In this piece, I’m going to tell you about a very simple thing I do that makes my trading day more efficient. It has raised my game significantly, and it can raise yours too.
But first I want to sell you on why efficiency is so valuable – and why eliminating waste is so important.
For the versatile trader, time is money. Top performers know that a quiet sense of urgency (not anxious, but calm) is a good mindset to cultivate.
Why the quiet sense of urgency? Not because life is a giant treadmill or a frantic chase.
In markets, there is always new opportunity to be seized. Outside of markets, there is always more life to be lived.
Even during periods of choppy, sloppy, directionless activity – where the proper trading stance is doing very little – there is plenty to get done.
New techniques to investigate… past trade histories to analyze… new themes and ideas to research… when it comes to performance and process, the scope of potential projects is endless.
At the same time, life itself offers a rich palate of meaningful and desirable choices. Working smarter, and not just harder, frees up more time and energy for the good stuff beyond the computer screens.
Books to read, trips to take… candlelight dinners, concerts and events… laughing, loving and relaxing… time and room are needed for all these things.
And that’s why efficiency is so important. It’s a shame that efficiency is seen as such a geeky virtue. After all, it sounds odd to say, but efficiency is sexy – at least in this trader’s humble opinion – because efficiency is power.
The power of efficiency is perhaps most elegantly demonstrated in the martial arts, where the impact of a punch is not a byproduct of pure arm strength. Instead, it is all about speed, grace and form.
The flipside of loving efficiency is hating waste. Efficiency nuts (like yours truly) hate waste like New Yorkers hate bed bugs. Squandered time, squandered effort, squandered energy down the drain – that’s precious life force slipping away.
(Note that activities like drinking hot tea on a rainy day, playing a game with a child, or staying in bed on a lazy Sunday do not by any means count as ‘waste.’ They are the small pleasures that life is all about, and eliminating waste makes more time for them.)
Little Things Add Up
Let’s walk through a quick hypothetical scenario for further motivation.
If your job is comparable to the American white collar average, you’re likely to put in about 50 hours a week.
(If you’re passionate about what you do, it may be more than that. It certainly is for us.)
So let’s say, with all the routine work-related stuff you do, you manage to carve just 20 minutes of downtime out of your day by becoming more efficient.
Twenty little minutes. Not a big deal right? But think about how that adds up, day after day after day.
If you get a little work done six days out of seven, that’s two hours a week, week in and week out. That comes to 8 hours a month plus change. Over 50 weeks’ worth of work, that’s an extra 100 hours a year.
One hundred hours per year! Now we’re talking. A full two weeks worth of work! Or vacation, depending on how you use it.
Just think what you could do with an extra two weeks a year.
But really it’s more than that, because not only are you “freeing up” two weeks worth of productivity, you’re also cutting out two weeks of stress, waste, and wasted time.
And this makes you more competitive, because you wind up either 1) more rested and relaxed, 2) more productive in a shorter space of time, or 3) both!
You benefit coming and going – from the elimination of waste and the new application of freed up energy. So in some ways, the double count makes it like finding four weeks – roughly an extra month.
A whole month! Just from reclaiming 20 minutes a day, in the name of compounding, for the worthy goals of work and life success.
And of course, if you aren’t super efficient already, maybe you can find more than 20 minutes. What if you could find 40 minutes? Better still, what if you reconfigured your habits and methods to get the equivalent of a full-on extra hour, every single day?
Dick Hamming, an accomplished mathematician at the legendary Bell Labs, put it like this:
Given two people of approximately the same ability and one person who works ten percent more than the other, the latter will more than twice outproduce the former. The more you know, the more you learn; the more you learn, the more you can do; the more you can do, the more the opportunity. It is very much like compound interest. I don’t want to give you a rate, but it is a very high rate. Given two people with exactly the same ability, the one person who manages day in and day out to get in one more hour of thinking will be tremendously more productive over a lifetime.
So that’s my little speech as to why you should take efficiency seriously. Small, incremental improvements are the unsung path to greatness.
The Simple Secret
Now: I promised a simple and effective way to raise your game… on a daily basis… starting right now.
I have to warn you though, it’s a simple thing. It’s so simple you might even laugh.
But once it clicks, I think you’ll understand. Here it is:
- Every 30 to 60 minutes — at structured intervals throughout the day — stop and ask yourself: How am I doing?
That’s it. That’s the secret. If you want to get more advanced, you can add these bonus elements:
- Take a slow breath, focus on the present, and mentally reclarify your objectives for the day.
- Learn to “focus and clarify” every time you notice your breathing, as a simple matter of habit.
Okay — now let me explain why this is powerful.
You’ve certainly heard how important it is to “focus.” But focus takes effort, just like walking up a flight of stairs takes effort. It’s a deliberate application of conscious mental energy.
When we “flow” or get into “the zone,” focus seems to dial in all by itself – automatically, for hours at a time.
It’s awesome when that happens, and there are ways to cultivate that state. But it doesn’t happen on command, and it certainly doesn’t happen all the time.
Much of the time, the mind is prone to distraction instead. And the distracted mind likes to wander.
You know what this is like: You’re trying to get traction on a project, and for some reason it’s like yanking an old lawn mower cord, and next thing you know you’re wasting time on some website, or checking your email for the umpteenth time. Before you know it, 45 minutes – a fair chunk of your day – just went up in smoke.
