Impaired driving and impaired trading

This is the second in a series of articles that began with the article entitled “Are You Fit To Trade?” dated February 26, 2007.

Why should you be concerned about being fit to trade? Isn’t it just a matter of sending orders to your broker? Au contraire.

Trading can be as dangerous as driving an automobile. Would you drive if you knew your ability to drive was impaired (e.g. by alcohol or medication)? Maybe you would, but would you agree that your chances of getting into an accident are higher when you’re not fit to drive? The same line of reasoning applies to trading when you’re not fit to trade – you’re more likely to get into an accident.

So how do you know if you’re fit to trade?

One way is to just ask yourself if you feel that you’re fit to trade today.

A variation of this is to rate yourself on a scale from 1 to 10, and decide that you’ll only trade when you’re at an arbitrary figure like 7. Then keep a record and compare your results to your self-rating to see where on your self-rating scale you need to be historically before you can get good results in trading.

continued tomorrow ...

Copyright 2007 Raymond T. Lee. All rights reserved.
Leisurely e-Mini Futures Trading
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