5 things that will help your trading (that have nothing to do with trading)
And activating referral rewards!
Before I start, I’d like to announce the start of referral awards. Thanks to some of my loyal readers and friends sharing my blog with their network, Fidenza Macro would not have grown like it did. I enjoy trading and writing, but I don’t spend a lot of time marketing. I need your help in making my readership grow, so I’m offering an incentive to share my posts.
Going forward, there will be three referral reward tiers:
Tier 1 - 3 referrals, awarded with a 1-month complimentary subscription (worth $30)
Tier 2 - 10 referrals, awarded with a 3-month complimentary subscription (worth $90)
Tier 3 - 25 referrals, awarded with 1 month of a complimentary Founders tier subscription (worth $500), which includes 1 video call, unlimited access via chat, and an additional 3-month complimentary subscription
Referrals can be made by using the “Share” button below, or the “Refer a friend” button.
There will also be a leaderboard where you can see the number of referrals you’ve earned.
Alright, on to the post!
Find your own definition of success
Traders are often surrounded by other traders, and it’s easy to get caught up in comparing your performance against others. While competition can often inspire us to elevate our game, it can become an occupational hazard when external forces push us to trade more recklessly than we normally would. One example is when you see another trader make huge gains from a trade, you decide to jump on it, right before the market turns. Another example is if you feel like your performance is lagging your peers, so you decide to override your risk management process by increasing the size of your positions. The emotional pull of beating your peers is a dangerous trap, and the sooner you can resist it, the better. Determine your own measure of success and compete with yourself and nobody else.
Walking your own path to success applies not just to trading, but to life in general. Just because senior bankers and hedge fund founders are making huge wads of money and being talked about in the financial press doesn’t mean that’s what everyone should try to aim for. In many cases, greater success incurs a higher cost on one’s personal life. Costs can come in the form of time spent away from family and loved ones, lack of privacy or threats to safety due to having a public persona, or the burden of the time and attention it takes to manage and account for all your wealth.
Sleep well
As a trader, it’s hard to digest the huge volume of data and analysis that we read, watch, and listen to everyday. The quality and quantity of research that you consume almost doesn’t matter if you don’t have the capacity to retain and process it all. This is where the role of sleep comes into play. Memories and information consumed during the day are consolidated during REM sleep, a process that strengthens and reorganizes neural connections. This subconscious processing can often enhance problem solving and produce “eureka” moments upon waking.
Every month I find new evidence that reinforces the importance of sleep in our lives. It’s the key to our physical health, mental health, and overall longevity. Sleep enhances our emotional resilience, allowing us to better manage the ups and downs of life as a trader. The prefrontal cortex, responsible for executive functions and rational thinking, and the amygdala, which deals with emotional processing, notably fear and stress reactions, interact in intricate ways during sleep. Adequate sleep improves the link between these two brain regions. When we are well-rested, the prefrontal cortex maintains a healthy control over the amygdala, ensuring our emotional responses are proportionate and rational. Conversely, sleep deprivation weakens the connectivity between these regions, leading the amygdala to overreact, which can result in heightened emotional responses to everyday situations.
Learn how to breathe properly
I didn’t learn to breathe properly until my late thirties. I wish I could go back in time and give my 12-year-old self a manual on how to breathe properly, because the benefits would have improved every aspect of my life and compounded over the years. I would have been a better athlete, a better sleeper, and therefore a better student and later, a better trader. As I’ve written before, staying emotionally centered is the key to trading performance, and proper breathing plays an integral part.
Trading is stressful, and decisions made under emotional stress tend to be worse than decisions made under calm conditions. Proper breathing can help with that. Slow and deep breathing, where air is inhaled through the nose rather than the mouth, is known to reduce anxiety and stress and deactivate the sympathetic nervous system (otherwise known as fight-or-flight mode), which is responsible for Type 1 thinking. Deep breathing helps our mind better engage in Type 2 thinking, the kind of mindset that is best for making logical and analytical decisions.
Traders also consume and process a huge amount of information, and proper breathing can help with the cognitive load. Nose breathing (vs mouth breathing) improves oxygen intake during sleep and reduces incidents of sleep apnea and snoring. Better sleep leads to more REM sleep, which is important for the mind to process and make sense of all the information it has ingested over the course of the day. Deep breathing techniques can improve oxygen intake during intense athletic activity, as well as decrease heart rate in between sets to quicken recovery.
Get a life
My former boss told me one of the reasons he hired me was because I was passionate about other interests outside of trading. I’ve been a musician all my life and at that time I had been producing music as a hobby. The reason he said this was because he’s seen traders who care about nothing in life other than trading, and when they go through rough patches, it can be emotionally devastating for them. When your entire ego and identity rests upon your success as a trader, you risk going through an emotional tailspin when things aren’t going your way.
Boredom is also a trader’s worst enemy, so it’s good to have healthy outlets to distract yourself and put yourself in a flow state. When I’m waiting for my current positions to play out, or if I know that current market conditions are not great for trading, I force myself to stop looking at the market and do other stuff that takes my mind away from trading.
Get plenty of exercise
Exercise - whether it’s playing sports, going for a run, or visiting the gym, has benefits that extend beyond just physical health. It also increases blood flow to the brain and stimulates neuroplasticity - the brain’s ability to form and reorganize synaptic connections, especially in areas related to memory and learning. Exercise plays a part in long-term brain health and longevity, enhancing cognitive processing speed, memory recall, and executive functions.
Physical activity also prompts the body to release endorphins (the body’s feel-good hormones), which can counteract symptoms of stress and anxiety. Whenever the markets put me in an emotional rut, exercise is one of the keys to snap me out of it and return to my emotional center.