Every environment or culture has a series of unspoken rules. While the written rules are usually given as official guidelines as to the “do's and don'ts” of corporate interaction, often the unspoken rules are learned the hard way.
For instance, take the sport of baseball, which has a detailed rulebook. There are certain customs that must be maintained, or else the league is at risk of letting players take matters into their own hands. One such example would be the home run bat flip. After a home run is hit, happy fans are often exhilarated by a dramatic bat flip, while opposing players take offense.This often leads to words, bench-clearing "discussions," or even the opposing pitcher intentionally throwing at the batter his next time up.
On a more personal level, unspoken rules affect day to day life. One occasion is in an office setting, where employees are hired to work 8:00 - 4:30. However, new employees quickly learn one of the valuable unspoken rules of this office life. The company owner requires employees to be present fifteen minutes before the clock starts and to routinely work 15-20 minutes after the clock stopped without receiving any overtime or comp time. In this example, no direct mention was ever given of such a rule, but it was inferred upon employees.
Anyone who has broken an unspoken rule quickly learns that they are just as crucial as those put in writing.
Likewise, in trading, there are many emphasized rules on an internet search, which usually include items such as risk management. However, today we will take a look at some underemphasized and often unspoken rules of trading, which serve as excellent disciplines, particularly for those who are looking to trade full time.
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Early to Bed
In my years of working with traders who set their own schedules, it has been amazing to observe their varying disciplines. One consistency that I have found of successful traders who work from home is that they still keep hours as though they are going into an office daily. In contrast, one thing I have noted among traders who are less disciplined about their hours, is that they tend to be less successful.
Disciplined traders will make certain to be in bed at a reasonably consistent time and wake up at a scheduled time each day, ensuring they have plenty of rest.
Morning Routine Prior To Trading
As an observer of trading behavior and psychology, I also have noted that a trait of successful traders is that they wake up early enough to carry out a morning routine prior to their “office hours.” Whether you like to grind your own coffee beans, exercise, walk the dog or read the Wall Street Journal, some period of transition between waking up and beginning the trading day is crucial.
Get Out Of Your Pajamas!
This may not seem important at all, but I believe it has an underrated value. When you are ready to begin your trading day, wear comfortable clothes, however, transition from your pajamas into something more suitable. Believe it or not, this is a psychological cue to yourself that you are going into business mode and that you take yourself seriously.
Maintain Sacred Space
This is like rule #3. Trade somewhere other than where you sleep or eat. Furthermore, trade somewhere other than where you intend to relax. Otherwise, if boundaries are not clearly set, then you will find yourself with the tendency to go into relaxation mode while trading, or trying to work during times of relaxation. If at all possible, have a space that is purely devoted to trading. Professional traders understand this, and this is why for many, they rent an office or desk space somewhere.
Keep Office Hours
Once you have your sacred space clearly defined, it becomes your office. Make sure that you arrive and depart there at a consistent time each day. Few traders are able to jump directly to their screens and begin the day’s trading. Instead, it is a vital discipline to arrive at your space early enough to settle in, check any potential electronic problems you might have, read over the news of the day, check price action from when you were asleep and begin to plan for the day. Winning is neither random nor spontaneous, but requires planning and forethought.
Just Another Job
In social settings it can be easy for traders to enjoy something of a celebrity status among friends and family. There might be misconceptions that you are a gambler or a Wall Street playboy. Most often it will be that since you trade a completely different market, you are asked for any hot stock tips, or to make a macro assessment of global economic conditions.
It can be easy to let your trading persona become the life of the party and articulate many interesting stories from your trading day. However, I have found that the most successful long-term traders have found a way to tune out this noise and publicly present themselves as just having another day at the office, whether they made or lost a month’s pay that day.
Over the long-haul, this is very important for your social life; trust me. If your friends and family think you are profiting from big trades, they will ask you to borrow money, give advice, teach them, or even worse, manage money for them.
These are just some of the unspoken but crucial rules for the life of a trader which form, in part, the discipline for longevity in this field.