What happened? You lost focus.
The “How am I doing?” question is a form of self-assessment. The magic comes from building self-assessment into your routine, at regular intervals throughout the day.
Another way to think of it is like driving your car down the highway. How do you stay between the lines? By making small, incremental adjustments the whole time. These adjustments are so minimal you probably don’t even notice them. But if you pay attention they become obvious. Drift a little to the left, self-correct. Drift a little to the right, self-correct. You can apply the same idea during the trading day.
Short-Circuiting Bad Patterns
Another beauty of the self-assessment habit: It short circuits bad patterns.
Once again, we’ve all had experience with this. You know those days where you’re really grumpy and cranky – and everyone seems to notice but you? And then, finally, a friend or a family member says gently (or maybe not so gently), “You know, you’re being a real jerk today.”
It hits you between the eyes. “Whoa – I guess I am being a jerk. Sorry about that. I didn’t even realize…”
Bad patterns creep up on us. Often they are triggered by an external event. Someone gets on our nerves, or the stupid computer isn’t acting right, or Mr Market is being an ass – and for the rest of the day, our emotions are out of whack, with cascading negative impact on every single decision we make.
In poker parlance, these bad patterns are known as “tilt.”
As poker pro Tommy Angelo notes, there are many different kinds of tilt: Soft Tilt, Hard Tilt, Steaming Tilt, Rage Tilt, Apathetic Tilt, Revenge Tilt… All these forms of tilt have one thing in common though. They’re damned expensive!
And of course, “tilt” is just as expensive (if not more so) in the markets.
So when you stop to self-assess – when you take that deep breath and ask “How am I doing?” – you are deliberately taking a step back. You’re detaching from the situation, viewing yourself at a distance. For that brief moment, you are like Mr. Spock, observing a curious instance of earthling behavior — and making note of how best to adjust it.
And so, if you recognize a bad pattern in that moment of Spock-like self-assessment, you stop. You take steps to short-circuit the pattern and break the cycle. You calm your emotions, find your rationality, and get your focus back. You self-correct, like the car on the highway that was drifting out of its lane.
And then you stand up (if you’ve been sitting), shake off the daze, and recommit to focusing on your key goals and objectives for the day. If you notice your “A” Game had slipped down into your “C” Game while no one was looking, you snap it back. And you get it done.
Use a Timer (Seriously)
If you really want to get the most out of this concept, I would suggest using a timer.
It doesn’t matter what kind – it could be an hourglass, a cheap Radio Shack job, or the one built into your phone.
Then once you have the timer, divide your day up into rounds (like boxing rounds). Somewhere between 30 and 60 minutes feels about right. Assess at the end of each one. How did it go? How did you perform? How can you step up for the next round?
This idea can work especially well for traders because each market day is already like a series of boxing rounds – there’s the opening bell, the closing bell, and the fight in between.
(I was originally inspired to this notion by Marty Schwartz, who described the boxing rounds concept in Pit Bull.)
As a side benefit, the timer can be used in respect to quote screens.
As active market participants — though not daytraders — we regularly make adjustments and key off inflection points during the trading day. We have audio alarms set at important trigger levels, to let us know when something is happening.
But at the same time, neither of us has the luxury of just staring at the screen for hours. (Talk about a time sink!) There’s always stuff to get done, and no time for “screen trance.”
And so, in addition to the self-assessment aspect, the timer helps instill a discipline of only checking the quotes at logically spaced intervals (unless an alarm goes off). Considering how many hours are wasted watching meaningless ticks, this alone could count as a major productivity boost for traders.
Anchoring Your Breathing
Finally, if you really want to improve performance – not just in productivity terms, but whole life terms – consider taking the concept to the next level with your breathing.
The way to do this is by “anchoring” the self-assessment habit to a conscious deep breathing process.
Whenever you stop, notice your breathing, and deeply inhale and exhale, you can develop the beneficial habit of automatic self-assessment — turning that breath into a natural signal for stepping outside yourself, viewing your actions and emotions from a distance, and making the necessary adjustments to self-correct.
I’ll wind down with a little martial arts inspiration. The following is from the Wikipedia description of Mushin, a concept embraced by Bruce Lee – and something we all could use more of.
Mushin is achieved when a person’s mind is free from thoughts of anger, fear, or ego during combat or everyday life. There is an absence of discursive thought and judgment, so the person is totally free to act and react towards an opponent without hesitation and without disturbance from such thoughts. At this point, a person relies not on what they think should be the next move, but what is their trained natural reaction or what is felt intuitively. It is not a state of relaxed, near-sleepfulness, however. The mind could be said to be working at a very high speed, but with no intentions, plans or direction. In analogy a clear mind is compared to a still pond, which is able to clearly reflect the moon and trees. But just as waves in the pond will distort the picture of reality, so will the thoughts we hold onto disrupt the true perception of reality.
Imagine if you were able to attain the ideal of Mushin in your trading – not just sporadically, but nearly every single minute of every single day. How much better would your results be? How much more could you achieve?
At regular intervals, like clockwork throughout the day: “How am I doing?” Your game will surely improve. How could it not?