The Best Diet is Also the Best Trading Plan
It never ceases to amaze me how dieting and investing are the two great social problems of the modern age. Basically it all boils down to this. In the advanced industrialized world we are all fat and none of us save enough money for our golden years.
Just 50 years ago this was not really a problem. Most of us did not work in sedentary jobs with our butts glued to chair for 12-14 hours per day and we did not consume highly refined sugary foods that deposited 2000 unnecessary calories in our stomachs every day. Cinnabon did not exist.
As to retirement, well smoking and cancer pretty much took care of it. Most of us died within a year or two of retirement so depleting savings wasn’t really an issue.
Now we live forever, speeding around in ridiculous motorized wheelchairs too fat and too weak to walk even a few steps as we worry just how long our money will last. What all of us in OECD world desperately want is to be less fat and more rich, so that we can enjoy our longer lifespan in good health and ample wealth.
Of course the reason that both dieting and investing have failure rates of more than 90% is because they both require Herculean efforts of willpower. They go against all of our human impulses hardwired into our psyches by thousands of years of evolution.
Even when we succeed in either endeavor over the short term we inevitably fail over the long term as our greed for both food and profits derail us from achieving our goals in a sustainable basis.
So are we destined to fail forever at dieting and trading? Not necessarily so. One of the most interesting pieces of recent nutrition research holds insights into how we can succeed on both fronts without radical changes in our behaviour.
What if I told you that you could lose weight without changing anything in your diet? You could eat the greasy tacos, drink the syrupy sweet Southern Iced tea and still have a chance to drop 5% of your body weight.
It’s called an 8 hour diet and it focuses not on what you eat, but on when you eat it. Basically scientists have discovered that reducing the time window for consuming food to just 8 hours a day ( ideally from 9AM in the morning to 5PM at night ) will have greater positive impact on your dieting than all the broccoli you can eat.
The research carried out at the Salk Institute in California showed that mice fed a high-fat diet within an eight hour time frame – for example between 9am and 5pm – were both healthier and slimmer than those given the same number of calories throughout the whole day. Even when obese mice had their eating window reduced to nine hours, they were able to drop 5 per cent of their body weight within a few days – while still enjoying the same amount of calories.
What I find fascinating about the 8 hour diet is how the same advice can be applied to the markets with similarly impressive results.
If nothing else my chat room is an ongoing experiment into the art of day trading and one of our greatest discoveries was that the time you trade is much more important than the strategy you use. In my chat room I have many traders using very different approaches to seek profit. Some use indicator driven strategies. Others use modified versions my fading algorithms that employ several entry and exit points on each trade cycle. And finally other like me have reduced their day trading methods the sparest simplest, single entry/single exit approach. Yet what all of us have in common is that none of us trade round the clock. We all trade very specific hours and then sit still for the rest of the day. That one minor change has had a bigger impact on both the accuracy and the profitability of our ideas than any strategy that we ever designed.
In our world of infinite possibilities, endless resources and round the clock satisfaction of our desires, the ultimate irony is that success depends on knowing when to say no. Less time eating and less time trading can help us become healthier and wealthier without much sacrifice.