Yerkes-Dodson Law
Whilst driving down the motorway/freeway/autobahn/autostrada at 80 mph you notice that a lorry about 300 yards ahead has started to drift into your lane. You immediately ease off the accelerator (even in a Toyota it is worth a try) but you often do something else, something which you may not even notice, you turn the music down.
The reason for this is a subconscious recognition that our mental performance decreases as arousal (not that kind) increases. You turn the music down to free up your brain to deal with the sudden change from monotonous driving to a potentially hazardous situation. Much of the theory of this is crudely summarised by the Yerkes-Dodson Curve.
This week I have failed to turn the music down.
There are the ‘directly related to trading‘ activities. I have been trading my usual 3 FX pairs, 2 index futures (with little enthusiasm) and also monitoring a couple of other markets that I am starting to become interested in (yes Solfest, including oil).
Then there are the ‘not actually trading but trading related‘ activities. Chatting on IM, maintaining this blog, reading (then ignoring) financial stories and tinkering with IT.
Then there are the ‘you work from home so could you…?‘ activities. Doing the shopping, vacuuming and wondering why dogs feel the need to throw-up at their owner’s feet rather than outdoors before realising that “wondering about it” won’t help to clear it up.
I don’t know if this sounds familiar to you (perhaps not the dog vomit) but I am certain that I am way past the point on the Yerkes-Dodson Curve where my performance starts to decline. I hate to use the phrase “declutter” (“decluttering” seems to provide cheap fodder for daytime TV shows where people with borderline obsessive-compulsive behaviour are forced to sell their prized collections of junk for our entertainment) but it is probably the best word to describe what I need to do.
Any ideas on how to provide better focus as a home-based trader then please let me know. Actually, this is so important, then either let me know or the vomiting dog gets it.
I’m torn.
You may require an intervention. However if that intervention eliminates the possibility of a BBC news story about a day trader holding his dog hostage at gun point then I’m not sure it’s worth it for me.
solfest
March 5, 2010 at 3:49 pm
It’s easy for you to be unsympathetic, I’m sure that cat-otter-seal of yours doesn’t throw up mid oil inventory (by the look of it I am not sure that it eats).
long&wrong
March 6, 2010 at 10:48 pm
First of all I question whether the dog really understands the implications of his current “situation.” Therefore I’m not compelled to react to your threat with any real haste in order to save him from some perceived mental anguish.
However, I am compelled to respond to the topic of your post because I experienced it firsthand just this morning.
I was long 6E, 6B, and GC when, after receiving an email from my mom (mum? And should we capitalise it?), I called her on the phone to provide her with some of my deep wisdom when I saw two of those three markets pausing at what could have been important levels. I however didn’t get off the phone, but moved my stops up and kept chatting. But at the same time I felt uncomfortable and didn’t really know why.
As soon as I was off the phone I was stopped out of all three positions with profits, but I realized that I had acted in a way that was counter to what I’ve been doing consistently lately.
It was without doubt the fact that I wasn’t directly involved with my trading when it was important to be. I was distracted with the thought processes I was trying to communicate and it threw my method off.
I’ve been an independent contractor for about 10 years and worked from my home office for more than 8 of those years, and while I do have my at-home weaknesses (refrigerator, bathroom, Starbucks whenever I want), I’m quite defensive about my work time and my work environment.
My daughter still makes fun of the fact that I won’t/don’t allow anyone to take anything out of my office. If I have to look for something then I’m wasting my time.
And when I’m in my office working, everyone knows that I wouldn’t be in here working if I wasn’t serious about it and intent to get whatever I’m doing completed efficiently and effectively.
So I would say that if you were playing at a hobby and spending money rather than making it, then interruptions and other activities would be acceptable.
But if you’re bringing home the bacon and enriching others lives with the results of your activities (even if you’re not buying them a new Aston Martin Vantage or something equally lovely), then boundaries should be set (by you), and they should be consistently applied (again, by you).
Dog barfs – you leave it until you’re finished trading; somebody needs clothes washed – they get cleaned when the market is closed; IM pings at you – umm, that shouldn’t even be on!; phone rings – there’s a new invention called “voicemail,” let it do its job; doorbell rings – peek out the window and snicker because you know you aren’t going to answer it; blogs need to be read – really?; posts need to be written – really?
With the rare exception such as my phone call mishap this morning, I’m quite serious about making my trading a priority. No messing around when my financial (and personal) future is on the line. And just because I’m “at home,” it doesn’t mean I’m not working.
I know that multi-tasking has been a big thing, but I also know that there’s nothing more powerful than focus. I haven’t had time for my blog or other less-than-critical activities lately because of work and trading, but both of those are the most important things right now. The dust bunnies, dirty toilets, and insightful blog posts will have to wait.
Now if you’ll excuse me, I have to go get my clothes out of the dryer, wash the dog’s butt (bum?), put some dishes away, pick up some groceries, pay some bills, clean the cat boxes, exercise, finish this comment to your post…oh yes, and make a profitable trade or two.
-AT
P.S. I can’t help but notice the inconsistency: speaking in terms of MPH and yards rather than KPH and meters, but then using “lorry” rather than “truck.” And I thought you were metric over there…
Attitude Trader
March 5, 2010 at 8:19 pm
AT, thanks for the thoughts (although the philosophical introduction caused me to ponder on my dog’s self-awareness for longer than was strictly necessary!).
For cultural reference… The UK distinguishes itself from mainland Europe in two ways, (1) Retaining mph/yards in an otherwise metric system and (2) Much worse food.
long&wrong
March 6, 2010 at 10:54 pm
one of the things I do while trading to keep me mentally focused is playing online poker (w/ play money..i’m not a gambler
). Playing poker lets me realize that trading is exactly a game of probabilities and playing strong positions (hands) and not get faked out by the ‘bullies’. I also have a gym set so i work out while waiting for a trade to realize the TP or S/L. I used to take naps in between setups..not a good idea…
hilmy
March 5, 2010 at 10:39 pm
hilmy, thanks for the comments, although when *I* play poker I just lose my trading profits faster than I can make them!
I found your blog interesting (it was new to me), nice to see someone else following the simple (in the best sense of the word!) approach to trading.
long&wrong
March 6, 2010 at 10:57 pm
I totally agree with AT.
And my cat (Keish) loves throwing up on my carpet when I work. I habitually ignore it until D gets home (and he will do the cleaning up).
Jules
March 6, 2010 at 2:51 am
D deserves a medal, or at the very least to be told on a regular basis that he looks like Hugh Dillon.
long&wrong
March 6, 2010 at 11:01 pm
Thankfully, I have worked out an arrangement with my dog while I’m trading. He sleeps. (the result of much exercise each morning!)
Hmm… Y-DL may explain why I can only focus for the first 60-90 minutes after the opening bell.
daytrader233
March 7, 2010 at 12:42 am
I could remark that we have the same breed of dog but then it would be clear that I have been cyber-stalking Mrs DT following her comments on Capital is Scarce
long&wrong
March 7, 2010 at 3:10 pm
LOL!
daytrader233
March 7, 2010 at 6:11 pm
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