Fourth Habit of Highly Effective Traders

I went short on the Nifty yesterday when it broke below 4835. I will cut my short and go flat if it trades above 4941. I will not go long today. From the above statement it is clear, that in the next 6 hours of the market, I will, with any luck, do nothing. I will hopefully be just staring at my favorite anchor. The danger for any aspiring trader is that he will succumb to boredom and trade just to feel that he has done something during the day. The single greatest reason for failure in trading is the mind numbing boredom and the need for excitement. The first three habits therefore dealt with just this issue. Once one has imbibed this it is time to take this to a whole new level.

Why waste time doing only irrelevant things like playing games on the internet or watching TV. Why not find a way to earn some money while ensuring that one does not overtrade. This is where the fourth habit comes handy. Write a book, teach trading.... do something that will earn you extra bucks. But going by our philosophy of not taxing oneself too much, do not put too much effort behind whatever you are doing. Remember this activity is just a filler for your real passion of trading. It is not your main revenue earner. Therefore if you decide to write a book, use you abilities from the third habit to get as much material as possible from the internet. Once you decide on the chapters of the book, use as much material as possible from what is freely available in various sites. Use your creativity only to ensure that you cannot be caught copying this material. Despite the ease of writing a book on trading, the problem is to find a publisher and then more importantly a buyer for the book. If this activity is very intimidating then teach trading. There is enough material out there and happily enough people who want to learn how to trade. As long as you say that you are throwing in some trading system for free, you will find enough takers for your course.

If even this is very difficult for you, then the only option left for you is to con some TV channel to pay you for your views. Instead of just spending time watching TV as suggested in the first habit or online playing games as suggested in the third, the fourth habit takes the spending of time to another level which also ensures that the trader supplements his lumpy trading income with some regular cash flows. The practice of this fourth habit will also add to your abilities for the sixth habit which I will write about day after tomorrow.

As an aside I must admit that writing about these habits has actually helped me. I was spending so much time reading about all the problems in Europe and the catastrophic possibilities of a default or a bank run in Europe that I was beginning to get very negative not just about the markets but negative in general in my life. However in the course of writing these notes and attempting to make them interesting (notice I said attempting to make them interesting) I have managed to get out of that rut. So whether these habits are good for a trader or not, they have definitely helped me!

And heres wishing me a day of just watching TV!