Tuesday, August 2, 2011

The Kirk Report

The Kirk Report

How To Maintain An Optimal State

Posted: 02 Aug 2011 03:16 AM PDT

An Optimal State

No matter what the market conditions may be, especially in weeks like this, it is very good idea to do everything you can to stick to the normal trading routine. While none of us can control what the markets do, we can control what we do everyday to be in the right place at the right time and to take advantage of opportunities we see by creating and maintaining an optimal state.

How do you create and maintain an optimal state? One way, at least if you are like me, is to develop a daily routine and stick to it no matter what. This will also help relieve some of the stress and tension markets like this create for all of us. What you do today, in essence, should be exactly the same thing as you did last week, the week before, and the week before that. The market’s performance shouldn’t disrupt or change your daily approach, how you spend your time, or even what you focus on. Doing this will help you sustain calm under pressure which is important.

For those of you who don’t work by the routine and are feeling stressed, I do have some suggestions for you to consider. First, I would recommend you increase the time and effort of your workouts. This will also help you get to sleep faster and burn out excess energy, frustration and emotion. Nothing will impact your judgment or increase your vulnerability to emotional market swings than being stressed out or overworked. I also recommend you try to go to sleep one hour earlier especially when feeling stressed. Also, if you can take an entire day away from the trading desk during the weekend, I recommend you do so to clear and rest your mind.

Second, I recommend you do not watch television and make a concentrated effort to read less news and opinionated social media. While this is helpful to many traders and investors as a general course of action, this is especially true in a noisy, news-driven market. While most seem to think being in the know will translate into making more profits, usually the exact opposite occurs as information overflow turns into paralysis by over analysis. In all likelihood, you already know everything you need to know to make money in the weeks ahead and more information and opinions are not going to build the bridge between here and those profits.

Another area I would recommend is for you to work on improving your eating habits. While often helpful generally, especially during stressful situations try to eat far less food while increasing the frequency of your meals to maintain and sustain optimal energy levels throughout the day. Also, try to eat more energy-focused foods and be mindful of your intake of both caffeine and energy drinks. If possible, avoid those altogether or at least moderate your intake as both will keep you hyped up and more emotional than necessary. Everyone is different here, but in general when stress increases, poor eating habits also increase and that will work against you and maintaining an optimal state.

Finally, please take significant steps to build a wall between your work and personal life so you can get the break you deserve. The best way to do this is to set work hours and stick to those even when market conditions are challenging and emotions run high. While many traders constantly check what the futures are doing right before bed, checking emails, and researching potential trades at all hours, you and your brain need several hours of solid rest and time away every single day to perform at your very best when you are at work. In fact, after 6PM and my after-hours preparation is finished, as part of my daily routine I turn off my cell phone and I never check emails or do anything related to the market. For me, that has made a world of difference.

Good and efficient routines take weeks, if not years, to develop into automatic routines but in my experience are well worth it. By taking small but consistent steps now to improving your work routine, will work wonders for you in the long-run.