Sleep Deprivation and Rebooting Your Brain

As many of you who have known me for quite some time are aware, I tend to have bouts of insomnia. It is not so much that I cannot sleep, since when I actually do get to bed I am often out before I can so much count to 10. The problem is that I tend to simply not feel tired at night. I am very much a night owl, doing most of my work, my writing, and my reading in the wee hours of the morning. I also like to do my market research at this time.

Ironically, I have found that on nights where I get very little sleep, I often have some of my best trades the next day. It seems to create an emotional detachment of sorts whereby I do not end up overanalyzing and instead act more on my instincts, which after all these years tends to be correct more often than not. I think that when I first began trading this would have been devastating, but now it works in my favor...

For most traders, myself included, emotions play a huge roll in their success or failure. I'm often asked about different methods to try to work through emotional setbacks that a trader has. I honestly believe that many of the problems traders experience in terms of their emotions affecting their trading comes from a lack of confidence in their system and that with experience it becomes easier and easier to act and respond appropriately. The problem is that most traders simply don't keep the right types of journals that allow them to develop as a trader. Hence they never really develop a great system that fits their personality.

The more you understand the dynamics at play in the market and how patterns develop in the first place, the easier it becomes to follow it... easier still if you aren't too hyped up in the morning and are in a more relaxed frame of mind. Now I am certainly not endorsing getting 3-4 hours of sleep a night as a successful trading strategy! It was a bit of an unexpected side effect though that I felt was intriguing to note.

So, what are some of the healthier means of achieving this same state of mind? The most obvious is relaxation exercises. These include things like yoga and visualization techniques where you picture different trade scenarios in your mind and walk through the correct ways to handle them, much like a football trader would study different plays and the other teams strategies to give them a heads up before the big game.

Although I certainly support both of these and have practiced both on and off over the years, I admit that I am a bit lax and will go for weeks on end without doing either. I really admire those who are more diligent than I at these techniques.

One of the mini ways I achieve the same type of thing is to just make sure I get up and walk around throughout the day, making sure I am not stuck in my chair all day. It gives me a breather, refocuses my thoughts, and often I come back, flip through my charts and suddenly things just pop up. A lot of my greatest setups are found like this. I like to think of it a bit like a computer reboot... If you go for too long without restarting, your computer slows down. Merely rebooting it helps speed things up!

For those of you reading this, I'd like to encourage you to send me your comments about how you "reboot" and what works for you to help block out all those crazy irrational thoughts that can throw you off track!