One of the many challenges that comes with trading options or stocks are the myriad distractions that tend to get in the way of accomplishing our goals. Distractions can be market-related or just life-related. Because trading requires intense concentration and focus, getting side-tracked can cause some real damage.
The best traders learn to manage distractions and minimize the impact on their profits and losses through discipline. They also learn when it’s important to step away, take a break, and allow their minds to refocus before getting back in the game.
There is no doubt that my best trade results occur when I have fewer distractions during the trading day, but of course there are times when distractions cannot be avoided. Whether it’s non-stop phone calls or having to pick up my kids, I always need to find a way to control these distractions and get back to my job of options trading. If I am too distracted, I will take a walk or take trades down, and I will start over when my mind is fresh.
My most costly distraction happened a few years ago. It’s embarrassing, and I’m not proud of it, but I will share it anyway. I was loaded up on some call options and quite a few had no hedges. Suddenly, I get a phone call from my daughter’s school. She left her lunch and homework at home, could I please bring them right away. Because it was a quick trip, I figured, no need to protect those calls, I’ll be right back. I jump up, rush everything to her school, and am back in front of my computer 25 minutes later. That’s when I see it: My options had plunged, and all the sudden I’m getting hammered. It was my own version of a terrible, horrible, no good, very bad day.
I was beyond shaken and upset, but I knew that I needed to suck it up and move on – and that is exactly what I did. Over the years, I have learned that distractions can be dealt with quickly, calmly, and appropriately. Learn to manage the distractions that you can’t control and eliminate what you can control (turn off ringers, shut down email, and get in the habit of creating to-do lists).
When you trade with a clear mind, you will absolutely take your game up to the next level.