Thursday, November 12, 2009

Managing Your Energy as a Trader

If you lived in a cold climate, you'd never think of leaving your windows open in winter. If your walls had cracks in them, you'd have them sealed; if insulation were missing, you'd have it installed. Why spend money heating your home if the heat is simply going to be dissipated into the cold outdoors? From an energy vantage point, it is inefficient--and expensive.

At a psychological level, energy is one of four components of emotional well-being. The other three are happiness (or joy); contentment (or satisfaction); and affection. (See this post for a more detailed description of well-being; the entire Chapter 3 of The Daily Trading Coach is devoted to well-being and strategies for enhancing well-being).

Without energy, it is difficult to sustain positive emotion. Because much of positive feeling is based upon what we do with our lives, we constrict our potential positive experience when low energy levels rob us of initiative.

Psychologically, we can be like the drafty house with cracks in the windows. We leak energy and lose efficiency. Negative thinking and catastrophizing? A huge energy leak. Lack of physical fitness? Poor diet? More energy out the window. Perfectionism, beating up on ourselves, pressuring ourselves: still more energy lost.

Take a moment to review the post on the laws of psychological energy. People are productive when they are immersed in activities--including ways of thinking and behaving--that *give* energy. When we spend significant time in activities that rob us of energy, we pay a price every bit as dear as that leaky house in winter.

Think about how you coach yourself: how you approach markets, how you reflect on your own trading? Do you energize yourself? Do you sap yourself of energy? Do your life activities outside of markets energize you for your work? Does trading truly energize you?

Or are you a battery that slowly loses its charge, trying to muster the energy to act and wondering why your efforts end unfinished, delayed by procrastination?

So many people live their lives going through the motions, doing the minimum necessary to get by. Their low energy activity doesn't stimulate energy, and so they remain stuck in a low energy state. Others are brimming with initiative: one trader recently told me of grueling days at work, but he was headed for the gym for a brisk workout. He hardly lacked well-being despite a pace that others would find fraught with burnout.

That trader understands one of those psychological laws: expending energy doing the right activities generates energy and sustains well-being.