Many traders believe that emotional decision making is the cause of why most people fail at trading or lose money. However this statement is also true at some points but there are other factors as well which may hurt the trading performance and discipline. In today’s blog we are gonna talk about the another factor which can destroy the trading performance that is “Boredom”.
Most of the people must have heard this statement that “i have done this because i was bored at that time”. He/she didn’t do it intentionally but out of the boredom they did it. Same is applicable in the trading also because the real doesn’t excite you everytime whether you are in the winning trade or the losing trade. When the charts are doing nothing and you wanted to do something productive. That’s the time when boredom forces you to trade. This leads to trade without the valid setup and confirmations.
Why Boredom Happens in Trading
When are the markets are choppy or trading in the consolidation, that’s the time when boredom triggers. However the markets are creating opportunities every seconds and every minute. But the market doesn’t create high probability opportunities every time. The market needs time to create high probability opportunities.
Why Boredom Occurs
Waiting For Setup: Trading on high probability setup requires patience. Because the market takes time approach that level. However it’s not about only approaching the level but meeting the certain criteria to take trade. If the market didn’t meet a single criteria then you are gonna avoid the trade.
Ranging Markets: When the market doesn’t have enough liquidity to move in certain direction, the market usually trade sideways.
The Human Craving For Excitement: The human always seek something to do productive and actions. When the market doesn’t move the way you want, the human mind want to feel excitement and joy. That’s the factor why most of the traders engage in the impulsive decision.
The Routine of a System: Consistently following the same process and same strategy, give you the results over the long period of time. But sometimes routine feels bored and this may lead the impulsive decision or trades.
The Problem With Always Needing Action
Most the of traders believe that in order to be the successful trade, we always have to trade every time. Meanwhile this approach often develop pressure to find the trades. In this circumstances the traders often prioritize the impulsive trades doesn’t matter low or high quality trades.
Why Continuous Trading is Destructive
Dopamine Addict: Being in a trade feels more exciting and the feeling of joy rather than waiting for the setup. This approach forces the trades constantly clicking the buy and sell buttons instead of waiting for the trading plan to execute.
Institutional Exit Liquidity: Forcing the trade often ends up with buying at the top or selling at the bottom. Profession players generate liquidity and impulsive retail end up being their liquidity.
Forcing Daily Goals: Finding the trade to complete daily target profits often involves more risks. Because you begin to find the trades when the markets are unclear, unfavorable or trades in consolidation.
Burnout and Capital Reduce: Continuous trading or pressing buy and sell buttons constantly increases the chances the chances of the capital wipe out in the early stage of the trading career. Meanwhile it prevents you from grabbing high probability opportunities.
How Boredom Leads to Overtrading
Human brain is designed in a way it seeks excitement over the opportunity. When the markets are slow and choppy traders seeks urgency to make profits or stay productive. This kind of mindset not only damages the trading account but it can leave a bad impact on your trading career. Resulting you may start calling trading as the gambling and what not.
Running After The Dopamine: When the markets trades slow, the brain tries to escape the inactivity by seeking out the any action.
Wrong Logic: Continue to staring at the screen may cause you to find the low quality setup, which causes the trading account.
The Danger of Being Rewarded: Forcing the trade sometimes may give you the reward or may end in the profits. But will develop the mindset it’s a good strategy of forcing the trade because eventually the end goal is to make money.
Why Boredom Causes Traders to Break Rules
Every trader makes clear set of trading rules. which needs to be followed at the time of executing the trade. Meanwhile the boredom often causes to abandon that trading rules. When the markets trades flat or doesn’t move in any direction and doesn’t approach any level. The waiting feels like the failure and this often initiate forcing the trade and ignore the set of rules for quick rush.
Why the Brain Sabotages Itself
Dopamine Starvation: When the market doesn’t create opportunities over the long period of time. The human brain isn’t wired like this to sit quietly and stare at the charts, do nothing. However the lack of opportunities starves the brain for dopamine.
The Urge To Do Something: Many new trades believes that doing nothing is equal to the failed traders. This causes them to keep pressing the buy and sell buttons.
Developing Illusions: During the slow market, the restless traders often see setup which isn’t there actually. They mentally document these types of setup which isn’t there according to the strategy.
Practical Ways to Manage Trading Boredom
Boredom is actually good sign in trading. Boredom indicates you are repeating the same process everyday. Everyday’s same process can’t be exciting. It shows that you are patiently waiting for the setup and waiting for the right opportunity to grab. Boredom is the sign of discipline and part of the strategy.
Embrace Boredom as a Strategy
Restructure the Approach: Take boredom as the part of process and progress. It reveals that you comfortable in waiting for the high probability setup rather than forcing the trade.
Limit The Trading Hours: Rather than trading or constantly staring at the screen for 24 hours won’t make rich in the overnight. But limiting trading hours for a day, will put pause on losses and improve the trading quality.
Set Price Alerts: Rather seeing the screen continuously for hour’s, use price alert system in the trading chart. However it will reduce the trading time and indicate you when to look at the charts.
Conclusion Words
However the boredom isn’t dangerous as greed or fear but it works as a silent killer in trading. It quietly forces traders to engage in the unplanned trades.
Abandon rules set is the common sign of trading out of the boredom, fear or greed
In trading patience lead to the high probability opportunities and boredom develop more risk.
Sit quietly when the markets isn’t favoring your trading conditions, is the essential skill a trader can develop in order to be successful in trading.