Ask any trader and they’ll tell you nothing kills P&L like bad habits. They creep on you, slowly, nicking a few quid here and there. It’s only when you work out what you’re costing yourself do you realise how much you’ve been giving back.
Bad habits not only cost us £, but they reduce our effectiveness and therefore our edge. They can be detrimental to peak performance. Getting control of yourself is crucial because it will 1) help you to achieve your goals much faster, 2) stop you from causing yourself psychical and psychological losses.
Nothing sabotages your productivity quite like bad habits. They are insidious, creeping up on you slowly until you don’t even notice the damage they’re causing.
Everyone has bad habits, but if we’re aware of them, you can do something about them. Below I discuss several of the most common, profit sucking afflictions, which can affect even the most successful traders. If you notice yourself in any of them, the onus is on you to fix them.
Lack of focus
Positive psychology says that to achieve what is known as a ‘flow state’ – the mental mindset to be fully engaged with the task in hand, it takes around fifteen minutes to get in the zone.
Once people reach this state they are way more productive than they otherwise would be; however, a lack of focus or distractions is going to hinder that. Mindlessly scrolling Instagram to see what TV your friends are watching or what beer they’re drinking isn’t going to help you with your goals.
Most people these days are unable to sit down and have a conversation one on one with someone without their phone being involved. They lack focus. Likes, comments, notifications, all serve to feed that dopamine hit. Email is no different. Why not check it twice a day instead of fifteen times? Turn off notifications unless they’re important such as price and volume alerts, and instead sit down and get to work. You’ll be surprised at what you can achieve.
While aspiring to be better is a great intention, perfectionism is not. Nobody is ever going to be perfect, and no trade is going to be perfect either. You can wait around for the perfect trade if you want but you’re never going to make any money.
I’m not saying take rubbish trades, but what I am saying is that perfect setups are rare. The UK market is not very efficient, and it’s not always liquid. Waiting for the right amount of volume and the right candles before entering is not going to deliver frequent enough setups that are needed to generate consistent cash in your trading system.
The only way is to get in there and get hurt. Get a feedback loop set up. Look at what worked, and what didn’t, then refine it and test again.
I tell people on my seminar that the only way is 1) idea, 2) execute, 3) refine, 4) repeat. By getting as much feedback on your trades as possible will tell you what is working and what isn’t. Once you know then simply stop doing what isn’t and do more of what does.
In trading, you only really need to focus on three things:
- More ideas
- How to make more money
- How to lose less money
If you can build on only one of these three factors, then you will improve.
Lack of routine
Most readers can likely identify with this. Routines build habits, and habits, once built, use less mental energy. That means more mental energy can be spent on what does matter, such as price sensitive RNSs and surprises. Consistency is key, and the more that can be automated, the better you will be.
Instead of getting up at 07:15 and hitting the snooze button – try getting up at 06:40, get the coffee on, and be ready to start work at 7am. Everyone only has one hour to find their trades before the market opens, so why would you willingly put yourself at a disadvantage?
What if your main holding is opening 30% down due to a profit warning, and you’re only finding out ten minutes before the market opens when you’re half asleep? What are you going to do? If only you had a routine, and checklists.
Too much blue light before bed
Everyone is guilty of this at some point (myself included) of checking their phone whilst in bed. A Harvard study found conclusively that blue light suppresses the sleep hormone melatonin, and using screens before sleep time is a key source of this blue light.
If you really must use a computer or a phone before sleep, then I would suggest to download f.lux. This reduces blue light from your screen and adapts to the light outside, making your screens darker automatically in the morning and evening, and brighter during the day.
You can learn more investing insight from Michael by reading his fantastic free e-book How to Make Six Figures in Stocks. This can be downloaded from his website – https://www.shiftingshares.com/
Follow Michael on Twitter – @shiftingshares