7 Physical Habits That Impact Trading Performance

Aug 27, 2021

Written by:
John McDowell

Too often as traders we neglect to properly audit our physical wellbeing. We wake up, roll out of bed, check our watchlists and the news, grab a cup of joe and then start putting on trades. Rarely do we give thought to the physical habits that impact trading performance, let alone create a routine that nurtures our physical wellbeing each day.

Why We Ignore Our Physical Habits

Unfortunately, trading isn’t usually treated as a “performance” activity. After all, you aren’t required to be a certain weight, run a minimum speed, or jump as high as Lebron James to put on a trade. The barrier to entry is quite low.

Too often we think of performance activities as requiring more physical criteria than does trading.

You might even go so far as to say that day trading isn’t physical at all. You can be a big, lazy bum and still make millions. And that may be true for some. No doubt there is someone out there rolling out of bed at 9:30am after an all-nighter, waddling over to the screens, and killing it off the open with no plan.

We assume so, anyway. But the truth is that if you want to be good at this, this person is the exception, not the rule.

How Trading Is A Performance Activity

In a recent interview with Dr. Brett Steenbarger, he concluded that “making a living from trading *is* an elite level of success,” akin to anyone making a living in “chess, golf, acting, music, creative writing, etc.”

He would know, having worked with some of the best professional traders in the world.

It requires a level of attention to detail, routine, and training that is no different to any other endeavor. To reach consistency in the markets, you must be firing on all cylinders. If not, it will eat your lunch.

And there are many different aspects to performance in the markets, like lifestyle, mindset, technical skill, and others. Ideally, you’ll take a holistic approach to all of them as you carefully consider where you are in your trading journey.

To that end, Créde Sheehy-Kelly, a High Performance Psychologist, has a great way of summarizing the needed approach to building good habits for your trading performance:

If you only dip in and out of random trading [development] exercises or advice and you don’t systematically implement it as a core part of your trading routine, it is like going to the gym in an ad hoc manner and arbitrarily trying different exercises – you might experience some benefits, but you’re not going to reach your peak level of strength or fitness.

Créde Sheehy-Kelly

To that end, what you do physically, day in and day out, will play a huge role in your success as a trader. Coming prepared mentally and technically is one thing, but we must be well-rounded in this game.

Let’s dive into these 7 important physical habits that impact trading performance.

1. Sleeping Habits

Completely underestimated, sleep is.

There are plenty of studies documenting the results of sleep deprivation and its impairment on cognitive abilities. But what really stands out in the literature is that even partial sleep deprivation can cause performance issues. A study by Pilcher & Huffcutt found that “mood is more affected by sleep deprivation than either cognitive or motor performance and that partial sleep deprivation has a more profound effect on functioning than either long-term or short-term sleep deprivation.”1

How many times have you heard the cliché that trading is 90% mindset? Imagine trying to make a living in something that requires your full capacity to manage your emotions, but doing so with mediocre sleep. It’s going to be a disaster.

You see, physical habits impact other areas of trading. If you struggle to manage your emotions, frustrations, and cognitive fortitude after a good night’s sleep, how bad are you going to perform when you awake tired and bad-tempered?

It’s so important that Mike Bellafiore of SMB Capital shares that his traders will modify their trading around how well they slept the night before.

If it’s that important for professionals, it should be that important for you.

Tips and Tricks for a Better Night’s Sleep

If you’re really struggling from insomnia or sleep deprivation, you should consult with a licensed professional who can help.

However, we’ve found the following to be helpful for getting settled into a good night of rest:

  1. Discipline to cut off the screens before dark
  2. Exposure to the fading sunlight (perhaps a walk before dark) or dim lights at night
  3. Eliminating dirty power outlets and other electronic devices in the bedroom (even shutting off circuit breakers)
  4. Disable wireless devices over night
  5. Calming tea or other over-the-counter supplements like melatonin and L-Theanine
  6. A dark room with a cool temperature

There may be plenty of other remedies, but these are a great starting point to help with your sleep issues.

Above all, it takes the motivation to make the decisions and stick to it. That’s what buidling better physical habits is all about — a positive impact on your trading.

2. Bad Posture Can Impact Trading Performance

On the surface, trading isn’t necessarily a grueling sport. It does, however, require stamina. Sitting or standing at the desk for long hours can be detrimental to your wellbeing. Along those lines, if you’re slumped over, tensed up, and generally out of ergonomic shape, you’re going to eventually suffer.

Blood flow is paramount to staying healthy, and a sedentary lifestyle doesn’t help that cause. Bad posture can cause back, shoulder, and neck problems. Without proper attention, these physical ailments can impact trading performance.

Consider changing up your trading desk so that you can alternate between sitting and standing. There are a handful of devices that cater to proper posture. You can use these as gentle reminders to straighten-up and pull those shoulders back and relax.

