Knowing that your positions are so far out and having the piece of mind provided by correctly set up price alarms (sound, email, sms) is the recipe that allows me to detach myself from the markets and be productive in other areas of my life.
After being blessed with the opportunity of following financial markets since my arrival in Canada in 2009 I have realized, little by little, that looking at the markets every five minutes is mostly a waste of time and a huge hit to your productivity. It doesn't allow you to properly concentrate while you work, study, create or whatever it is that brings you pleasure. It's like when I was in Cuba, I used to walk by the kitchen an open the fridge over and over again, knowing there was nothing new (nothing at all in fact) but still opening it and taking a look. Sometimes I wasn't even hungry or anything. It had just become an unconditioned reflex while I had nothing interesting to do in my life. A little not harmful addiction.
- Decrease in your productivity at work/home/school, huge interference with whatever else you are trying to accomplish at that moment.
- Loss of quality of sleep. By the time you are addicted, looking at the markets from 9:30AM to 4:00PM is not enough. You take a last look at the markets before going to bed. Who in their right mind can possibly sleep like a baby after that? You leave your computer ON all the time with a futures page open. You wake up at 3AM in the morning to look at the damn screen. Having your sleep patterns affected can drastically affect not only your strength and mood the next day but your health as well.
- Over-trading temptation. You start seeing "Lucy in the sky with Diamonds", opportunities that don't exist; entries with a sub-optimal or non existent edge. You are tempted to spend way too much in commissions without realizing their impact.
- Frustration, for dedicating so much time to this and not making the expected money to justify all the effort. Double frustration if the scenario changes "from not making enough" to simply "losing money" even after so much wasted time.
- Influenced by Noise, Fears and the Financial media. What happens if you watch the charts every two minutes and the markets are not moving? Suddenly the addition leads to looking for financial news. Something to read. Something that justifies the lack of movement and the desire to know the next big thing that will move the markets. Once other people bias penetrates, your trading will suffer. Unless you are already really disciplined and confident in your trading plan.
There is this book How I Made $2,000,000 in the Stock Market (yeah I know it is a pretentious title, but it is a good read) that really resonated with me when I read it like 4 or 5 years ago. It's about this man (Nicolas Darvas) who was a dancer. He had read around 200 books on trading but could only find huge success once he started traveling the world as a dancer. This was back in the 50's. While being away from the States, the financial papers, the exuberance of markets information he accidentally started to have success. He could no longer follow the markets every day. News didn't spread worldwide as quickly as they do nowadays. It was a terrible world where iPhones didn't exist. He was only looking at prices irregularly and was not too aware of the minute after minute financial Armageddon taking place in the US. He was basically detached from the American financial universe. From time to time he would phone his broker from abroad (yeah, again this was in the 50's) with orders to execute based on predetermined price levels he had established earlier as decision triggers. It's a great story and a great lesson of why you don't have to obsess over the markets with the ensuing loss of quality of life that usually accompanies every addiction.
Active day traders exist. Most of them fail, as with anything in life, some of them survive. But it is a really, really stressful endeavor....
...And, if you are not a day trader, then why the hell do you need to look at the charts all day anyways?
Time is the most precious commodity that we have in this fleeting existence. It is also the only one that can not be bought. The one that can't be gained back.
When the dying individual thinks back and reflects upon what he would/should have done differently in life, the most common regret is not "I should have worked more". I assume the dying trader would not think "I should have spent more time looking at charts and reading MarketWatch". The biggest regret is: I should have spent more time with my loved ones. I should have spent more quality time with my friends. I should have lived life a little more.
The markets won't go anywhere. If you haven't found success as an obsessive/compulsive trader, step back. Unplug yourself from the noise created by the financial media orangutans. Stop over-trading and feeding your broker with easy commissions. Create your action plan in advance and have predefined price levels to make unequivocal decisions. Then set your alarms to be notified via sounds, email or notifications to your phone so that you can be detached from that stupid trading platform and have a life.
Looking at the charts every minute is like me uselessly opening my fridge at home in Cuba. Only way more dangerous.
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All traders go to heaven
The daily fluctuations of your easily influenced mood