I had originally planned to write about distractions and their impact on trading, but as I began writing, I realized that focusing on what we want instead of what we don’t want is more productive. Therefore, I want to shift the focus of this article to the importance of focus itself.
When I first set up my trading office, I hung a simple sheet of paper on the wall with one word: FOCUS. I knew that to succeed in the trading world, I would need to master the art of focus. I was up against brilliant minds with extensive education and experience, not to mention algorithmic bots and big money players. To succeed, I had to simplify and focus on my own game and my own trades.
With so many distractions and noise in the trading world, it can be difficult to filter out the garbage and stay focused on reality. Social media can be particularly insidious, with posts about other traders’ successes, snake oil salesmen, and more. I knew from the beginning that staying focused would be a priority and a challenge, and I worked hard to stay away from chat rooms, social media, and other distractions.
However, during the pandemic, when my four-year-old daughter was often at home with me instead of in preschool, I faced new challenges to my focus. There were times when I had to execute trades with my daughter hanging off my legs, and quiet concentration was hard to come by. Despite these challenges, I knew that maintaining focus was key to my success as a trader.
I had some moments in my first two years where I may have faltered a bit. However, as a “lone wolf” type, ignoring social media, chat rooms, and CNBC’s “Fast Money” was relatively easy for me. What became more difficult was focusing during the pandemic. With a 4-year-old daughter not in preschool often, executing trades with her hanging off my legs made concentration and quiet time fleeting and precious.
To survive these loud times, I developed a few tricks. First, less news and phone time. No doom scrolling. Stay off FOX news, CNN, etc. They distract your mind and instantly put you in a negative mindset. Play off how the markets are moving, don’t watch the news and try to predict how the markets will react. You’ll always be behind if you do that. Most of these news tidbits are already priced in.
Using noise-canceling headphones was also really helpful. It got me in the zone quickly and easily. I also used my favorite app, Calm, to listen to light work music or usually nature sounds. If I was day trading and chasing quick moves, headphones were such a huge help.
Overall, I used the pandemic to shift a little more into swing trading. Changing my style to something more conducive to having a kid running around helped. Swing trading had been on my to-do list for a long time, so it was the perfect time to implement it. I found it less stressful, and it was nice to get my money to work for me instead of scalping and chasing quick moves with day trading. I simply came up with a plan or a theory about a stock’s move, executed it as best I could, and stuck with the trade until I was proven wrong.
When the outside world tries to muscle its way into your focus bubble, take note. If there is a seismic shift in your life, respect it. Do not try to fight it and trade on as if nothing happened. A death in the family, a big change in schedule, or financial disruptions are significant warning signs. It’s okay to pump the brakes on trading, even not to trade. A big change in life needs to be respected, and it serves as a yellow flag. Many times, the start of a losing streak began with something significant that took a while to reverberate out to my trading.
When life throws curveballs, and focus becomes difficult, be ultra-aware. Yellow warning flags are abundant. Be very defensive, be extra selective about what trades you take. You must be okay with sitting on the sidelines more often, saying no to FOMO. Do not let the market have the advantage over you. If you dive into trades emotionally compromised, the market has won. Catching yourself unable to focus for any length of time is a telltale sign that something is off, and you need to pump the brakes.
Bill Gates and Warren Buffet agree that focus is their #1 trait that led them to success. Focus on the task at hand, the process, not the profits. Focus on the current trade, not yesterday’s, and don’t guess about tomorrow’s potential trades. Tuning into yourself, your true nature, and being aware of yourself is key. Building up awareness of my thoughts/feelings helped me focus better in general. Working hard to incorporate meditation, yoga, daily exercise, and a healthy diet into my life helped too. It all goes hand in hand. Building consistency with integrity will allow us to become consistent traders. When you find your focus and concentration waning, be on top of those warning signs and defend yourself…from yourself.
