Optimization Considerations for the Day Trader
Optimization Considerations for the Day Trader
How does your health and fitness affect your cognitive function? Can a day trader optimize themselves to perform better? I will discuss this and provide the protocol I will implement this New Year.
Disclaimer: the following post is an organized representation of my research and project notes. It doesn’t represent any type of advice, financial or otherwise. Its purpose is to be informative and educational.
It’s a New Year’s Resolution post, y’all! Kind of. Actually, I’m not too fond of New Year’s resolutions. I know how hipster of me, but it’s true. They don’t ever stick. Goals hold little weight for most people. There isn’t a dire enough need to accomplish it, so they tend to drop them once it gets tough.
I am no different. Instead of creating goals, I try to address a problem. For example, instead of making a goal to lose ten pounds, I try to find the causes of my weight gain. Is it diet or just the recent influx of Little Debbie Christmas Tree Cakes? What about the fact that you haven’t run or lifted in over two months? All of the above?
It’s a lot easier to take action when there is a consequence if you don’t. Keep eating like shit, gain weight, and increase health concerns. Stop lifting; get weak. Stop running; become slow. You get the picture.
What does this have to do with day trading? Everything.
It doesn’t take long for the trader to come to terms with the fact that they decided to pursue something that isn’t easy. Some things are easier to understand, and the underlying concepts are deceptively simple, but I haven’t seen anyone say it’s easy to be a <$insert type of> trader. I have found it to be quite the opposite.
I find everything you need to be a decent day trader contradicts standard human behavior. Daniel Kahneman does a good job illustrating all the inherent biases and limitations of the human mind/decision-making process in his book Thinking, Fast and Slow. TL;DR: you have a fast (intuition) and slow (deliberate) thinking system, and they can cause problems for your decision-making process if you don’t know about them and how to counteract them.
To be an efficient trader, you need knowledge and practice. I don’t think anyone would argue that you don’t need both at certain levels. Then, it would help if you had a combination of monk-like discipline and focus mixed with mental plasticity, open-mindedness, and a solid decision-making framework. You can supplement intestinal fortitude to a certain degree, but you still need to be calculated. That’s a big ask for most people.
Luckily, there are things you can do to stack the odds in your favor. You can develop a trading system (meta-strategy?) to help keep you from taking unnecessary risks. You can also ensure that your brain (the main instrument used for almost everything, trading included) is in good enough condition to make sound decisions. One way to make sure your brain is in good condition is by ensuring your body is in good condition. Finally, we arrive at the point. That’s what I will be discussing in this post: how to optimize the trader.
In this article, I will briefly discuss a few health-related subjects I am interested in improving and provide links to recommended readings or podcasts for deeper dives. You will notice a trend with the podcast recommendations. At the end, I will provide the protocol I will implement for the new year (or sooner).
Cardio and Strength Training
It’s good for us to move and to move heavy things. Heavy being relative to the individual, of course. I could probably write an entire post about the relationship between training and cognitive function. For now, we will leave it at its good for your brain. 123
Recommendations:
Spark: The Revolutionary New Science of Exercise and the Brain
Huberman Lab - Dr. Andy Galpin Guest Series 1-6
Hydration and Electrolytes
I don’t have to track any data to know that I don’t drink enough water. Water is essential to maintaining homeostasis, and electrolytes are vital to transmitting electrical signals in the brain and nervous system. This could have been added to the supplement section, but I thought it was important enough to get its own space.
Recommendations:
How to Optimize Your Water Quality & Intake for Health
Using Salt to Optimize Mental & Physical Performance
Supplementation
Getting everything the human body needs from our routine diet is difficult. While this evidence may be anecdotal, many high-performing individuals (athletes, executives, developers) seem to use supplements at some level. The following supplements are some that interest me as candidates for incorporating into a daily protocol.
Omega Fatty Acids, including EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid), have been studied for their potential benefits on brain health and improved memory function. 4
Multi-vitamins to fill in the gaps left in your diet.
Creatine is one of the most widely studied supplements whose original focus was originally on increasing muscle mass. However, more recent studies on this supplement have shown it to increase brain creatine content and act as a neuroprotective supplement after traumatic brain injury.5
Nootropics, sometimes referred to as “smart drugs,” are supplements designed to improve memory, focus, and cognitive function.6 It’s easy to see why this type of supplementation would be appealing to the trader.
Recommendations:
Developing a Rational Approach to Supplementation for Health & Performance
Deliberate Cold Exposure
If you listen to more than one health or fitness-related podcast (which I do, despite evidence to the contrary), you are bound to run into people talking about deliberate cold exposure and its benefits. It has several positive effects that could benefit physical and mental health.
Recommendations:
Huberman Lab - How to Use Cold & Heat Exposure
New Year Health Protocol
I am a SAHD who works from home. Trying to implement anything extreme or complicated will be a rapid failure. For that reason, I am keeping my protocol easy to accomplish.
TL;DR
Morning ruck or run. If skipped, supplement with a cold shower. M-F
Monitor hydration. Implement electrolyte supplement in the morning first thing with 1L water.
Take vitamins and supplements routinely.
Slow Carb diet with a twist.
Strength training M-F. Rebuild technique and base.
First, wake up early and do something hard, but not too hard, or I won’t do it. So, for this, I am going to give myself two options. Get up before the family and run or ruck. It’s cold this time of year, and I think it’s dark everywhere at 0500 in the morning, and there are black bears. If I want to skip the morning cardio and sleep in (all the way to 0600, woo), I have to take a cold shower. I’ll do this Monday - Friday. This is to prime me for trading and the workday.
I’ll focus on hydrating at wake-up and likely use an electrolyte supplement over plain salt in my water. I will also take the supplements mentioned above. The objective here is to turn it into an automatic habit, something I have forgotten how to do lately.
My diet will be simple. I have had some bloating and GI discomfort recently, so I will use a diet that excludes processed and simple carbohydrates. I have had good experiences in the past using the Slow Carb Diet. The only thing I will change is the cheat day.
I have zero self-control. If there is unhealthy food in the house, I will eat it. My rule will be that I can cheat when eating out. The food that doesn’t fit the diet doesn’t return home with me. We don’t eat out much, so this should be a decent trade-off.
Lastly, strength training. But first, some backstory. My wife tore her meniscus (full buckle tear repair and ACL graft) during our last day at Disney a couple months ago. Add that to the newborn, and everything else that comes with being a SAHD, and suddenly, extracurricular activities such as weightlifting disappeared. I could have harnessed my inner David Goggins and gotten it done, but I didn’t. The storm has passed, and it’s time to get back into the gym.
This will look very simple for me this year. I am going to rebuild a strength base. This means focusing on complex movements such as standard power lifts (squat, bench, deadlift, overhead press) and Olympic lifts. I’m looking to rebuild technique and power. Supplemental work will include core work (think medicine balls and Turkish get-ups) and kettlebell work.
The gym is how I close out my workday. My wife and I will meet there Monday through Friday around 1700 unless there is interference with other plans. Gym sessions will be between 30-60 minutes in length.
Conclusion
I plan on publishing at least one free article a month. As I continue developing my NinjaScript/C# and strategy development skills, many of the free articles will become less code-oriented, like this one. I plan to keep the subject matter trading-related, but I like being creative. Health and fitness play a significant role in many aspects of life, and as a trader, I’m always looking for an edge.
I hope you enjoyed this post. Let me know if you want to see more articles like this that explore ways to improve our performance through healthy living. Remember that these posts represent refined versions of my notes and are plastic. I am always open to correction and suggestions.
Happy Holidays and Happy New Year.