A few years ago, I met a wise millionaire trader at a trader’s expo in Europe.
We had a nice conversation about the challenges that one typically faces in this field, and he told me something that stuck with me to this day: Anyone who can trade while doing something else (texting or surfing the internet, for example) is simply not giving the craft the focus it deserves.
Profound advice, if you ask me.
Of course, it’s not always true, … but it’s mostly true.
We have a limited pool of attention and any attention that you use for activities other than trading, while trading, is taking away from trading.
That’s because there is a strong relationship between deliberate focus and results, and many studies confirm this. [A single point focus is the capacity to direct your attention towards a single point of interest at the exclusion of everything else for the duration of the effort.]
But, of course, like most questions about human behavior, there’s more to it. Whether or not you should let yourself be distracted by things other than trading, while trading, depends on how much attention it takes to trade in the first place, how much attention it takes to do those other things you want to do, and how much attention you have to go around.
If the attention needed to trade plus the attention needed to do something else is less than the pool of attention you have to spend, then why not do something else, right?
An unambiguous answer…
I’m sure you’ve heard of the parallels often drawn between trading and driving: as you get better at trading, it becomes like driving. You won’t even have to think about it, it becomes as easy as breathing.
Now, knowing this, would you say that a distracted driver can drive safely?
Here’s what the American Journal of Public Health has to say about this:
“after declining from 1999 to 2005, fatalities from distracted driving increases 28% after 2005, rising from 4,572 fatalities to 5,870 in 2008….“
You might be saying:
“That cannot apply to me… I’m sure I can trade (or drive) while doing other things… I’ve done it countless times and it’s never been a problem.”
But, are you really on a special place on the bell curve of focused attention and results, so that distractions might be bad for others and not for you?
Well, let’s look into that…
Did you know that 80% of people in the U.S consider themselves “above average” drivers? Polls show that a disproportionate number of people believe this. Yet, studies consistently point in the opposite direction — most people are not as “above average” as they think they are.
What this shows is that overconfidence in your skills to do something often clouds your judgment and you may not be fully rational when it comes to the evaluation of your own skills.
There are so many inscrutable objects of distraction that may throw off your mojo at any given moment, and that’s why single point focus is so important as it minimizes this possibility.
For instance, an article in the journal Environment and Behavior shows that even the presence of a smartphone on a table reduces the quality of a conversation taking place.
So, even if something as important as a job interview or a date is squashed by the simple presence of a cell phone on the table, do you really think you are immune to the trading errors caused by distractions?
When you put such facts together, you get a situation where you can’t really trust your own evaluation of your trading skills. And the truth is that you also can’t trust your opinion that distractions aren’t causing you to make trading errors.
The brain’s inability to be rational about its own abilities and challenges means that even when you don’t feel like you’re risking it, you might be risking it…
So, play it safe. When you trade, make sure you’re NOT getting distracted!
1. Turn off distractions
One of the insidious things about this distraction habit that we have is that we often don’t even realize it’s happening. It sneaks up on us. So to minimize this, when trading, do your best to put aside cell phones, close internet browsers, turn off your t.v, and put away any other potential objects of distraction.
2. Learn to become a mindful trader
Learn to calm down your mind and to do one thing at a time. If you want to become a great trader who is an expert sharpshooter, you have to drop this habit of splitting your attention into several halves. When trading, just trade. Have your mind and body present with what you’re doing. You will see the difference, trust me.
3. Set a time for trading
The popular idea that good traders should stay in front of their screens from the opening session to the close is a myth. And it’s one that’s damaging to your end results. Your ability to stay focused on one single object of attention is limited. That’s why you have to cap the amount of time you spend trading. The more focus you can maintain during that period, the better your trading performance overall.
The good news
I tackle these 3 points (and others) in great detail in my two courses, The Trading Psychology Mastery Course and The Trading For A Living Course.
Both courses are complete programs for change where I show you my proven and tested method for achieving success in the markets.