Equanimity: What Is It And Why Do Traders Need To Be Aware Of It?

Before we advise you how you’ll benefit from applying ‘equanimity’ to your daily trading rituals, we need to first explain what it actually means.

‘Equanimity’: Is the mental or emotional stability or composure of a person, especially when placed under tension or strain. Within trading the tension or strain can be self-inflicted, it is not entirely down to the markets. I’m sure we can all say we’ve been in a position like this. It comes with the territory!

It’s down to the trader’s personal preference on how they choose to apply ‘equanimity’ whilst trading; you have to find a solution that works for you. Some traders use meditation as a form of relaxation, just 15 minutes a day can be enough to reset your mind. I personally prefer to sit in my sauna, it helps me deal with my emotions.

When you are in a relaxed state of mind — it becomes easier to handle situations. You are more focused, calm, less likely to make mistakes, and over time you gain wisdom to help you observe your feelings and emotions. Applying ‘equanimity’ can also provide the option to put in place creative thinking, this is an important factor in your personal development together with your trading strategy which is equally as important.

All traders experience winning trades and losing trades. It is imperative that not only you maintain your trading capital, but also your emotional capital. You must at all times continue to be focused and positive — there is no need to experience the emotional rollercoasters you have done in the past.

Ray Dalio, the founder of Bridgewater Associates, manages one of the world’s largest hedge funds. When asked the question ‘What is his secret in how to handle the pressures of Wall Street?’. He replied via applying ‘equanimity’ in the form of meditation. “It works because it brings you into your subconscious mind and it gives one an ‘equanimity’. Basically a calm centred-ness in the midst of a storm.”

Once you have mastered ‘equanimity’, after a day’s trading, no one should be able to make out if you lost or made money, as you are in control of your emotions…

Balanced + Calm + Focused + Patient + Relaxed = EQUANIMITY

Now go forth and relaaaaaax…