Is there such a thing as too much focus when you are a trader and what is the price to be paid? Michael Marcus says in “Market Wizards” that his marriage failed due to his intense focus on trading. Bill Lipschutz says that an ‘insane focus’ like that is what marks out the exceptional traders.
Indeed, he stated to Alpesh Patel that the top traders are extremely hard working as well as being smart and astute. This is what sets them apart. Overall his assessment of a successful trader is: “Brilliance, intelligence and education and the desire to make money will lead to success.
However, to be a phenomenon, talent and industry are key. If you are looking for a secret to trading success, there it is”.
So what marks out the successful from the unsuccessful trader? According to Mr Lipschutz, the unsuccessful one does not have the “insane focus” that he deems essential for success.
The unsuccessful trader operates on the belief that the key to success is based on out smarting the other traders or the markets. They do not see the need for all the attention to details that the successful trader does in their planning and execution of trade’s, year in, year out.
As opposed to the successful trader who relishes the preparation, planning, strategy identification and market analysis and spend their time engrossed in the markets. Indeed Mr. Lipschutz notes, “the very best traders don’t take a lot of time off. They don’t want to.”
However, he has also questioned whether there is a price or a balance to such focus. “Do they need to recharge? Well, you know what, when I was younger I thought ‘no.’ A lot of things happen when you’re younger and newer to the game that you don’t really realize because you have this kind of energy and your experience bank is less full. You don’t understand that to recharge may help you do it even better.”
So age and experience count for more? Well when you are younger it is possible to go for days on minimal sleep and run on the adrenaline of trading and life. But is there a cost?
Everyone has their own level of sleep and rest that they require to operate at their maximum performance and that is essential that each trader is honest about what theirs is.
If a trader is unable to focus and think with clarity then the price could be high as they react too slowly to market changes or fail to spot new opportunities. It may not be directly obvious on one trade and therefore the effect can become more pervasive in the trader’s life as they continue to replicate what they believe is required to be the most successful trader and operate on too little sleep.
Eventually though it will catch up with them and their profits will reflect their lack of ability to focus when they are trading.
However, trading is not a 9-to-5 job, it does not follow a set routine in terms of daily or weekly outcomes but it does require discipline, planned, and executed strategies.
For the trader who can keep going day after day without a break do it, but the best traders are those who plan their own capabilities and capacity into their strategies and recognise if they are best trading at a reduced level of hours per day or days per week. It is all about cost effectiveness and a routine set to maximise their personal performance.
So whilst many of the successful traders have the “insane focus” described by Bill Lipschutz the most important element is the mindset and being in a position both physically and mentally to capitalize on those golden market opportunities when they present themselves.
Mindset and focus is key, rest is essential.
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