You’ll find it said time and again in trading literature that the right psychology is the most important factor for trading success. However, there are really two aspects to trading psychology. One is overcoming cognitive biases, which is the most common one that people talk about, and the most difficult to do. This is best achieved through introspection and practice, because it involves catching your brain in the act of taking shortcuts when it should be thinking hard about things.
The other aspect of trading psychology is much easier to control and improve. This is the effect of environmental factors. Our environment, and even our physical body, subtly influences our thoughts and feelings. All the objects around us, the lighting, and the temperature can all have an effect. Luckily, we are usually in control of these things and can optimise them to help us perform at our best. Here are just a few things you could do right now to help your trading.
Trade from the same place every day
The concept of work-life balance implies that work and life are separate and shouldn’t be mixed. Well, the same applies if your work is your trading. Either be trading or doing other things, but never trade and do other things at the same time. This clear division will help you switch on and focus when the time comes to trade.
In fact, you should take it a step further by not trading in the places where you do other things, and vice versa. That will just send mixed signals and you end up with the worst of both worlds. Trade from bed, for example, and you’ll both trade and sleep worse. Have at least a desk or office chair that you use only for trading and nothing else, but a whole office is even better.
Get some ergonomic furniture
You likely already know that sitting for long stretches of time is bad for you. It restricts blood flow and leads to poor posture and pain, but as a trader sitting down and staring at screens for hours is just part of the job. Or is it?
Compared to sitting, a standing desk can result in better concentration, more focus, and improved memory, creativity, and mood. They’ve also been linked to greater problem-solving skills and lower stress. While nobody is saying that you have to be on your feet all day while you work, traders stand to benefit a lot from using an adjustable or standing desk for at least a few hours in the day.
Dress your best
This might seem silly at first if you work from home, but there is some truth in the old saying about dressing for the job you want rather than the one you have. The psychology here is similar to the example above about always trading from the same place. Avoid confusing your brain with signals saying it’s time to relax, like casual clothing.
Conclusion
Many studies have shown that factors in our external environment influence how we think and work, and many businesses take this very seriously. Traders would be wise to as well, especially as these actions take very little effort to implement.
