Step 006 – When not to trade


eye-743409_640Do you know when not to trade? Yes, there are times when you should not trade. Trading is above all else, a mental game. Your toughest opponent, your most terrifying enemy, the one bent on breaking you – is you!

I have certainly felt this many times. When I’m on top of my game, when I’m feeling good, when I’m calm, well rested, healthy, focused on the markets in front of me, that’s when I can trade well. When I’m sick, feeling worried, confused, or have other things outside the markets that compete for my attention, then I cannot trade well.

Now I’m sure we all have times where we’re on top of our game and other times where we probably shouldn’t attempt to accomplish even the simplest task. What characterizes the Master is that he is able to recognize his own state and objectively decide whether to trade or not.

Unfortunately, I have had a bad January. I’ve been down with a nasty flu for an entire week. I’ve had worries about the health of a family member. And I’ve had my son at home with the flu as well.

But here is the good news: I have not been trading during these times!  I was able to recognize that I would not be in peak condition, and simply refrain from trading. Instead I did a lot of research. I spent the time on analyzing my results from the past six months, analyzing my mistakes, refining the descriptions and definitions of what I do. And I spent a great deal of time thinking about and refining my daily routines and on working on myself!

So here is what I’ve found works for me when I’m feeling like I cannot trade well:

  • Personal development; quiet thinking and meditation – often the more focused thinking on specific problems is much too strenuous, but quieting the mind and focusing on resting mind and body always works wonders.
  • Healthy eating; Fruits, vegetables, small amounts of good meat, tons of water, and of course high quality supplements – especially when I’m sick or about to get sick.
  • Rest; nothing beats a nap now and then!
  • Reading; This month I’ve read Reminiscences of a Stock Operator again, plus scattered chapters of the Market Wizard books. The point is that it’s not too technical or difficult, yet I learn something every time I read it.

So although I have nothing to show for the month of January, I have come a long way. No, I’m not a Master yet, but I have improved on that one aspect of Mastery; to know when to trade and when not to trade.

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