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Meditation For Traders: Meditating To Become A Better Trader and Attain Trading Success

Last Updated on 10 February, 2024 by Trading System

Meditation and Trading Success: Can Meditating Help You Becoming A Better Trader?

This is one of my favorite subjects and topics in trading. Not many traders talk about it but I believe it can be an important part of a trader’s toolbox and carrier.

It has been shown that when feeling stressed, anxious, tense, or worried, spending a few minutes in meditation can restore your calm and inner peace. Many people in different fields of endeavor have attested to the enormous benefits of meditation. But can meditating help you to become better as a trader?

Yes, meditation can help you become a better trader if you practice it with consistency. Meditation can wipe away the day’s stress and anxiety, bringing you inner peace and keeping you focused on the moment. Meditation can program your mind to avoid the fear, greed, and cognitive biases that color trading decisions.

This post is going to cover the following:

  • What is meditation?
  • Does meditation work?
  • Elements of meditation
  • Types of meditation
  • How meditation can help you become a better trader
  • How to practice meditation
  • Developing your meditation skills

What is meditation?

Meditation is a practice where an individual uses a set of techniques that are intended to encourage a heightened state of awareness and focused attention. It involves using mindfulness technique or focusing the mind on a particular object, thought, or activity to train your ability to pay attention to the present moment and also achieve a mentally clear and emotionally calm and stable state. Anyone can practice meditation; it’s simple and inexpensive and doesn’t require any special equipment.

Of course, meditation has been practiced for thousands of years, as it can be found in almost all religions — from Christianity and Buddhism to Islam and the rest. The religious people who started the practice used meditation to deepen their understanding of the sacred and mystical forces of life. But in today’s world, meditation is commonly used for relaxation and stress reduction. It is considered a type of mind-body complementary medicine.

Meditation can produce a deep state of relaxation and a tranquil mind: if stress has you anxious, tense, and worried, spending even a few minutes in meditation can restore your calm and inner peace. Interestingly, you can practice meditation wherever you are — whether you’re out for a walk, riding the bus, waiting at the doctor’s office, or even in the middle of a difficult business meeting.

When meditating, you focus your attention and try to eliminate the stream of jumbled thoughts that may be crowding your mind and causing stress. With practice, the process may result in enhanced physical and emotional well-being.

Does meditation work?

There is significant evidence that shows that meditation works, especially in helping people deal with stressful situations and even mental health concerns such as depression and anxiety. For example, a study by Fadel Zeidan at the Wake Forest Baptist Medical Center showed that anxiety levels dropped by 39% from just a few minutes of meditation per day. Also, the study showed increased brain activity in the ventromedial prefrontal cortex (associated with controlling worries) along with the ACC (anterior cingulate cortex) that moderates thinking and emotion. This implies that during meditation, these areas were heavily stimulated, resulting in significantly decreasing anxiety.

Another study by Harvard University observed that people with no history of meditation showed a thickening of the cerebral cortex — the most advanced portion of the brain — which not only affects attention (key for trading) but also emotional integration. Interestingly, after 8 weeks, the participants showed a major increase in the grey matter, specifically in the hippocampus, which is associated with self-awareness, compassion, and introspection. On the other hand, the grey matter density in the amygdala, which affects stress/anxiety, was decreased, thereby helping to reduce anxiety and stress.

The MRI scans of Matthieu Ricard (Buddhist monk and translator for the Dalai Lama who has been dubbed the ‘Happiest Man Alive’) and other long-term meditators (10,000 hours of practice or more) were studied. The scans showed that long-term meditators experience a huge level of positive emotions with a reduced level of negative thoughts.

In its review of the science behind meditation, Mindful.org identifies the benefits of meditation as improved attention, increased emotional resilience, greater compassion, and “less rumination about ourselves and our place in the world”. Also, the work of Gaelle Desbordes and colleagues finds that mindfulness meditation facilitates emotional well-being, not just by increasing relaxation and reducing stress, but by building interoception — being aware of our bodies. And, this awareness, which is accompanied by measurable shifts in brain structure and function, breaks cycles of repetitive thought, giving us greater control over worry and negativity.

Similarly, the work of Amishi Jha shows that meditation is effective because it enhances attention and working memory, giving us greater control of the information we select and deselect. This enhances awareness and intensifies our focus on the here-and-now. This approach is used in Mindfulness-Based Cognitive Therapy (MBCT), which adds an intensification of mindful awareness to traditional cognitive work to enable patients to change not only what they think about but also how they filter incoming information.

