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Sharp as a Tack
By Bruce Mushial

     What do flying an airplane, racing a motorcycle and trading stocks have in common: you'd better be sharp or you're going to get yourself in serious trouble. Granted it's hard to get physically killed if you make a big mistake trading stocks, but you can kill your net worth, your dreams, and your retirement. To trade you need to be sharp. It doesn't matter whether you are on the floor of one of the exchanges or sitting in front of a computer in your home office, you need to frequently take inventory of how you are doing physically, psychologically, and emotionally. A stock trader who isn't at the top of his game physically is going to take some hits right in the wallet. If you wake up and feel like you need a couple more hours of sleep, you should be seeing a flashing caution light come on. A trader who might sit in a chair for hours at a time has a strange parallel to an athlete. You need to be at your best when the opening bell rings just like an athlete when the starting buzzer or whistle sounds. An athlete makes sure he gets enough sleep, eats right, and gets the proper amount of physical exercise so he can perform at his best when the competition begins, and trading IS competition. A trader needs to eat foods that allow his mind to work not foods that leave him sluggish and almost comatose. Small snacks during the day work better than a large breakfast or lunch that makes you want to curl up and take a nap. A regular regiment of exercise will release endorphins that can cause you to think more clearly for days. A trader, like an athlete severely compromises his daily performance if he drinks other than in moderation, or partakes in recreational drug use.

     A trader that trades 52 weeks a year without at least a handful of long weekends away from the market will burn out and perform less than at his best. If you feel sick, or are recovering from a medical or dental procedure, it might be a good day to stay out of the market. You can gain piece of mind and get a chance to relax in the middle of the day if you alternate lunch times with a fellow trader, whether in the same location or thousands of miles away. Carry your cell phone with you to lunch, knowing the other guy will call you if one of your stocks or the market in general starts moving one way or the other. This will keep you from any painful surprises when you get back from lunch. The trader needs to be sharp mentally and emotionally. The day after a large gain or loss you again need to see a flashing caution light. Your judgement is likely to be skewed one way or the other, and maybe you need to take smaller positions in the market than normal. Events in your life that have nothing to do with trading can greatly affect your trading. Relationship problems with a spouse, in-law, significant other, or child, can distract you from trading well, just as they suspect talking on a cell phone can cause car accidents. You don't need to have an accident while trading. It can cost you a lot of money. A divorce battle, a seriously ill spouse or close relative, pending litigation, or business or financial pressures can cause you to trade more poorly than you ever have before. By the time the haze clears you now need to dig yourself out of the financial hole you've gotten yourself into. Instead it would have been a lot easier to stop trading for a couple of days or weeks. Every day a trader should take a minute to evaluate what is weighing on his mind and his body. If he can clear the distraction, that's great. If not, then he should consider taking lighter positions in the market or even consider stepping away from the market until he is again back at the top of his game.

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