Lessons from the Pros

Specialty Skills

Hacking the Flow State for Better Trading Results

Back at the turn of the century it was called a mystical experience by Wm. James, a ground-breaking psychologist who ushered in critical ideas before their time.  Later, through the work of Abraham Maslow in the 1960s, it was called a peak experience.  Fast forward to the 70s and it was known as the zone, and finally as Flow in the 80s and beyond through the work of Mihaly Csikszentmihalyi, co-founder of Positive Psychology and author of  Flow: The Psychology of Optimal Experience.

What Is the Flow State?

The Flow State is a state in which people are so involved in an activity that nothing else seems to matter; the experience is so enjoyable that people will continue to do it even at great cost, for the sheer sake of doing it (1990). Csikszentmihalyi interviewed athletes, musicians and artists to know when they experienced optimal performance levels. He was also interested in finding out how they felt during these experiences. Csikszentmihalyi developed the term flow state because many of the people he interviewed described their optimal states of performance as instances when their work simply flowed out of them without much effort.

Focused athlete kicking a soccer ball in a stadium.

In his writings, Csikszentmihalyi described the state of flow in 8 characteristics:

  1. Complete concentration on the task
  2. Clarity of goals with reward in mind and immediate feedback
  3. Transformation of time (speeding up/slowing down)
  4. The experience is intrinsically rewarding
  5. Effortlessness and ease
  6. There is a balance between challenge and skills
  7. Actions and awareness are merged, losing self-conscious rumination
  8. There is a feeling of control over the task


As we consider each characteristic it becomes clear that this is a powerful state that truly represents optimal deployment of both internal and external resources. It is a time when you are focused on what matters most while being aligned in body, mind, and emotions going in the same direction and for the same goals.  For trading purposes, we call this bringing your A-Game to the platform, trading in your highest and best interests with your highest and best trader.

The Science Behind the Flow State

In the flow literature, the term Transient Hypofrontality is used to describe how in a flow state your Pre-frontal cortex, which initiates your executive functions, is offline.  Since hyper denotes an increase and hypo a decrease in a variable, hypofrontality refers to the lessening of activity in that part of your brain.

Your frontal lobe is located right behind your forehead.  However, it is important to note that only part of the frontal lobe actually shuts down, the dorsolateral pre-frontal cortex which is responsible for your sense of self.  The medial pre-frontal cortex which is mainly concerned with internal generation of ideas and is quite creative, remains online. So, that combination of the dorsolateral pre-frontal cortex experiencing some level of dormancy creativity of the medial pre-frontal cortex remaining unhindered seems to allow us to enter the Flow State.

One’s propensity for lateral thinking, risk taking and risk management tend to increase while in a flow state and learning was shown in studies to increase by a factor of 50%. In practical terms, if it takes the average person 10,000 hours to become an expert, the person learning in the flow state would effectively accomplish the same in 5,000 hours. That’s impressive!

Herbert Benson, Harvard professor and author of the international best seller The Relaxation Response documented his research on the four stages of flow states:

  1. Struggle with a concept, behavior or problem that has you confused, overwhelmed and frustrated could make you susceptible to falling into a flow state. The brain wave associated with this chaotic internal state is beta, one of the 5 naturally occurring brain waves that are associated with various mind-states.  Beta is, generally speaking, a normal waking state wave with a range of 13cps (cycles per second) to about 30 cps.  The upper extremes equate to being stressed where cortisol – a stress hormone is released along with other brain changes that are connected to lapse in judgment, vague thought structure, lack of adequate recall and an emotional reaction that is often fear based with other feelings of anxiety, doubt, worry and anger to name a few.  A neurotransmitter associated with this state in beta is norepinephrine which is the brain’s equivalent of speed since it engages the Sympathetic Nervous System or Fight/Flight/Freeze response to stress.
  2. Next the system goes into a relaxation response. The predominant brain wave here is alpha, 8 – 13cps which is associated with being alert and relaxed.  Alpha is a very popular wave because it is intimately involved with the engagement of the parasympathetic nervous system which is the other side of the autonomic nervous system that is connected with lowered heart rate, reduction of stress levels, and a clearer more coherent approach to your challenges that could include, of course, the trade.
  3. The actual flow state is next. The brain wave associated with this state is theta…a highly sensitive internal state that is related to REM sleep (rapid eye movement) or dreaming. Theta is also connected to trance states like hypnosis and meditation. As mentioned in the above, there is also the decreased firing of the dorsolateral pre-frontal cortex which reduces your sense of self and a feeling of oneness with the universe is also often reported as well as a heightened intuitive connection with many of the brain’s resources operating through the unconscious.  People also report time slowing down or speeding up along with a substantive reduction in fear, anxiety, doubt, worry or anger.
  4. When the flow state is over, then you recover. Like any intense experience that engages the entire system and depletes dopamine and other neurotransmitters, you must recover. For example, get plenty of rest, eat healthy foods and provide some down time to process the experience.  After the recovery you’ll bounce back stronger and the flow effects will transfer to other activities, making you more effective across all endeavors, likely including trading.

How to Enter a Flow State

Free Trading WorkshopLet’s explore briefly how to get into the flow state.  To experience the flow state, stay away from the attention-robbers common in a fast-paced life. Turn off your smartphone.  Also, you must consider the balance between the difficulty of what you are doing and the ease of it.  For example, when a challenge exceeds your skills, it will pave the way for anxiety and stress. Conversely, when the level of skill exceeds the challenge, the trader becomes bored and distracted.  Also, flow states are intrinsically rewarding.  In other words, they bring you joy. This is important due to the accompanying neurotransmitters and hormones that are released such as dopamine, serotonin, oxytocin, endorphins and others which are connected to feeling good, clear, on target and experiencing metaphorically, a tail-wind that propels you through the challenge.

As this relates to a trading, you will be on target, on task and on purpose as you feel a level of undistracted euphoria and a sense of being consumed by the process with a care-free attitude about the outcome. You would likely be engrossed by the fine details of the trade in the same way that an elite athlete is in tune with the threads on the ball, not just the ball itself.  Those in the Flow are driven by the unconscious, where conscious thought temporarily has gone off-line and they are putting it all on the line.

This is what we teach in the Mastering the Mental Game online and on-location courses.  Ask your Online Trading Academy representative for more information and get my book, From Pain to Profit: Secrets of the Peak Performance Trader.

Joyful Trading


DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.