Series: Mental Roadblocks of Day Trading
Unlike most jobs, your full mental capacity is the difference between a good trading day and a bad one. Remember in your early 20’s when you could stumble into work exhausted and muddle through the day? I sure do. These days even if I am just a bit distracted, I run the risk of making decisions that cost me money. Let's go over a couple of tips to keep your mind engaged and your trading flawless.
1. Only trade when you feel complete clarity of thought. If you did not sleep well, are coming down with a cold or have a bad headache consider, taking yourself out of the market that day. Suppose the construction on the building next door is keeping you from concentrating, think twice about the decision you make. Your decisions are vital and if your judgment is clouded, your trading will suffer. These are also the days you are also more apt to get emotionally involved with the decisions you make. You must have the discipline to step away from the computer for your own good. You are better off not making any money than muddling through the day, making bad decisions and losing money!
2. Use your mental RESET button after every trade. Each trade is it’s own.When you exit a trade, either at a win or loss, you need to file that trade away.It should have not affect on your emotions or the next trade you make.Think of your trading day not as a continuous movie but a series of short films, completely unrelated to each other.If it helps, stand up and back up from your computer. It is important to create a “full stop” before you continue your trading day.Maybe stretch or get a cup of coffee, or - silly as it sounds -doing 10 jumping jacks will do the trick!
3. Keep your hands busy. If you are like most Americans, you pride yourself on your ability to multitask. Can you drive while on the phone, while drinking coffee while looking for a good radio station? Unfortunately, day traders spend hours staring at their computer screen each day and often one of two things happen. 1. You lose focus and miss an entry or exit or 2. You overtrade to pass the time. A way to avoid these scenarios is to create a kind of “white noise” for your hands during the day. A pair of Chinese Exercise Balls, also known as Baoding Balls will do the trick. Or improve hand strength with hand exercisers. You could always take up knitting if you really wanna get serious!