3. Take Physical Breaks from the Screen

Sometimes, remembering good posture isn’t enough. According to Dr. Steenbarger, taking a physical break from the screens during the day can serve two purposes

  1. Review performance and take corrections
  2. Relax, clear our head, and renew our energy

If you find this hard to do because you place a lot of trades, audit your trades and find the best times for trading. Moreover, you might develop your edge around the ability to trade at certain times of day.

For example, you might trade the open at 9:30am until 11am. Then take a break for lunch and come back for the afternoon volatility after 1pm.

Will you miss some trades during that time frame? Sure. But if you audit your trades and find the best time for your specific strategies, this won’t matter. Don’t fall prey to FOMO. Keep a good routine. Build physical habits that impact trading positively for *you*.

4. Proper Exercise To Increase Bloodflow

Taking breaks is a great opportunity to incorporate exercise into your routine. And this doesn’t have to be Crossfit or training for a marathon if you’re not inclined. The goal here is to get blood flowing.

During stressful situations, blood flow is redirected from our cerebral cortex to our “motor centers” like the amygdala. Why is this important? The amygdala is responsible for the fight or flight response during stress or fearful situations.

In fact, these areas contain more blood flow in patients suffering from PTSD than normal patients.2 The sad thing is, the cerebral cortex is what gives us the calm, reasoning ability to make sound decisions. So when we are stuck in front of the screens and stressed out, we are physiologically building bad habits that impact our trading.

What To Do?

It is in these moments that taking a break, going for exercise, and increasing blood flow to the cerebral cortex would help. Else we find ourselves in a biological battle between impulse control, planning, fear, and generally doing stupid stuff.

Don’t take our word for it, Mike Bellafiore of SMB Capital has discovered this himself:

Trading is a performance game.  Exercise helps us perform better as it leaves us with an ability to focus better, happier, and less stressed.  A respected market veteran with ties across the Street recently shared that he noticed an unusually high percentage of top trading performers were also competitive cyclists, runners, and triathletes.  Their workout regiment prepared them for market battles.

Mike Bellafiore

Since we’re on the subject, we’ll also mention that sleep feeds the frontal cortex as well. This is why sleep deprivation leads to mood disorders and is used as a form of torture.

Keep that in mind the next time you’re putting thousands of your hard-earned dollars on the line.

Focus on stepping away, going for a walk, jumping on the Pelaton, or doing anything that will get the blood flowing again.

5. Stretching or Foam Rolling

Any good round of exercise should be followed by a nice stretching session. Trading can be stressful. That’s an understatement. So use the opportunity of breaks and exercise to eliminate some of the tension being stored in your body.

You might think this isn’t that important, but it’s all part of paying attention to the small things. If the small things don’t matter to you, then the fine details of trading won’t matter to you either.

Take some time to do yoga, stretching, or foam rolling and care for your body. It will build physical wellbeing that influences your trading.

6. Deep Breathing To Increase Oxygen

This returns us to the topic of oxygen. We need it. Plain and simple.

Exercise, sleep, breathing: it is all part of a plan to oxygenate our blood and feed the areas that will promote positive wellbeing in our lives. Remember, more oxygen to the frontal cortex feeds our “reasoning” ability.

Dr. Steenbarger has this to say about breathing:

A great trading psychology technique is to just take a couple of deep breaths and perform a quick gut check before placing each trade.  It introduces a moment of mindfulness in our decisions.  It is difficult to trade with FOMO if you’re slowing yourself down and reflecting upon your actions.

Dr. Brett Steenbarger, Ph.D.

If you’re finding yourself amped up while trading, take a break and do some mindfulness and meditation. Here’s a great resource from Créde Performance to help you relax:

7. Nutrition and Hydration for Optimal Performance

Nutrition and hydration may not seem all that important. Perhaps you can get by with a hamburger here, a pizza there. And that may work for while. But for traders who are looking to optimize their trading and build positive habits, nutrition and hydration play a key role.

It’s quite simple really, your brain and body function best when given proper nutrients, water, and minerals.

Stacey Burke notes that there are plenty of studies that show “the healthier an individual is in terms of their diet and regular exercise, that this has a huge impact and influence on almost ALL other areas of their lives.”

If you’re going to build physical habits that impact your trading performance, you need proper fuel to do so.

Obviously we’re not nutritionists, here, but a solid meal plan of quality, organic food should be a staple in your diet along with plenty of clean water.

Avoid the sugar roller coaster and eat foods that keep your emotions stable. Here is a great article on how certain changes in diet and exercise can affect your mood and cognitive wellbeing.

The Holistic Approach

While there are many more elements of peak performance to consider, hopefully this sheds light on a handful of physical activities you can work on to increase your trading performance. Take inventory of your habits, and make the changes necessary to get to where you want to be.

We’ll leave you with a thought from Mr. Burke today.

One of the main traits of high performance traders is they master their health, confidence, and mindset. You can’t build one without strengthening the other.

Stacey Burke


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