Thursday Trader's Tip: When Is It a Good Idea to Take a Break in Trading?
Thursday Trader's Tip editions offer quick trading psychology advice that can be digested in 5 minutes.
There are two variables that determine exceptional trading performance:
Capability — the level of knowledge and skill.
Capacity — the level of energy to execute the skill.
Differentiating between both is the difference between getting yourself closer to overcoming an execution problem or digging yourself a bigger hole.
Capacity Vs. Capability in Trading
It doesn’t matter how well you’ve trained; if you try to run a marathon without enough sleep, you simply won’t have the energy to perform your best.
What makes traders want to quit is the belief that they’ve lost their capability to perform. But in reality, they’ve run out of capacity.
This is something I witness too often—traders with crazy schedules, sleeping five hours per night and hopping on the charts waiting to be able to hold insane focus and get the wanted results.
This is why it’s so important to consider trading breaks when necessary.
The consequences of not taking a break when needed? A mental mix of self-doubt, frustration, and disappointment that puts you further in the downward spiral.
Some traders start to think their strategies need fixing and end up adding layers of complexity to the original problem, which only distances them from solving the real issue.
We’ve been taught to push until we reach the next level, but this advice needs to be taken with a grain of salt in trading. Recognizing when your mental conditions aren’t optimal requires humility and a strong sense of self.
So, take this principle with you: You can’t fully leverage your capabilities when running on low capacity. Prioritize taking care of your mind and body.
Recovery Is Part of the Performance
Farmers understand the concept of taking breaks all too well—patience is key in their line of work. They understand that soil has its limits, and continuously planting crops without allowing the land time to recover can strip the soil of vital nutrients.
If they want good fruits and vegetables, they know what they gotta do—step back and give the soil a break. Do they struggle with this? Hell no, there is trust in the process.
Not just the soil needs time to recover.
The market works in cycles, and the price needs to retrace to sustain a long-term upward move. Beyond the external conditions, your mental landscape is also the soil for effective decision-making.
These days, our obsession with productivity can backfire. I encourage you to replace this narrow-minded fixation with your long-term vision.
This will give you the confidence to *follow the process*, and give yourself that break more often, even when it seems you’re taking steps back.
Peaceful trading,
Sara
P.S. This newsletter is an excerpt from the post “When to Take a Break (Not Quit) in Trading.”
Related reads:
🔥🔥