|If you are like me, you get to see a good number of charts everyday, sometimes hundreds. In addition, you may be actively day trading the ES Emini contract, perhaps in dual times frames, or a host of other configurations. Why do I go through this routine everyday? Day trading is my passion, and I suspect if you are reading this short article, trading is a passion for you, too.
But having a trading passion does have a downside. Too many charts. A couple of poorly thought out trades. More charts...you can suffer from day trading burnout. It has happened to me on a regular basis, at least once a year. I feel like I am just worn thin as a result of looking at charts and trading indicators and sitting in front of a computer for hours.
And I don’t think there is anything terribly unusual about becoming burnt-out, even with a activity you love. As a matter of fact, it is to be expected. I find my decision making process is greatly impaired when I am not excited about trading, and the results are usually indicative of that fact.
So what do you do? That’s easy to talk about, but tough to implement:
1. Stop trading for a few days. This is one of the toughest things to do. For many, trading is the way they make a living, so stopping trading stops the income. However, if your trading effectiveness is suffering as a result of burnout, stopping day trading is the smartest course of action. Read some books, exercise, or spend some leisure time in the manner you enjoy most. The important point is simple, stop trading until your state of mind is correct.
2. No matter how hard we try, day traders often get into bad habits that can result in unacceptable losses. This is where the trading journal (with the days charts saved) can be very crucial. Look at your trades with an open mind, as if they were someone else’s trades. Do the entries and exits make sense? Even more important, are the entries and exits compatible with the parameters of your trading system? Be honest and thoroughly examine your trading results.
3. Take a close look at the market from an objective viewpoint. Has something changed? Often times you will become accustomed to day trading in a trending market and the markets demeanor will change from the trend. Since you may have your mind set fixed from months of trading a certain market, the change in market fundamentals may be sabotaging your trades. Is the market still trending? Take a look at the market from different time frames for a realistic point of view. Look at daily, weekly, monthly charts and see what information you may be able to glean. Has the VIX changed drastically? These are all questions you need to answer before you resume trading. The market can change personalities quickly yet subtlety, if you have been counting on a trending marketing and possibly entering trades of higher risk because you assume a certain trend, you need to reconsider your strategy. Get back to the parameters of your personal trading system.
4. If you burnout is debilitating, take a week vacation and go somewhere and don’t even think about trading. I love to fish, and there is nothing more relaxing than a nice trip to a remote part of the country and test my skills against salmon, or trout, or bass...you get the idea. Don’t give trading a thought. Many times on trips of this nature I lose track of the day and date; that is when I know that I have reached a nice relaxed state, especially if I haven’t given trading any thought. When I am fixated on fishing or hunting, not trading, I know my mind has cleared some of the muddle I have accumulating over many months of trading. Or take a great family vacation, or take your wife or significant other to an exotic beach resort...all these things are wonderful ways to break the monotony of day trading for months on end. Clear your pipes out.
5. I think this is the most important step, call your mentor and ask for his advice. Perhaps he will want to review your trades. If you trade the same contract, he will be familiar with the trades he took that day and the market action of the day. He may be able to shed some light on what he thinks you may do to improve. If you decide on a break in trading, call your mentor before you start trading again.
Ultimately, trading is about confidence, and when you are burnt out you have generally lost your confidence. It is very difficult to trade when you are indecisive. This is not a business that lends itself to indecisiveness. You can get your confidence back, and that is an important point to remember. The secret is realizing when things are not going well and taking time to analyze the cause of your burnout.
I am a long time retail and institutional trader who now only trades part time, usually in the morning. I enjoy writing informational articles about my style of trading so others may benefit.
I endorse a state of the art trading program for beginners at http://www.emini-mavensite.com/tradingconceptsmlm.html -Trading Concepts, Inc. It's an awesome product that will have you well on your way to success. Plus, it has a money back guarantee...you have nothing to lose and thousands to gain.
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