2.7 Visualization

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Visualization

Visualization – is a mental practice or simulation of an event, basically you suggest a certain reality to your mind. There are a lot of books tell you simple truths “If you dream of it really hard – you’ll achieve it!” or something like that. While that seems to be true, that is not enough to perform the visualization exercise in a right way, actually, very few people know how to do that right and how to apply it.

Before moving on to explain any details, there are a couple of things that should be clarified. If you’ve read The Talent Code by Daniel Coyle, you already know that skill is a cellular insulation that wraps neural circuits and grows in response to certain signals. This means that if you repeat your tennis serve over and over again, you engage the corresponding parts of your brain repeatedly. You spark the same neural circuits again and again, which forces the brain to produce more insulation (also known as myelin) around these particular circuits. That insulation helps to avoid signal loss because neural signals are essentially electricity, resulting in an improved tennis serve skill. However, at its core, our brain cannot distinguish between reality and imagination. This means you can trigger the same neural circuits through a proper visualization exercise, allowing mental practice to reinforce deliberate practice. There is a famous study by Australian psychologist Alan Richardson that compared the progress of basketball players shooting free throws. The first group performed actual free throws in the gym, the second group practiced proper visualization exercises, and the third group did neither. The results were as follows: the first group improved by 24%, the second group by 23%, and the third group showed no progress. This demonstrates that visualization is a very powerful tool, provided you know how to use it properly. While visualization is relatively new in the context of trading, it is widely used in sports (most Olympic athletes have psychological coaches, and 80% of what they do with them involves visualization exercises) and therapy (where it is used to treat phobias).

Most common uses of visualization in trading context:

  • Suggesting good trading behavior and best practices
    • You practice mentally being at work at the right time
    • Going through your preparation routines
    • Being calm and disciplined during market hours
    • Sticking to your plan during the trade
    • Review your performance at the end of the day
  • Setting goals
    • Imagine yourself achieved a goal
    • Visualize how it actually happened by consistently following best practices over time
  • Managing emotions
    • Practice maintaining the right emotional state, as your emotions can shift when money is on the line.
    • Practicing proper reactions to challenging situations, for example, when you lose money, visualize staying composed instead of getting angry or upset.

Visualization guide

First of all, you can’t visualize “wrong.” For example, think of a dog right now. Each person will imagine a different picture of a dog—someone might picture a collie, another might think of Scooby-Doo. There’s no right or wrong in what you visualize. If you’re asked to identify a place where you feel your future is, and you can’t sense it, simply choose the first direction that comes to mind—that’s where it is.

Mediatation (relaxation exercise)

Suggestions stick more easily when you are relaxed, calm, and able to focus. If you are busy or distracted, it’s not the right time for the exercise. If you already practice meditation, visualization is a great complement since you’ll be relaxed anyway. If you don’t, you can use this simple relaxation exercise:

  • Find comfortable place (recliner/sofa/bed)
  • Become aware of tensions in different parts of your body and remove them
    • Scan your body from the top of your head down to your toes by gently triggering the corresponding muscles. This will help you identify areas of tension.
    • Use your hands to locate and massage tense areas, such as your jaw or shoulders, which are often tight.
    • Move around a bit—bend, twist, or stretch. This can help you find and release tension, especially in your back.
  • Start deep breathing
    • There are many ways to breathe deeply; find the method that works best for you. The goal is to lower your pulse rate
    • You can inhale quickly through your nose and exhale very slowly through your mouth
    • Alternatively, inhale and exhale deeply and slowly at your own pace
    • Try square breathing (look it up online). Again, use whatever technique feels most effective for you
    • Mentally count the lengths of your inhales and exhales to help maintain focus
  • Try to avoid thoughts
    • Shift your focus to your breathing without changing it—just be aware of it. When a thought pops up, gently redirect your focus back to your breathing
    • Don’t be hard on yourself if you can’t avoid thoughts, when you notice you are thinking about something just get back to counting your inhale and exhale lengths
    • Human mind generates 60k-80k thoughts per day, that’s around 1 thought per second, it’s a good result when your mind is clear as long as 3 seconds

After 5–10 minutes, you should feel a lighter head. That’s the ideal time to move on to your visualization exercise.

Suggesting good trading behavior and best practice

A mental walkthrough of your daily routines and best practices is one of the most effective visualization exercises. You want to visualize what it’s like to have a good trading day as a trader, focusing on doing everything the right way. This exercise is not about PnL, numbers, or probabilities—just about the process:

  • Visualize yourself arriving at work early, feeling relaxed, focused, and in a good mood.
  • Imagine yourself performing your morning preparations: looking at the markets, making notes, reading the news, writing down key levels, and brainstorming ideas.
  • Picture the market opening. Visualize yourself reacting calmly to the opening prices, placing the right orders, and executing your trading plan as the market aligns with your criteria.
    • Imagine yourself entring the trade
    • Imagine a position going against you, it’s ticking, ticking and triggering you stop loss price, you get out, no regrets, no emotions, just a losing trade
    • Similarly, imagine taking profits. Price moves toward your target, or another valid reason to exit arises, and you take profit in a disciplined manner.
  • Finally, picture the market closing. See yourself reviewing your trades, filling out your trading journal, noting the levels to watch in the future, setting alerts, and then closing everything. Visualize yourself leaving the desk with a sense of accomplishment, knowing you worked hard and became a little better today.
Enhancing emotional impact

The way you represent an image in your mind greatly influences your mind-body connection. For example, a movie has a stronger emotional impact when you watch it on a big screen with good sound. Here are some tips to enhance your visualization so it has a greater emotional impact:

  • Use dissociation, imagine watching yourself doing something, as if you’re watching a movie of yourself in action. This technique is often used to treat phobias. For example, if a patient has claustrophobia, they might imagine themselves taking an elevator from the 1st floor to the 2nd, observing their reaction in a third-person view to show the absurdity of the fear.
  • Make movie with yourself resonate with you