You can never take enough breaks in this game!

The key to great trading lies in what you do away from it...

Good evening valued subscriber,

Last Sunday’s premium post I took a deep dive into the psychological aspects that typically cause budding traders to blow up. No trader, winning or losing can escape losses. But the difference between consistently ending the year in front or at a loss depends on the mental framework in place which I discussed at length.

One such trait is mental endurance which I want to touch on in this post. If you were half as eager as I was in the start of my journey you’ll be able to empathise. Starting out, I was firing up every race, every day for 4 months straight before I turned profitable.

When I learned to trade cricket I was waking up through the early hours during the winter, sleeping from 9am-2pm before firing up the ladders to get back to work on the racing. I appreciate that everyone learns at their own pace but since I had no income to fall back on and was desperate to make money , I had that fire in my belly to crack this thing as soon as possible.

As exciting trading is for a living, once the novelty wears off, you’re left with a job that requires the daily risk of losing money. It’s a stressful, energy sapping bit of work that requires every ounce of your concentration. And this points to an important lesson: even a job as exciting as profiting weekly from watching sports will not bring permanent happiness. Like all shiny things, the novelty wears off. So choose a job with the least downside.

In school I was a pretty good student. By the time I got to college, I skipped virtually all my classes in order to play golf. After practise I’d walk to the gym, train for an hour and walk back. By the time I got to uni, not much had changed but I was partying 2/3 times a week. From London, to Birmingham to Manchester. Whilst still playing golf and training 5 days a week.

What I took for granted when I start trading was that my testosterone and energy levels were raging. I was young and active. My healing abilities were Wolverine like. I could rave, golf, box, sleep 4 hours, slam 2 coffees and get back to it.

Me health was only put into perspective when I started trading. Smartphones were still a novelty in the early 2010s and going from spending a couple hours of screentime daily to up to 12 hours took it’s toll: my weight increased, energy and strength was shot to pieces and I needed double the sleep to recover.

Technology has evolved to a point where we no longer need to exchange our physical labour for money. We can make money sedentarily which we are not designed or accustomed to. If you spend the majority of your day on your butt, clicking a mouse watching a screen, your health will deteriorate rapidly.

The frustration is getting back your health which is far harder than losing it. But ironically it’s not until you lose it do you appreciate it. I can look back and remember how I looked and felt. Fighting off my lethargy and low energy was a tough battle but now things have come full circle, I now appreciate the importance of work-life balance more than ever. To this day, I look for any excuse to take a day off or at least cut it short. Not because I do not want to make money, but I know too well the stress and strains of trading. Nothing good happens when you clock up excess screentime, especially as a trader. It just takes one mistake after a really good session to send things spiralling out of control. Your discipline and will power wears off towards the end of a session. Some of the worst mistakes I’ve made have happened at the end. And because there’s no chance of recovery, the temptation to make it back can make you do the silliest of things.

Every trader, winning and losing overtrades. Sometimes logging out even after a really short profitable session can be long term +VE with the right perspective. The market has no feeling about what you did or didn’t make. Becoming detached from the process means you have the will power to fold early and do something away from trading, even if it means leaving some meat on the bone. There’ll always be another, better opportunity to take advantage off.

I feel like many traders are quick to forget why they do this work in the first place. We want to control our time by making money on our own accord so we can do the things we really want to do. We won’t get back time but the opportunity to make money will never disappear.

Overtrading is essentially addiction. The mark of a good trader is how little time he can spend in the market and make money. There’s no glory in slogging away, giving back what you make and chasing back what you lost.

Being precise with when you enter means ignoring a lot of the noise. The aim is not capture all the value. The aim is to position yourself in the most likely scenario to profit as frequently as possible.

Spending time out doors, getting vitamin D, dieting correctly, exercising and socialising is the best recovery you can get. What trading doesn’t demand physically is more than offset by the mental endurance required to think and behave correctly. Discipline does not apply to one facet of life. In this instance trading. Discipline rather, is an attitude, a state of being that should spill over into all parts of your life. Professional and social. You can’t expect to trade effectively by overworking or having a chaotic social life.

Whether you’re going through a good or bad patch, being able to switch off and walk away off your own accord is the truest freedom. Freeing the mental cache through a balanced lifestyle is the key to success. You can never take enough breaks from this game. I guarantee, you’ll ALWAYS come back and trade better.

Speak soon.

AT

*Note: this weekend, premium subscribers will get to enjoy another trading tutorial. I’ll also be recording another interview with a trader which I’ll be looking to upload towards the end of the month!