(NOTE: This is not an advertisement! It's a report of my first attempts to introduce biofeedback into my trading routine.)
Several weeks ago I advised in the YTC newsletter that I'd bought an emWave2 biofeedback device. My plan was that I'd experiment with it over the following 6-8 weeks and report on it's effectiveness as a state management device for traders.
Quick summary… I like it… and I'm going to keep using it!
How I Discovered The emWave2
I'd heard of biofeedback being used by traders before, through the excellent blog posts and books by Dr Brett Steenbarger (see here for all three of his books under the Trading Psychology heading).
But I'd never had any thoughts of experimenting with it myself. The last thing I wanted to do was to be "wired up to a computer" while trading.
Then two months ago I got an email from YTC Price Action Trader reader, Jeff, in which he shared the following article link:
This is quite an interesting article about NFL kicker Billy Cundiff and his use of the portable emWave to place himself into peak physical and mental state prior to performance. This got me interested. And a quick search through Dr Steenbarger's old blog posts and a review of his books, led me to the discovery on page 84 of The Daily Trading Coach that the emWave is the same unit used by Dr Steenbarger himself.
Now I was really curious… and I just had to try one!
What is Biofeedback?
Biofeedback is the use of instruments to monitor certain components of our physiological state. The components will vary depending on the device, but may include heart rate, brainwaves, muscle tone or skin conductance. The intent is that through awareness of our physiological state we may then take conscious action to either maintain the state, or to place ourselves in an alternate desired state.
What Does the emWave2 Monitor?
The emWave2 monitors your heart rate variability (HRV). The heart rate that you may be familiar with is an average figure, usually expressed in beats per minute. I must admit though that I was surprised to find out how much the heart rate actually varies from beat to beat when we're looking at real-time data rather than an average figure. It cycles in an approximate sine-wave pattern. When relaxed and operating with a peaceful mind our HRV produces a smooth flowing sine curve (evidence of what is termed high coherence). When stressed in either body or mind, the pattern becomes more jagged and disjoint (evidence of what is termed low coherence).
Used as a portable hand-held device the emWave2 provides us with a light display representing our current level of coherence. Or attached to our computer we can also receive a graphical display of our HRV.
That's my layman's understanding anyway. If you want to read an article on the science behind emWave technology and the measure of HRV, you can find it at this link here: http://www.heartmath.com/personal-use/emwave-science-behind.html
How is Biofeedback Relevant to Traders?
Peak performance requires that we place ourselves in (and maintain) our ideal trading state. Typically this is a state of relaxed alertness; mind clear and body relaxed. The emWave2 requires this state in order to display a high level of coherence.
As traders we can therefore use the emWave2 in two ways:
Using it to place ourselves into an ideal trading state prior to commencement of our trading session; and
Using it to monitor our physiological state during the session and to avoid trading when evidence shows us influenced by stress. Relaxation techniques (or a break from trading) may then be used to return to our ideal trading state.
I started my evaluation sceptical about the validity of the science behind the emWave2 and how accurately it could measure and monitor my physiological state. In addition, I have long studied relaxation exercises of various types so wasn't sure I'd gain additional benefit from the emWave2 beyond what I was already able to do.
So I put the device to some non-trading tests and my concerns were quickly put to rest.
Experiment showed that I was easily able to consciously move myself in and out of high coherence through adjustment to my physical or mental state. A relaxed body with regular and slow breathing and a clear and calm mind would bring me to high coherence. Tensing my body, holding breath or adopting stressful thoughts and emotions all lead to reducing coherence.
Testing the emWave while trading gave me even greater confidence in the tool. Whenever it identified a drift out of high coherence I was able to pause and consider my physiology. Every time I was able to identify examples of either poor posture or tension, irregular breathing, or mental or emotional stress. More often than not I find I'm simply holding my breath. And Interestingly I find my focus often stuck on the lower timeframe charts. Through identifying this I am able to correct this deficiency.
I now have a high degree of confidence in the accuracy of the machine in distinguishing between ideal and less than ideal trading states.
You'll see in the image below an example of my own HRV while trading relaxed vs trading with stress.
I do not monitor these graphs while trading. I use the device in a completely portable manner. The emWave2 unit sits on my desk and reads my HRV through an ear sensor. Generally I find this to be quite comfortable and apart from the occasional problem with an itch developing in the sensor area after about 20 mins, I find the sensor does not distract me. The unit has two ways of reporting coherence. One is through lights (green = high, blue = medium, red = low). The other is through a tone which beeps each couple of seconds in high coherence, an alternate tone in medium coherence, and no tone in low coherence. I'd prefer that the tones only beeped when in low coherence. This is the zone I wish to avoid. Having a constant tone when all is working well is distracting. I'd rather only be distracted when the emWave2 has identified a problem.
But this is only a minor criticism. The tones are easily turned off and I choose to use the light display only.
My scan patterns have now been expanded beyond my charts to also include the emWave2 unit. In this way I can constantly monitor my current level of coherence. If it's medium I will simply reset my posture and breathing and usually within 15 seconds it's returned to green. If red, then I'll stop all trading and actively conduct a relaxation session to get back to green. Again this takes only 15-30 seconds at most. This is the key benefit for me – the ability to objectively identify a trend towards low coherence, allowing me to reverse this trend and return quickly to my ideal trading state.
Summary – And Why I Will Continue to Use the emWave2
The emWave2 is not specifically designed for traders. However, like all types of biofeedback machines it does have application in the trading world.
A key part of my trading (and I'd argue a necessary component in the success of all discretionary traders) is to be able to maintain as close as possible to our ideal trading state. Part of this relies on cultivating a clear and calm mind, body and soul. I have for many years used relaxation and breathing techniques for this purpose. And various triggers throughout the trading session to "check" on my current state. Unfortunately though, any "check" of my state has been a rather subjective thing. And it's widely known that a stressed person is less likely to recognise and accept their current state of stress.
The beauty of the emWave2 is that it provides an objective measure of my current state. This is the real value of this tool, in my opinion. I am no longer reliant on subjective assessments. The machine clearly shows when I am not operating with the highest levels of coherence, and I can then take appropriate action to correct this.
While I cannot quantify any improvement to my trading results, I can say that I believe in the application of the emWave2. Whenever it's indicated less than ideal coherence, I have been able to quickly identify where my mind or body are stuck, in either tensed muscles, poor posture, irregular or shallow breathing etc. Correcting these deficiencies does always result in the return of the emWave2 to higher levels of coherence. So the tool does appear to work in the way it's designed.
And if all goes according to plan, a clearer and more relaxed mind and body will lead to improved focus, better decision making and (hopefully) greater profits.