Get ready for the day ahead

Monday, 25th June 2018 12:02 - by Ranjeet Singh

Putting yourself under duress is not only important but necessary. That’s because the physical body and the mental state of the mind are inextricably linked.

Therefore, and unlike people who like to wake up slowly, have a nice cup of coffee, have a full English breakfast and then ease their way into the day, I am the polar opposite. Yes, I like coffee as much as the next person and I love a full English but before that I want to put myself under intense pressure.

This is counter intuitive to the body because it’s not expecting it, especially first thing in the morning, and if you are really lucky you can even send yourself into ‘shock’. Now this may all sound very daunting but I can assure you that it’s not. By shock I don’t mean that your body is going to be receiving massive electric impulses that are enough to tranquilise a large horse.

‘Shock’ means that the body sends a signal to your brain which in turn creates a ‘state of alert’. This state is the best way to start the day because it means that all of your senses are heightened and you can’t help but be prepared. It’s the state that your body gets into when the adrenalin rushes through the body and endorphins fill your blood cells.

I am no biologist so I can’t explain this phenomenon in medical terms but anybody who has been even for a long run will know that feeling of euphoria when the endorphins are released. It’s a nice feeling and it’s a way for your body to tell you to keep doing it (because it’s good for you).

However, the next step up from there which is where I personally like to put myself are those positions of extreme discomfort where the feeling is not very nice at all – it’s where the survival aspect kicks in. The mind is telling you to stop because the body is under pressure and then at the point it’s just you against you. It’s a lonely place in many ways and you are fighting with yourself. At times it’s horrible.

This may all seem a little odd because why is a trader and investment manager talking about physical discomfort? Well it’s because my best trading days have almost always come from those days where the physical pressure has been high. It’s when my physical state has been pushed that my mental state automatically assumes a new position, one of ‘kill or be killed’. And in the stock market you need that mentality.

Trading is a zero-sum game. For every winner there has to be a loser so you have to be fitter, stronger, and quicker than your competitors. Whatever edge you can get you need to capitalise on it. Waking up early, being more alert, having a better chemical balance – these are the differences between making or losing money in the market.

The reason that these points do not get the recognition that they deserve is because they are not normally noticeable in a rising market. Most things are not noticeable in a rising market because everybody is making money. But when the market falls then that is where it becomes a factor and these ‘small’ variables make a disproportionately large difference.

It’s like the old City saying ‘you don’t know who is swimming naked until the tide goes out’. Swimming naked refers to having unhedged investment positions and so not directly the same thing but essentially it accentuates the same point. In other words, when the tide is in and everything is hunky-dory then one strategy against another doesn’t really matter; everybody is fine. Even if you are naked nobody can see you so it’s fine. The problem is that this gives rise to bad habits, it encourages bad habits. It encourages you to swim naked because you know that nobody can see you.

So, my advice is simply this – get used to following good habits because at some points those good habits will help you. If you know swimming naked is not good for you don’t do it. Who cares if people can’t see you – at some point the tide will go out and everybody will see your crown jewels. If you have no issue with that then you’re fine but if you are like most respectable people you may not want that event to take place.

The other reason people don’t put themselves under duress is because you won’t always see the benefits immediately and probably only when others are suffering; but you shouldn’t confuse that with not receiving immense benefit all of the time. It’s like eating healthy it probably isn’t instantly recognisable but at some point, in the future you will be thankful that you did it.

Trading is as much about psychology as it is about analysis and market research. Sounds crazy doesn’t it? Well it’s true. So, give yourself an edge today and watch it feed into your performance. And if you haven’t already, make sure you put your swimming suit on.

Today’s video is at https://youtu.be/QM9HJmAAi2I

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.