STOP Trading to Win
Every great trading idea I’ve ever had has come to me in bath. Lest you think I’ve completely turned into a teenage girl -- don’t worry, no scented candles, or flower petals for me. I turn on the water to scolding hot and fill up my ugly but massive pre-World War II bathtub to the rim (the advantages of NY city apartment living) and lie there like a beached whale letting my mind go blank and quiet for ten minutes or so. Inevitably some random thought will pop up from nowhere and often it is the exact insight I’ve been looking for.
After all these years I am still amazed how 10-15 minutes of hydrotherapy can be more productive than days of staring at the screen. In our business where we are obsessed with every tick, every headline, every tweet that comes our way, it is easy to forget that data flow is not the key success. It is the process of turning that data into actionable information that separates the winners from the losers in FX.
Sometimes in order to make sense of the data you need to turn it all off. Marty Schwartz, the great S&P trader from the 1980’s and the author of Pitbull used to say that you cannot move from reverse to forward without first going into neutral. In our business, where the markets trade 24 hours a day five and a half days a week, it is often very difficult to step aside and do nothing, but sometimes it is the wisest thing to do.
In order to create new trading ideas you need to find new patterns and you’ll will never be able to do that when you are engaged with the market repeating the same trading behaviors over and over again. Sometimes the best thing to do is just STOP.
This is a lost easier said than done for a workaholic and market junkie like me, but even I am acquiring an appreciation for distance and perspective. Trading round the clock for 50 weeks straight will not make a you a better trader. Don’t get me wrong, I still think you need that kind of dedication just to achieve competency in the game, but once you do, you success does not come from working harder but from working smarter.
Trading is a never ending challenge for the mind, the body and the heart. And perhaps the best thing we can do is remind ourselves to make time to walk away. The markets will be there tomorrow.