Trading tips? Wall Street is notorious for long hours, stressful work environments, and constant interruption. But 99% of traders aren’t on Wall Street. Don’t think you have to be working 24/7 in order to be a trader. To have a long career, it’s far more important to protect your time and energy. To do so, you’ll need to avoid three closely related things: distractions, overtrading and burnout. These trading tips can help you get the right focus.
There are more distractions available to traders than ever before. This shouldn’t be news to anyone. News. Charts. Tweets. Reddit threads. Announcements. Mergers. IPOs. And that’s just the stuff that has to do with trading! Add in a typical mix of chores, kids, social media, emails and work, and you’ve got enough distractions to easily waste an entire day, especially since every distraction can waste up to 25 minutes. Eliminating distractions, both personal and professional, is the first step to trading smarter. While you can’t mute your wife and kids, you can silence a lot of digital noise, so start there:
Spending all day at your trading desk makes you want to spend all day trading. But the fact is, every trade is a chance to lose money, and avoiding losses is essential to survival. This study from 2000 sums up overtrading brilliantly: “Individual investors…pay a tremendous performance penalty for active trading. Overconfidence can explain high trading levels and the resulting poor performance of individual investors. Our central message is that trading is hazardous to your wealth.” Try these steps instead:
For more on how overtrading leads to lower returns, check out our blog: Why Overtrading F***s Over Traders.
Burnout looks different on everybody. It might be irritability, depression, foggy thinking, or even an inability to focus. And it doesn’t always have to be work related. If you’re always checking social media and news, you’re still stimulating the same parts of your brain that work-related stress does, which can fuel burnout. Here are some small ways to prevent burnout, decision fatigue and brain fog before they become a problem:
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