Is boredom in trading a factor of losses?
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Who doesn’t get bored looking at price charts in a completely soft market? All traders are familiar with these long periods where the market has no short-term trend. This phenomenon is recurrent and generally occurs before an important economic announcement or in the absence of news.
For novice traders, these waiting phases are difficult to manage, they are often periods of loss. Beginners don't like waiting, staying out of the markets. They need to constantly be in a position otherwise they feel like they are wasting their time and suffering a loss of income. The problem is that in periods of very low volatility, trading signals are few or non-existent. As a result, some traders open positions using subjective criteria or criteria that have nothing to do with their strategy. This is the beginning of the infernal spiral, which inevitably leads to the loss of capital.
The best way to fight boredom is to follow your trading strategy at all costs. If it does not give you signals for several days, it is important that you are able to resist opening a position, to stay away. It is often said in trading that not taking a position is still taking a position. Not taking a position means recognizing that the odds are too low for a buy or sell position to be open. Contrary to what many novice traders believe, the market is not always easy to read even for an experienced trader. You have to know how to say, ‘I don't know’, or rather I don't have enough technical information (from my indicators, from my charts, etc.) to be able to make a decision.
Periods of low volatility are often frustrating for traders because they still have the desire to trade. Trading, when you get a taste for it, quickly becomes like a drug (see trading addiction). The only thing that protects us from irrationality at this time is our trading strategy. You should only take a position if it gives you a buy/sell signal or risk losing your capital. Remember that your money is your work tool. If you lose it, you can no longer work.
Boredom in trading is not necessarily a bad thing. It should even be an objective for novice traders for the simple reason that if you get bored, it is because you are no longer subject to emotions. As we know, emotions are one of the main factors of loss. Emotions drive the trader to make irrational decisions (increase leverage, open a position without any signal from his strategy, take low averages, etc.).
An experienced trader is a trader who follows his trading plan to the letter. He opens a position when his trading strategy gives him a signal, has rigorous risk management (see risk management rules) and knows when to close a position. He therefore no longer has any surprises in trading, experience has taught him to manage all types of situations. He is a kind of trading robot, automatic trading applied by a human being.
Boredom is therefore part of his daily life. Of course, there is still the satisfaction of earning money, but the activity of trading in itself is not exciting. On the other hand, it provides many advantages, including great freedom in work and the possibility of a high income.
To answer the initial question, I would therefore say that boredom is a major factor for losses with novice traders due to poor emotion management (compulsive desire to trade at any price, failure to respect the trading strategy, etc.). On the other hand, boredom itself is not a loss factor, it is even the basis for success with experienced traders. A trader's level of boredom in his activity is a good barometer to determine whether or not he has the upper hand over his emotions. Are you bored in your trading?
For novice traders, these waiting phases are difficult to manage, they are often periods of loss. Beginners don't like waiting, staying out of the markets. They need to constantly be in a position otherwise they feel like they are wasting their time and suffering a loss of income. The problem is that in periods of very low volatility, trading signals are few or non-existent. As a result, some traders open positions using subjective criteria or criteria that have nothing to do with their strategy. This is the beginning of the infernal spiral, which inevitably leads to the loss of capital.
How to fight boredom in trading?
The best way to fight boredom is to follow your trading strategy at all costs. If it does not give you signals for several days, it is important that you are able to resist opening a position, to stay away. It is often said in trading that not taking a position is still taking a position. Not taking a position means recognizing that the odds are too low for a buy or sell position to be open. Contrary to what many novice traders believe, the market is not always easy to read even for an experienced trader. You have to know how to say, ‘I don't know’, or rather I don't have enough technical information (from my indicators, from my charts, etc.) to be able to make a decision.
Periods of low volatility are often frustrating for traders because they still have the desire to trade. Trading, when you get a taste for it, quickly becomes like a drug (see trading addiction). The only thing that protects us from irrationality at this time is our trading strategy. You should only take a position if it gives you a buy/sell signal or risk losing your capital. Remember that your money is your work tool. If you lose it, you can no longer work.
Boredom: the pro trader's routine
Boredom in trading is not necessarily a bad thing. It should even be an objective for novice traders for the simple reason that if you get bored, it is because you are no longer subject to emotions. As we know, emotions are one of the main factors of loss. Emotions drive the trader to make irrational decisions (increase leverage, open a position without any signal from his strategy, take low averages, etc.).
An experienced trader is a trader who follows his trading plan to the letter. He opens a position when his trading strategy gives him a signal, has rigorous risk management (see risk management rules) and knows when to close a position. He therefore no longer has any surprises in trading, experience has taught him to manage all types of situations. He is a kind of trading robot, automatic trading applied by a human being.
Boredom is therefore part of his daily life. Of course, there is still the satisfaction of earning money, but the activity of trading in itself is not exciting. On the other hand, it provides many advantages, including great freedom in work and the possibility of a high income.
Is boredom a factor of losses in trading?
To answer the initial question, I would therefore say that boredom is a major factor for losses with novice traders due to poor emotion management (compulsive desire to trade at any price, failure to respect the trading strategy, etc.). On the other hand, boredom itself is not a loss factor, it is even the basis for success with experienced traders. A trader's level of boredom in his activity is a good barometer to determine whether or not he has the upper hand over his emotions. Are you bored in your trading?
