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I’ll sleep when I’m dead has always been my saying to live by (one of the many).  I was always the late to bed and early to rise type of guy.  Unfortunately a good night of sleep and trading go hand in hand.  Trading is a profession that will attack you on all levels, and if you are not prepared you will get eaten alive!  

Last night I did my normal midnight sleep and up at 6:30am.  When I woke up I knew I hadn’t had a good sleep, knew I had been tossing and turning, and now I was tired from it.  Well one tired day won’t kill you, but then I took it a step further.

I sat down at my computer, did my routine, waited for the market to open, and began to trade.  I had all my setups prepared and ready to take on the trades.  Morning bell rang and I started to move into some trades, 3 to be exact.  So good so far..

This is where the trouble begins to happen.  My positions start becoming profitable (go figure!).  So far the plan is going according to plan.  My trades are processes I’ve done many times so it requires no thinking.  Get in at this point, scale out here, and set stop here.  

Well, as it turns out, being a tired trader makes it hard to be quick.  When you are a momentum trader making day trades it helps to be quick.  I watched my portfolio go from +2.5% to -2% because I wasn’t fast enough to scale out and manage my trades.  My process was broken because my eyes weren’t seeing the numbers fast enough, my brain wasn’t calculating the shares fast enough, and my fingers couldn’t click the buttons fast enough.  This was a recipe for disaster.  I saw a 4% portfolio swing just because my normal sleeping hours were interrupted with tossing and turning.

Trading is a mental game, and if you are going to win you need to be prepared.

                       

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