How Much Does Your Environment Impact on Your Trading Success?

Trading, as with many other professions, demands total concentration. Keeping your eye on the ball is paramount for success. But how easy is it to fully immerse yourself in the trading lifestyle while juggling a life away from the office?

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Don’t wait to be successful at some future point. Have a successful relationship with the present moment and be fully present in whatever you are doing. That is success.

Eckhart Tolle

Never short on words or advice, Tolle dedicates much of his writing extolling readers to live fully in the present moment. For him, staying present leads to success, creates space to think and prevents worrying about the future, or more specifically worrying about future problems you can do nothing about.

It’s good advice of course and for many traders is the key to their own personal and corporate successes. However, is this a trait you identify with?

I’m sure you’ll definitely find some. However, you’ll also realised that staying present is straightforward when things are going right. The deal you’re keeping an eye on is moving along as predicted, you’re in the zone and able to trust your instincts based on experience and your good sense.

On the other hand, staying present is less straightforward when you’ve had a row with your spouse that morning, have a sick kid at home and haven’t slept well for days. Maybe too, that lack of sleep is leading you towards poor decision making outside of trading too.

Does this resonate with you? It definitely does with me.

Because, that was somewhat similar for me when I first moved back to Asia in 2012. Jet lag, change of trading routines and, no to mention, time zones.

How do Traders Lose the Ability to Stay Present?

The real question is, how do we pivot it back?

In 2005, a study by Thomas Oberlechner and Ashok Nimgade two scientists from Harvard University and Webster University (Vienna), looked at work stress and performance among 326 financial traders.

In the replies they received from the questionnaires they sent out more than 30% reported ‘very high’ or ‘extremely high’ stress levels. What was the cause of their stress? The answer was two-fold: profit goals and long working hours. Two factors guaranteed to put the pressure on.

There are many who feel that stress can be a useful tool for motivation. That a little stress won’t cause too much harm and indeed can propel the individual forwards to work harder, longer and with more determination. But, as psychologist and author Hendrie Weisinger points out:

Failing to differentiate between stress and pressure can be devastating.

 In short, stress is trying to achieve too much with inadequate resources – internal or external. Pressure is not. Pressure is what it feels like to do a job like yours.

Stress leads to an inability to stay focussed, it drags you away from staying in Tolle’s present state and leads you into dark places in your mind. It is not a performance tool. You will not make good decisions in the long-term under mounting stress.

Stress and pressure safely defined, how do they feed into the title of this article? Well, let’s assume we appreciate how striving to achieve profit goals can impact a trader but what about working long hours and that eternal struggle to create the work-life balance?

Once Upon a Time

You no doubt thought you could juggle it all. A career, a great social life and, in time, a family or at the very least a meaningful relationship.

Not all professions are created equal and trading is unique in that the highs are very high, and the lows can be devastating. While most traders attempt some balance and take risks based on sound judgement and experience, we know that the days can be long. It’s just part of the territory.

If you do have a family at home you’ll know how hard it can be to make that switch between your day job and the person you’re needed to be when you walk through the door. One of the hardest parts of the job is switching off.

Turning off that internal voice that suggests you just check on that email or worry about how a world event is going to impact your day tomorrow.

Trading is not unique in that area and many find their day-to-day plays a big part in how they deal with children, a spouse or roommates when they walk through the door. We’ve seen the impact a tricky homelife can have on your ability to stay focussed at work but what can a hectic day at work mean when you get home. Perhaps you recognise the following:

  • Inability to stay focussed on a conversation or task: that story your roommate is telling you, it’s impossible to listen to
  • Feeling disconnected: are you a parent/trader/spouse/friend? You’re all of the above but right now you’re not sure how to engage with any of those roles
  • Short tempered: you just need a few minutes to decompress from the pressures of the day before being bombarded with questions and requests
  • Feeling walled in: you could do with some space and time to yourself. You feel like you’ve lost the ability to create your own scheduling
  • Missing out: first steps, first words? You missed them, again. That relationship with your partner also feels like it’s missing meaningful connection

Avoiding Temptation: the big temptation might be to walk away from it. To avoid going home, stay at work longer and longer and in many ways force a resolution. As tempting as it is, it’s not a solution that’s going to stick. As well as having a negative impact on those outside of work, using your job as a means of escape can have repercussions on your performance as well.

Making work the sole purpose of your life does not give you enough of a back-up plan should it all go wrong and you lose your job. You need more.

Two of the Most Effective Stress Management Techniques

If you’re looking for a silver bullet to help you manage your work-life balance better you won’t find it here. According to Amy Morin, clinical social worker and psychotherapist, the two most effective habits you need to instil in your life are: more sleep and exercise.

Yes, that’s it. And here’s why: both these things lead to better self-regulation.

It’s not a leap to see why better self-regulation is going to help both at home and at work. This skill helps you take a step back from your reactions and emotions and helps you to, instead, weigh up what the impact will be of the decisions you make.

Feel that sense of anger rising when you’re partner makes a request of you the moment you walk through the door? Take a deep breath, regulate yourself and explain that you need a moment, rather than snapping back.

Tempted to take a risk that, based on your experience, you know rarely works out but under pressure? Stay in the moment, feel the emotions and use them to make a better decision.

In previous articles we’ve talked about the benefits of mindfulness as a technique to level up your trading skills. Self-regulation also falls into that category, feeding into Tolle’s call to stay present and in the moment.

And yes, we mentioned two effective techniques, sleep and exercise being one. Here’s the other: create a positive cycle. This is simply incorporating these two elements into a daily habit.  A good night’s sleep will help you feel great, a week of good sleep is a habit that changes your life.

The Takeaway

You are more than the sum of your parts. To function effectively as a trader you need more than your enthusiasm, more than your experience and more than the ability to focus. What happens at home (or wherever you spend outside work/trading) is crucial.

Traders often talk about having the trading edge, while that is important, many simply look into investing in better tech or exploring new processes. The smart money lies in investing in yourself. Carving out time to concentrate on improving your sleep and incorporating exercise on the daily.

This is also part of the strategy to play the long game (read related article).

Better at work and better at home. An endless circle that feeds into both environments and creates a positive framework on to which you can build structures supporting your mental and physical health. It’s the Ying and the Yang – a balance of body, mind and spirit.

The work-life balance is not the act of dividing up the two into neat compartments. It’s understanding how they feed into each other and figuring out how to get the best from both.

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