expert opinions tell you that markets will go the opposite way? This is the exact brain wave activity that inhibits your trading performance. The high frequency beta waves turned on for long periods of time, drain energy from the body, negatively impacting performance and health over time.


Many high performers strive hard to get into the flow state because it is the state where constant creativity and optimal performance takes place. This is the state where we can combine rapid decisions with creative insights, and your work feels effortless and easy. If you have ever heard someone describe a time when their performance excelled, and they were ‘in the zone’, they were likely describing an experience of flow. Isn’t this the state of being we all desire when trading or performing any activity?


If you think you may be quietly suffering from your trading and signs of burnout are starting to appear, there are some important steps to recovery and healing to get back on the right track and operating more in flow:

  1. Practise focussing and concentration. Yoga and meditation are awesome. Or simply dedicate 5 minutes per day, sitting upright and breathe consciously just counting each breathe for 20 breathes straight. Observe when your mind wonders and simply go back to being present and starting your breaths from 1. This practise will build your concentration and focus muscles. Easy! Consistency is the key.
  2. Autotelicity: Ask yourself, are you trading because you love it? This is called intrinsic value. Do you enjoy the challenge of learning and becoming the best trader you can be? Just doing it for the money is important, but it is a means to an end. It will be a natural consequence of your intrinsic reasons. This is extrinsic value which is less important than your desires to be a professional trader that behaves and thinks like a professional.
  3. ‘The sweet spot’. Ask yourself, is your task at hand challenging enough? Is the task too difficult for your current skill level? These questions are critical because as a trader our skill level must meet the challenge equally. There must be a match, or we are setting ourselves up for potential or eventual failure.
  4. Unconscious competence. Are you at a stage where you can trade automatically, where it requires very little if any resources? So, can you use your brain to analyse and look for new opportunities? Stop multi-tasking when you are trading. Shut off distractions like email, mobile phone, and purely focus on the charts. Allow your brain to be 100% present and focussed so your mental energy is full to follow your trading process and make the best decisions.
  5. Latest science and technology: There are some amazing systems and tools that measure and collect brain wave frequencies and frequencies of the entire physical, mental and emotional energy fields. Harmonizing and resonant frequencies can also be administered directly to the brain and the body. We are at the frontier of this field of energetic medicine. These systems are becoming very accessible and affordable to the mainstream. Not only are people experiencing incredible healing breakthroughs from chronic and acute illness, these devices could support the enhancement of your ability to consistently operate from the flow state and reach your desired performance goals.


Cameron Buchanan, a Director and Professional Trader of the International Day Trading Academy