Wednesday, October 29, 2008

strategic breaks

I have realized the need and the benefits of taking breaks from trading, or just monitoring the mkt in general. The rapid price movements, constant ups and down movements of the positions, activates certain parts of the brain (http://traderfeed.blogspot.com/2008/10/when-good-trading-leads-to-bad-trading.html). This interference with the brain leads to making bad decisions. In order to not strain those parts of the brain and allow myself to trade rationally, I need to take breaks from trading and the stock market.

It does not matter how good the opportunities may be (or may seem like) it is essential for my proper performance to take breaks from trading. I do find myself getting sucked into cycles. in order to stop that and break away from cycles, taking time out at regular intervals is a good tool.

Taking breaks will also install the discipline in me to not trade just for keeping my self busy or just enjoying the action. I will only trade when I see a good opportunity, based on my beliefs and observations.

At certain intervals, stocks does not move in any direction, it just stalls like everything else in life those are the times when traders are tested and those who are able to take breaks can avoid losses.


When I take a break and come back I feel like I have moved to another level like a student moving to a higher grade in school.