Should I trade today? If you manage to answer honestly to this question every day, and to trade only at days when you feel well, your return will be higher than you ever expected. Probably, most people will not ask this question, because anyway they trade without regarding the answer.
You may lie to yourself that you are able to trade in days when it is better to rest. During such days, you will often suffer considerable losses of your capital and the personal stimulus to trade. It will be better to realize why are you still insisting to trade in these days, after you do not achieve good results. Since you are not the only trader who acts in such periods of self-deception, it is essential to avoid this.
Bad day of trading
Let’s face this. Everyone has good and bad days. But traders are not like movie actors that can play with high temperature, twisted ankles and broken hearts. While an actor’s career depends on his good performance in front of the audience every day, the trader cannot rely only on the conducted rehearsals and his good memory to fulfill successfully these days that he does not feel in a suitable form.
Usually you have days when you did not get enough sleep, you forgot to take your medicines or you are just irritated by the permanent cold weather. Although all these conditions are relatively temporary, they will have a definite impact on your mental activity and the result of your decisions. The time needed for making a decision increases, the perception is dulled and the results are not from the first class.
Besides, there is a certain number of traders who have never been in their best form. These are traders, for example, who spend long hours after work in the night clubs, take drugs, follow unhealthy diets, get overloaded or spend most of their time on the couch. Considering their young age, they surely will not use their full potential, in order to achieve some good results.
If the moderate changes in your surrounding and your physical condition have a significant influence on your experience as a trader, imagine what impact would have some severe conditions. There are traders who make important decisions in the days when they have migraines, severe back pain, severe injuries or while still recovering from recent operations. Few are those who are able to ignore the pain, to concentrate and achieve good results. These traders are exception to the rule. Most of us will feel discomfort in such situation that drains our energy and ability to focus. It appears better to follow your trading strategy as you struggle to survive physically.
When everything goes wrong
Not all bad days are result of bad physical condition. Emotional and personal factors can also cause distress. Traders who experience an emotional crisis as a result of divorce, death in the family or loss of beloved person, should not participate in the market. A marital conflict is one of the most popular causes of bad trading day. A trader who has just decided to leave his wife and children may undergo loss for months. In addition, it is good to note that it is very difficult to dissuade such trader to stop acting on the market immediately.
Another common cause for bad trading days is the suffering of a significant loss. This leads to fear and lack of determination, which in its turn make the trader take too much risk, making constant mistakes in order to regain lost profit.
When everything looks good
Anyway, a significant profit on the market could be another reason for an investor not to trade during the next day, when he is too emotionally charged to make proper judgments. That’s right! If everything goes well and looks great, the trader may not be able to focus and concentrate. The reasons could be happiness of becoming parents, planning a family reunion, wedding, new love, or just having a new house built. These wonderful moments can, however, lead to a great stress.
Filter the reality
One day could become unsuitable for trading when the emotional and physical condition of the trader leads to neglecting of information that would normally be used in making better decisions for trade. So? Traders begin to ignore their own trading rules.
Neurologists, having studied the way the human brain perceives reality, found that brain perceptions of reality are extremely low. They are perceived according to the individual genetic predisposition, previous experience and general understanding. As a result, we see things in a predetermined and limited way.
However, these perceptions are our own and the only ones that we can understand and use. If they change, the information that we normally filter will become distorted by emotional and physical disruption and our behavior will not be the usual one, our rules are completely destroyed.
How to cope with this problem – expect the second part of this article.