In a live trading event, the market was trading flat in a narrow range affecting everyone’s trading psychology. The traders in the room were getting antsy. They were bored and showed all of the characteristics of bored traders.
Knowing When Boredom Affects Trading
How can you tell when you are bored? These traders showed three common signs of increasing boredom
Becoming distracted from the market. Some started surfing the net; others chatted with one another.
Seeing things in the chart that weren’t there. Some traders looked at smaller time frames to “find a setup.”
Taking trades outside the trading plan.
What Really Happens When Bored
When we are bored, we lose interest in our immediate experience. Instead, we connect to the story going on in our head that there is little captivating us right now. Our mind tells us that our immediate experience is lacking novelty, interest and stimulation. The mind views this as unpleasant and begins telling us to escape. Our mind is saying, “Hey, I don’t like reality. Change it!”
The Real Problem with Boredom
Responding to our mind’s call for more stimulation is more often than not detrimental to our trading. When we distract ourselves by engaging in activities unrelated to trading, the market is likely to take off and we miss a good trade. Taking “boredom trades” (i.e., trades with no edge taken to generate stimulation) will chop up your account.
It is not the situation that is problematic; it is our response to it that causes problems. In fact, it is not even the response to the situation as much as it is our response to the mind’s demand for more novelty that causes trading problems. When you connect with thoughts like, “This is so boooooooring,” it becomes self-fulfilling. It does, indeed, become tedious. The natural response is to try to escape the tedium by answering email, taking unplanned trades, etc.
What to Do
Be mindful, even when the market is going sideways. Here are two important steps you can take:
- Continue to engage in the market action. Watch the market with interest as it paints price bars. Has it put in a lower low? Is it now putting in a lower high? Has the market tipped its hand? Is this now the time to sell it short?
- 2.Take a step back and decenter from your thoughts. Note the mental chatter. It will be a story: “This is dull and tedious / What a hassle / I’d rather be doing XYZ…” Note this chatter for what it is – a story unhelpful to your trading – and then remember what is most important to your trading. Is it surfing the net or paying attention to the market? Is it taking a boredom trade or patiently waiting for the market to tip its hand and offer a choice setup? Then, make the right choice. Being mindful requires practice to develop.
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