Daytrading the S&P500
A Visual Approach

Emotional Control

In trading, preparation is mostly mental and emotional. Establish a daily routine before trading each day...

1. Meditation

• Posture. A centered, balanced posture creates feedback with you mind, helping to bring your mind into a balanced state. For meditation, it is important that the back be straight and the head up. Some people prefer to mediate in a chair but they should be aware that both feet should be flat on the floor. If you prefer to meditate on the floor, use a cushion to elevate your hips so that they are higher than your knees when you fold them.
  
  
• Breathing. Proper breathing offers immeasurable physical and mental benefits if done properly. Breath in slowly and deeply, allowing your abdomen to expand with each inhalation.
  
  Many meditation masters suggest counting to 10 slowly as you inhale and, upon reaching the ten count hold the breath momentarily and then begin to exhale, also slowly and deeply. As you exhale, again count to 10 and allow your abdomen to deflate. After 3 to 5 minutes of breathing in this manner, you will feel very relaxed.
  
• Awareness. As thoughts enter your mind, observe them as they come and go but do not become involved or engaged with them. They will ultimately stop. Some meditators can achieve this state very easily but others may require more practice.
  
  Beginners to meditation may find many thoughts moving quickly through their minds; just observe them as they move into and out of your awareness. Focus on your breathing.
  
  
• Emptiness. Once the thoughts and images stop, a state of mindlessness can be achieved. This state can last as short as a few minutes or as long as several hours, depending on the time available to the meditator.
  
  As you gain practice and experience meditating, you will experience the act as very relaxing, emotionally centering, and emerge very refreshed.

2. Visualization.
Once your mind is centered and empty of thoughts and images, attempt to visualize in your minds eye the cycles and price action that make up the trading day. Visualize being aboard each cycle, regardless of direction, for as long as possible. Once a cycle has made a high or low, exit that wave and get on the next one moving in the opposite direction.

As daytraders, this is what we attempt to do; visualization of riding price action while in a mindless state allows us to easily access this process when needed during the trading day.

3. Self-Talk
After your price action visualization, you may find it beneficial to silently talk to yourself. The nature of this self-talk may be general or if you have a specific trading problem, this is a good way to reprogram your mind. Be sure to frame your statement in a positive way; use "I will," "I am," and "I can" rather than the negatives "I won't" or "I can't". For example: use "I will cut my profits early" rather than "I can't afford to lose much money on losing trades".