Second Habit of Highly Effective Traders

 Before I start on the second habit, let me take a minute to talk about my positions. I am flat on the Nifty. I will go short if Nifty futures falls below 4900. Until then I remain flat. I will not go long today.

I believe that there are a few a people who actually read my note for my views on Nifty. They can stop here. The rest who want to read about the second habit can continue. Second Habit Goes : Meditate for 30 minutes in the morning and exercise daily without exception.

I know most of you will think that I propogate Meditation to ensure reduction in stress levels and to help a trader concentrate better. But you really do not buy that fairy tale do you? I mean why should meditation for 30 minutes be any better a stress buster than 30 minutes of extra sleep? We are all probably more stressed out and tired due to lack of adequate sleep than because of any pressure in trading. Meditation is to practice inaction. Most people are used to jumping around like monkeys believing doing something is equivalent to efficient working. Trading actually has more in common to two gunfighters in an old Western. Do you remember the typical scene. Two cowboys stare at each other. Their hands poised near the holster. The camera pans on both their faces. The tension fills the air as both stare at each other. Then they start walking the ten steps away from each other. At the end of which the two will turn and start shooting. The key for success in this deadly duel is to be able to remain calm and collected until the moment comes for action. Draw too fast and the cowboy increases the possibility of missing his shot. Draw too slow and you could get shot. The ideal option is to be able to walk the ten steps without mentally pulling the trigger and then to turn, take aim and then shoot.

The trader too needs to be able to wait out a market which is not giving him any buy or sell signal. He needs to wait until the time the market gives him his required edge when he has to calmly and efficiently pull the trigger. All this is actually alien to human nature because from time immemorial action has been equated with working and we are all wired to continuously do something. Therefore the morning practice of 30 minutes of inaction will stand the trader in good stead. He will get better at it with time.

What about exercising then. Everybody leads a sedentary life these days especially a trader. Even more so a trader who has practiced the first part of this habit. All that inaction and the eating that might go with it will turn you into a fat slob. This exercising is essential really for survival. It will ensure that you will live long enough to enjoy the fruits of your labor. But if you as a trader do not have any intention of practicing the rest of the habits that I am going to write about then you do not need to bother with the exercising too. The chances are that you will be losing all your money and the only option left to you will be to test the law of Gravity, specially from the top floor of a high rise. Why bother about exercising then? 

The practice of this habit will therefore help the trader improve his abilities in implementing his trading skills and at the same time will ensure that he will live long enough to enjoy the benefits of trading well. An ideal combination you will agree! 

Just to remind you that I am flat and will short only below 4900. No going long today.