Every profession requires focus to some degree or another. Some jobs are inherently tougher than others which would require greater focus but, no matter what the profession, battling distractions and focusing on the task at hand is an implicit requirement. Drivers are told not to take their eyes off the road, baseball player must keep their eye on the ball and dancers use a spinning technique called spotting in order to enhance control. Even in the original Star Wars, Luke Skywalker was told to stay focused by avoiding the temptations of the dark side. Whether you know it or not day trading has many distractions that will ruin your process. Some of those distractions are mental, some are physical and others are behavioral. So, if you are new to day trading and don’t know where to start or you have been around a while and aren’t consistently making money you might be suffering from 1 or more of the 10 day trading distractions.
Looking at Other People’s Profits
People think looking at other people’s profits is inspiring. It’s not. In fact it is distracting to the process and is highly used by many as a marketing tool to lure in new clients. Oh look at me I made $69,417.23 in 3 minutes and you can too if you pay me to learn to trade like me. Let’s be real… Controlling your emotions is paramount in being a successful day trader yet seeing other people’s profits will elicit the same emotion you are trying to control. In addition, there is no other profession in the world where one dangles their profits in your face in order to inspire and teach you a life long skill. I will even take it a step further. I highly suggest you turn off your own profit and loss module on your trading platform to focus on your trading plan and get focused on making Your money.
Tip – If you need inspiration read Rumi, listen to Deepak Chopra or watch Rocky.
In 2015 I deleted my Facebook app on my phone which has saved me hundreds of hours. I have scaled down quite significantly on my social media as most of it serves no real purpose in my life. However, as part of my Stock Research to build my watch list, I do use Twitter to support or reject my trading idea. That doesn’t mean I use it to see how little Kim Kardashian is dressing again. Doing so would totally distract me and my focus so I am very specific on what I look at and do during the market hours. In fact, I only follow 26 people who I feel might help my process in some way or another. Every few months I reevaluate, unfollow the noise and move on.
Tip – Go through your social media and start filtering out the noise. You will be surprised how much time and energy you save.
Family & Friends
I can’t trade with my friends or family standing around me. It distracts me and I know it hurts my process. Ironically I have danced on some of the biggest stages in the world and I loved the attention back then. However, there is something completely different with someone standing over my shoulder watching me push a few buttons to get in an out of a trade. Yes I have done it plenty of times but I already know if my son or daughter are sick and have to stay home from school it will be a very minimal trading day or it will be an off day altogether.
Tip – If trading with people around You doesn’t distract You then go with what works best for You.
You need the right tools to day trade successfully. Having a weak internet connection is bad, not having the right broker is bad and not having hot keys if you need to move in and out of a stock quickly is… how should I say this… BAD. Those are 3 distractions that you must learn to deal with immediately or you will fail hard. Imagine not having hot keys and trying to jump into a momentum stock that is fast and volatile. There is a possibility you get in but if the trade goes against you and you can’t use hot keys to get out you will make big mistakes that you might not be able to recover from.
Tip – Don’t experiment if you aren’t equipped to trade. Add the correct tools and trade accordingly.
Trading is a waiting game. You spend most of your time waiting for your setups and if they don’t come you have to wait some more. If you have to be somewhere at 10am and you want to trade the opening bell you will be distracted the whole time. If you do happen to place a trade you might find you are not truly invested in your process and trading plan because your thoughts and energy are on your 10 o’clock appointment. The pressure of your schedule might make you exit a position too quickly or hold longer than normal adding randomness to your process which is a distraction you do not need.
Tip – If you have plans to do other things throughout the day don’t plan to trade.
Needing Trading Profits to Live
If you are financially pressed to make a living day trading stocks you will find the thought of making money one of the biggest distractions eroding your process. The goal of every trader is to be process oriented and not outcome oriented. If your thoughts are on paying your rent, catching up on your bills or putting food on the table you will never focus on the process as your life depends solely on the outcome.
Tip – Prove to yourself that you can be consistently profitable before making your living day trading stocks.
Changing Strategies Often
Everyone makes money day trading according to every trading chatroom or social media outlet. In fact, I rarely see someone admit losing money which is not good for business. However, if you are the lone loser in the stock market (trust me you are not) you will jump from the strategy you are perfecting to someone else’s strategy. Then when that isn’t working for you right away you will jump ship again and go with the next “perfect and profitable” strategy that someone else never loses with.
Tip – Find your personality in trading and learn to perfect a strategy that works for you without changing strategies often.
I had someone argue with me recently that you can be consistently profitable by shadowing someone else’s trades. They are 100% wrong. In fact, they are 1000% wrong. When I wrote the 20 trading secrets I wish I knew before I started trading I wrote about the inconsistency of following someone in and out of a trade. Here is what I wrote.
“Imagine what it would be like if you had to wait if the person you were following was breathing or not. What kind of consistency would you be able to replicate by waiting to inhale when your followee inhaled or when your followee exhaled? If you compare it to following someone into a trade it’s easy to see why 90% of traders… how shall I put this… Die.”
Tip – Learn the reasons someone is entering or exiting a stock and then apply that to your trading.
Learn to control your emotions, then learn to control your emotions and when you are done with that then learn to control your emotions. I can’t stress it enough your emotional state of being is one of the most important aspects to becoming a consistently profitable trader. Revenge trading, false inspiration and a bad attitude will ruin any chance you have at day trading success. Have you ever wondered why high frequency trading is at an all time high. Aside from being extremely fast at executing trades it removes all emotion from the equation. In fact, I have toyed with the idea of setting up a HFT system to avoid self emotional sabotage.
Tip – Minimize all stimulation that affects you emotionally while day trading. Even too much positive emotion can be harmful.
Like social media, gadgets are distracting. Text messages, people IMing and phone calls at the wrong time will distract you at the worst possible moment. Even if you are a part of a stock chat room you might find the moderator is distracting calling out stocks that you aren’t even watching. That is not all. If you like watching stock market television like CNBC you might find their commentary to be equally distracting while you are managing a trade. I totally understand that some gadgets serve a greater purpose but if it is distracting you and your trading plan turn it off immediately.
Tip – If your devices distract you, turn them off and check them (along with social media) at specific times during the day.
If any of the above distractions truly distract you, you need to make a conscious effort to change them immediately. If there are other distractions that aren’t on my list but have you thinking then change those to strengthen up your trading day. Lastly I would be very careful finding inspiration from the marketing tactics used by many. In my opinion they are worthless, harmful and dangerous.
If you agree, disagree or want to add something below I would love to hear your thoughts.