What Ray Dalio said about meditation

Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, has been a fan of meditation. He has studied transcendental meditation, which involves silently reciting a mantra, for over 40 years and promotes the practice with any opportunity he gets. In a chat with Yahoo Finance in 2016, he noted: “When I look back at my life, I am happy to have had what most people would consider a successful life, not only in terms of business but in my relationships and in lots of other ways. More than anything else, I attribute it to meditation — partially because of the creativity, partly because of the centeredness.”

In a fireside chat at the Greenwich Economic Forum, he also had these to say: “When there are many things on his mind and plenty of reasons for stress, meditation helps clear his mind and provide clarity. It gives one equanimity. It gives one creativity. The act of repeating a mantra, which is just a sound, and then transcending into the subconscious mind not only brings peacefulness and a healthy state of mind, but it also taps the subconscious mind, which is where the creativity comes from.”

Dalio went further to say that he doesn’t think anyone he has introduced meditation to that has given it a chance has said that it hasn’t had a great impact on their lives. He added that many people in positions of power find they need to meditate regularly, but most wouldn’t think that such people would practice meditation.

There is no doubt that Ray Dalio understands and taps from the benefits of meditation. Truly, you can see the benefits of the practice in all aspects of his life.

Elements of meditation

Meditation consists of key elements, which may vary depending on whose guidance you follow or who’s teaching a class. However, the most common elements every meditation should have include:

  • A quiet setting: A noiseless environment is an important element in meditation. If you are a beginner, it may be easier to practice meditation in a quiet environment with no distractions, in the form of television, radios, or cellphones. That is the best way to maintain a high level of concentration. As you gain more experience at meditation, you can do it in high-stress situations, such as a traffic jam, a stressful work meeting, or a long line at the grocery store, which are where you need it the most.
  • A comfortable position: You need to stay in a comfortable position to feel relaxed and get the best from meditation. Whether you want to meditate sitting, lying down, walking, or in other positions or activities, just be sure you’re comfortable. Ensure you keep a good posture during meditation.
  • Focused attention: The central element of meditation is focusing your attention on something. So, once you have gotten a quiet setting and stay in a comfortable position, you have to focus your attention on a body part, a thought, or a feeling. You can also focus your attention on such things as a specific object, an image, a mantra, or even your breathing. Focusing your attention is what helps free your mind from the many distractions that cause stress and worry.
  • Relaxed breathing: Also central to meditation is maintaining relaxed, deep breathing. It involves slow, deep, and even-paced breathing using the diaphragm muscle to expand your lungs. This allows you to take in more oxygen and reduce the use of your shoulder, neck, and upper chest muscles while breathing so that you breathe more efficiently.
  • Open attitude: Another element is to have an open attitude. Allow your thoughts to pass through your mind without judgment.

Meditation types

There are many types of meditation, but the common ones are as follows:

  • Mindfulness meditation: With this type of meditation, you try to be mindful of the moment and have an increased awareness of your feelings. You focus on what you experience during meditation, such as the flow of your breath. Observe your thoughts and emotions, but let them pass without judgment.
  • Guided meditation: This is also called guided imagery or visualization, as you try to form mental images of places or situations you find relaxing. You may try to use as many senses as possible, such as smells, sights, sounds, and textures. A teacher often provides a guide for the process.
  • Mantra meditation: This type of meditation involves repeating a mantra. You practice it by silently repeating a calming word, thought, or phrase to prevent distracting thoughts.
  • Transcendental Meditation: This is a special kind of mantra meditation where you silently repeat a personally assigned mantra, such as a word, sound, or phrase, in a specific way. This form of meditation may allow your body to settle into a state of profound relaxation, and your mind can achieve a state of inner peace, without using effort to concentrate.
  • Qi gong: Qi gong (pronounced CHEE-gung) is part of the traditional Chinese healing system. It combines meditation, relaxation, physical movement, and breathing exercises to restore and maintain balance.
  • Tai chi: A form of gentle Chinese martial arts, tai chi (TIE-CHEE) requires you to perform a self-paced series of postures or movements in a slow, graceful manner while practicing deep breathing.
  • Yoga: This involves performing a series of postures and controlled breathing exercises to promote a more flexible body and a calm mind. As you make those poses, which require balance and concentration, you try to focus more on the moment than your busy day and other sources of stress.

