This is particularly problematic in the case of not effectively managing one's energy level. There are several forms of positive experience that enhance productivity and creativity: happiness, life satisfaction, energy, and affection. When we deplete our energy, it is more difficult to sustain the activities that generate the other forms of positivity. For that reason, a low energy level most often manifests itself in low positive experience, creating a downward spiral--decreasing energy, decreasing positivity--that impacts mood and behavior, and ultimately productivity and sound decision-making.
How often do traders fail to follow their plans and act on their ideas simply because they are at low levels of willpower due to depleted energy?
Of course we can lose energy due to lack of sleep, overwork, lack of exercise, and poor eating. A more subtle but significant loss of energy occurs when we fail to tap into our core strengths and values during our daily activities. Activities that we experience as *meaningful* give us energy; activities that strike us as meaningless sap our strength. Digging a ditch for no purpose whatsoever would be physically and emotionally draining. If, however, we knew that digging the ditch in a certain amount of time would lead to a very large payday, we would find the motivation to get the work done on time.
Similarly, when we play to our strengths, we experience activities as affirming. The exercise of signature skills is intrinsically rewarding: we find enhancement in doing what we do best. When we get away from our strengths, effort becomes just that: labor with little psychological reward. I will get up at 4 in the morning to analyze a data set that helps me better understand the market; the intellectual curiosity is energizing. If I had to get up at that time to do household chores, I would find it difficult indeed to stay awake.
An important implication of this perspective is that your energy level in researching and trading markets is a reflection of the degree to which you are meaningfully engaged and challenged. If you try to process information in a way that is not your strength--forcing yourself to read, for example, when you process material much better by hearing and discussing it--the effort will be taxing rather than energizing. That, in turn, can lead to those willpower-based lapses in concentration and other seeming problems of "discipline". The issue is not discipline, per se; it's one of leveraging core skills, interests, and values.
A while ago, I wrote about the core components of a trading process. At a skill level, a trading process aligns us with best practices: what we do well in markets. At a purely psychological level, a trading process aligns us with our strengths and values. In that respect, process becomes our energy regulator: it allows us to renew our energy reserves by channeling our efforts toward ends that are meaningful and intrinsically rewarding. A good process does more than manage energy: it digs new wells and increases our reserves.
Further Reading: The Laws of Psychological Energy
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