Metacognition: Breathe Before You Pull The Trigger

In sports, you have to make lightning-quick decisions. The faster you do it, the better. When playing a sport, the delta between your thoughts and actions needs to be nearly nonexistent.

Part of what makes a Michael Jordan or a Lionel Messi so devastating is that they think and move faster than their opponents. They put you in a position where your reactions are predictable, and then they act faster than you so that you are always one step behind. Consider this goal by Messi, or this MJ highlight reel. In high-speed racing, it is particularly crucial, as it could literally save your life and/or someone else's. In these situations, a breath is too long—there is no time for reflection, just action.

Snipers must instead take an extra breath before they pull the trigger. This is the typical pattern of breath leading up to the shot. They breathe normally, and then just as they are about to pull the trigger, they take a deep breath or two and shoot toward the very end of the exhale. Why? For perfect aim.

When you inhale and exhale, your body moves and any small movement can mess up the shot. At the very end of an exhale, your body is perfectly still which sharpens your aim. That final breath gives you one last moment to consider if conditions are truly optimal and if it’s worth the shot—a final moment of reflection before you act.

In both these activities, you are trying to get the body to execute the mind’s will perfectly as if they are one. In sports, you want to be in this state throughout the game, but in shooting, you bring yourself to this position for the crucial moment. You therefore do all the preparations beforehand: finding your target, studying them, coming up with a plan, choosing a point of attack, adapting to present-day conditions, lining up the shot, waiting for things to align, and when they do, honing your focus, and taking the fatal breath.

Unlike shooting, trading allows you more than a breath to reflect. The market isn’t going anywhere, but that doesn’t mean you spend the time waiting for optimal conditions—there are none. That’s not what patience is about. What you should do with that time is think (or better yet write—which is another form of thinking), assuming you’ve done all your other preparations. More importantly, you think about your thinking. You examine your feelings and how they have influenced your analytical process: were you on tilt? Are you greedy? Overly fearful? How much conviction do you have? Are you trading off opinion or insight? Have you overlooked anything? What is the plan?

The great thing about trading is that you always have enough time to reflect on your analysis, how you did it, and how you stand presently. This metacognition process reveals the most important information of all in trading—it reveals your thinking and your psychology. You can catch yourself right before you do something wrong, and reassess the strength of your ideas after detracting your emotions and counteracting your biases. It allows you to clear your mind and properly balance the risks before deciding whether or not to take them.

This is not to say there is no place for quick thinking in trading. Sometimes your speed of thought and execution will be crucial. But in trading, quick thinking is about decisiveness rather than speed, so you still need to reflect. Decisiveness means you don’t hesitate when it is time to act which requires that you have already made up your mind and done your preparations beforehand.

Of all the factors that count towards my trading success, I think that metacognition is the most important because it is the one thing I’ve noticed that greatly improved my trading. Trading is not purely a mental game. The body is involved but not quite to the level of sports. The reason shooters have to take that final breath is because we aim with our whole body and in between breaths, our aim is sharpest. The book “The Hour Between Dog and Wolf: How Risk Taking Transforms Us, Body and Mind” explains how trading involves our bodies too, so metacognition, done well, has the effect of putting us in the best state to make good decisions. For the best results, include writing as part of your metacognition. Don’t just write out the trade idea, write what you think and feel too.

If you ever compromise on your trading process, never skimp on metacognition. You know you have not skimped when you get to a state of tranquility which happens when you have understood what risks are and decided if you accept them or not. Some traders believe that you shouldn’t trade off gut instincts, and others swear by it. Only your own metacognition process can reveal that. I have found that after I’ve done a thorough analysis and I’m in the metacognition process, my gut can ring the alarm bells or be characteristically quiet and if I ignore the alarm bells, I tend to pay the price.

There is no one right way to trade. Everyone must do more of what works for them and less of what doesn’t. All that matters is that you make profits consistently. Metacognition is part of my process, actually the most important part and I believe it helps a ton, but it doesn’t guarantee success. It is helpful but not necessary.

This is the world’s most soothing music, said to reduce anxiety by as much as 65%. Someone made a 10-hour version of it which I find helpful to focus.