How meditation can help you become a better trader

When you meditate, you may clear away the information overload that builds up every day and contributes to your stress. As a trader, meditation can help you in the following ways:

  • Focusing on the present moment: Meditation helps to focus on what is happening in the market at that moment so you can make your decisions based on present information and not the emotions you associated with similar situations in the past.
  • Increasing self-awareness: Meditation helps you to become self-aware. You will be able to know when your trading emotions are rising so you can use other techniques to manage them.
  • Reducing negative emotions: With consistent practice of meditation, you can reduce how often your negative emotions, such as fear, greed, despair, and anxiety are triggered.
  • Processing key information better: Meditation helps to keep your mind sharp so you can quickly identify and process the key pieces of information that matter.
  • Gaining a new perspective on stressful situations: Meditation helps you to manage stressful situations better by examining each case from a fresh perspective. For example, after having a losing trade, you meditate.
  • Building skills to manage your stress: Meditation not only reduces your ability to feel stressed but also helps you to build the skills to attack stress-causing situations. With meditation, you will more likely execute your strategy better.
  • Increasing patience and tolerance: With meditation, you will learn how to be more tolerant and patient with your trading journey.
  • Increasing imagination and creativity: You will generally become more creative in all your dealings.

How to practice meditation

At the initial stages, you may be wondering whether you’re meditating the “right” way and that can add to your stress. Just know that there’s no right way to meditate. You can make meditation as formal or informal as you like. The most important thing is that you have a daily routine of devoting a few minutes of quality time to meditation.

While you can practice meditation easily on your own, you can attend special meditation centers or group classes led by trained instructors if you prefer group meditations. But if you choose to meditate on your own, here are some ways you can practice meditation:

  • Breathe deeply: Breathe deeply and slowly. As you breathe deeply, focus all your attention on your breathing. Listen to the movement of air and feel the flow as you inhale and exhale through your nostrils. When your attention wanders, gently return your focus to your breathing.
  • Scan your body: Alternatively, you can focus your attention on different parts of your body. Feel your body’s various sensations — pain, tension, warmth, or relaxation. You can combine body scanning with breathing exercises and notice how breathing relaxes different parts of your body.
  • Repeat a mantra: Create your own mantra, whether it’s religious or secular. Some examples of religious mantras include the Jesus Prayer in the Christian tradition, the holy name of God in Judaism, or the om mantra of Hinduism, Buddhism, and other Eastern religions.
  • Meditate while walking: You can combine taking a walk with meditation. This technique can be used when walking anywhere, such as in a tranquil forest, on a city sidewalk, or at the mall. Walk slowly, and while you walk, focus on each movement of your legs or feet. Don’t focus on a particular destination; instead, concentrate on your legs and feet, repeating action words in your mind such as “lifting,” “moving” and “placing” as you lift each foot, move your leg forward, and place your foot on the ground.
  • Pray while meditating: You can use prayer to meditate. In fact, this is the most popular form of meditation. You can pray using your own words or read prayers written by others. Talk with your rabbi, priest, pastor, or any other spiritual leader about possible resources.
  • Read and reflect: You may also read poems or sacred texts and then take a few moments to quietly reflect on their meaning. Alternatively, you can listen to sacred music, spoken words, or any music you find relaxing or inspiring and then reflect. It’s a good practice to write your reflections in a journal or discuss them with a friend or spiritual leader.
  • Focus your love and gratitude: This is mostly used by Christians, as they reflect the love of Jesus for them and their gratitude for it. You can practice that with the image of someone you love.

Developing your meditation skills

Meditation takes practice, so don’t judge your meditation skills, especially when you are starting out, as this would only increase your stress.

No matter how long you’ve been practicing meditation, it’s common for your mind to wander during meditation. So, what you do is when your attention wanders, slowly return to the object, sensation, or movement you’re focusing on. You can experiment to find out what types of meditation work best for you and what you enjoy doing.

One more thing, there’s no right way or wrong way to meditate — what matters is that meditation helps you reduce your stress and feel better overall. Adapt meditation to suit your needs at the moment.


What are the elements of effective meditation?

Key elements include a quiet setting, a comfortable position, focused attention, relaxed breathing, and an open attitude. These elements contribute to creating a peaceful and conducive environment for meditation.

How can meditation help traders become more self-aware?

Meditation increases self-awareness by helping traders recognize rising emotions during trading. This heightened awareness allows them to implement strategies to manage and navigate their emotions effectively.

How can traders practice meditation on their own?

Traders can practice meditation on their own by incorporating techniques such as deep breathing, body scanning, repeating a mantra, walking meditation, praying, reading and reflecting, or focusing on love and gratitude.

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