Improving Trader Psychology Through Neuro-Feedback
I was planning on continuing with part 2 of the Best Support & Resistance levels article, but someone came to me with the following question just yesterday;
Do you know about ‘binaural beats’ and if so, would you comment on their possible uses regarding performance/trading. thanks”
First off, many of you are probably asking ‘What are Binaural Beats‘?
Ironically, I’ve been working with these for over a decade as my specialty in Neuroscience at the University was Human Learning & Memory. I was studying methods how to improve memory performance, but also the learning process and how to accelerate it.
Binaural Beats are also known as Binaural Tones. They are sounds/tones which produce specific stimuli in your brain, but that will not suffice so lets dive into them more deeply.
How Do Binaural Beats Work?
Basically, your brain when perceiving two tones with subtle differences between them (or with frequencies slightly different than each other) will pick up the difference between the two frequencies when the difference is < or = to 30Hz.
When this happens, the brain will hear this difference as a binaural tone/beat.
But this is where they effect the brain.
You have probably heard of all the different brain waves which tend to correlate to different patterns of thinking. The breakdown is below;
Gamma Waves (> 40Hz) are usually associated with fear, perception, problem solving and strong mental activity
Beta Waves (13-39Hz) are associated with busy/anxious or nervous thinking, active concentration, paranoia and arousal
Alpha Waves (7-13Hz) are associated with a state of relaxation while being fully awake. Possible pre-sleep, REM sleep, & Dreams
Theta Waves (4-7Hz) are associated with deep meditation, relaxation and NREM sleep
Delta Waves (<4Hz) are the product of deep sleep, loss of body awareness
How does this relate to Binaural Beats?
Remember the part about the difference between the two frequencies creating the binaural beat you hear in your brain? Well, if the difference created from two frequencies is say 10Hz, then your creating a binaural beat which will help to stimulate Alpha Waves in your brain. These waves are associated with being in a state of relaxation while being awake.
Basically, the brain (through a frequency following response mechanism) when it receives a stimulus such as a binaural beat that has a frequency associated with a particular brain wave (i.e. alpha, delta, theta, gamma, beta), your brain will adjust its frequency towards the one it is hearing.
This is where Binaural Beats become useful and is called by neurophysiologists as Entrainment.
Entrainment (also known as Brainwave Synchronization) is using frequencies (and the frequency following mechanism) to stimulate your brain into a particular dominant frequency.
How does this help me as a trader?
By using binaural beats, you can train your brain to be in a more optimal state for trading (Alpha or Theta Waves) which are associated with a more relaxed state and meditative state. Being anxious, fearful, unfocused, paranoid, etc. will obviously cause you to make more emotional decisions (fear of losing so you close your trade early), more irrational decisions (I just lost and have to make it up, so i’m doubling my position size), essentially clouding your mind which needs to be clear, alert and sharp when trading.
Your mind is your main tool for trading, so the sharper it is, the better decisions you will make. The worse the state its in, the more likely you will make poor trading decisions, along with repeating negative patterns which are accompanied by certain brain waves and neurological states.
Binaural beats are a neuro-feedback technique to train your brain to be in an optimal state while trading. From my experience, this is far superior to biofeedback, such as strictly monitoring HRV (heart rate variability) which can often be a secondary effect from your mental state.
On top of it, using just biofeedback only informs you when your not in an optimal state. Although this is useful, you are still left with the work to get yourself back into optimal state. Try going from being really angry or frustrated (about a big loss, or anything) to optimal thinking in a short period of time. Not easy is it, especially when your trading and money is changing hands fast, or you have to make quick decisions.
This is why I prefer neuro-feedback as a far more valuable tool, particularly binaural beats and isochronic tones because they are training your mind to be in that state through the frequencies which create a neurophysiological pattern of thinking more conducive to trading.
Where Can I Listen to Binaural Beats?
Many of you may be asking, where can I get these binaural beats? The easy way is YouTube where you can search for them and find plenty of samples. I use much more tailored binaural beats through a company called Entheos which you can find here.
The product line is through their ‘Daily Mojo‘ section.
I listen to about 20-30mins a day of these tracks before I start my trading day, but after I’ve done my morning yoga and meditation.
I also have another training program I use called LimitlessIQ which has a large suite of products for tailored states you are wanting to create (zen like focus, stress relief, faster brain cognition, etc). I also listen to 20-30mins of these before starting my trading day, so a total of 40mins to an hour of preparation each day just using these techniques. If you think about it, all professionals prepare before they perform, and usually, the level of preparation they engage in is related to their level of skill or challenge.
It should be noted LimitlessIQ uses a slightly different technology called Isochronic Tones. The difference is instead of creating the desired brain frequency through two tones with the brain picking up the difference between them, Isochronic tones are evenly spaced that turn on and off rapidly. So they are not relying upon a combination of two tones, yet create the intended frequency through the on/on effect.
Eyes Wide Shut
I personally find both highly effective and can literally feel the physiological changes in my brain when listening to these in seconds. You can play them while trading, but ideal is to do so for 20-40mins before you start your trading day, with your eyes closed just listening to the beats.
Why eyes closed?
Your brain is wired to take in more data through your eyes than anything else (about 70% of all data your central nervous system takes in). So when your eyes are open, you will be reducing your bandwidth by taking in visual stimuli. By having your eyes closed, you are, in effect directing all your energy into creating the dominant brain waves which will help to produce a more optimal neurological state for trading. It should also be noted binaural beats are best listened to through headphones so you can easily isolate the difference in the sounds.
Binaural Beats are a tool to help improve your trader psychology simply by altering your neuro-physiological patterns which underlie your thinking. By training (or entrainment), you can stimulate your brain and thinking patterns to match a more relaxed state which will ultimately improve your trading.
Neuro-feedback is more preferable than bio-feedback as it offers you more information, but actually helps to train your brain to create more beneficial thinking patterns, while bio-feedback means you have to adjust your state. By listening to binaural or isochronic tones per day, you can help to create a more optimal neurological state prior to trading so you can make the most clear and relaxed decisions while trading.
Keep in mind though, these are not tailored states for trading – just associated states which will most likely improve trader performance through more optimal thinking patterns.
I will have more to say around this come mid-late July, as I am working directly with a Neuroscience lab in California that I’ll be meeting with soon. But imagine what it would be like if you could train your brain to work in the most optimal way for trading. Imagine being less harangued by emotions, fear, distraction, etc. Then imagine what this could do for your trading.
To be continued…
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