Trading Coach: Take a brain break

Tue Nov 20, 2012

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Decision fatigue is real, says Denise Shull.

Denise at the Absolute Return Symposium.
(Photo: Axel Depeux)


For practically my whole trading career, I have been spot-on early in the morning. I can practically print money from 6-10am. Unfortunately, I seem to forget how after about 11am. I've never been able to figure this out and have tried everything. The CIO here won't hear of letting me go home it would set a bad example. But what is the point? I obviously trash not only my own P&L but the firm's, too. He just keeps telling me to figure out what I do differently but I swear I do the same things they just don't work in the afternoon.

--Bass-ackwards in the afternoon

Dear Bass:

You are absolutely right! This makes NO sense!

Actually you are only proving what neuroscience is teaching us about how to better use our brains. Decision fatigue is real. Brains use A LOT of energy relative to the body. Our thinking muscles do truly get tired. The first sign is being at least metaphorically blind to risk. It isn't that you see it and take the risk anyway as much as you don't see it and then ask "What the hell was I thinking?"

It is also true that our brains are much more intimately connected to our bodies than we have thought. Can you at least get away from the screen (brain break) and get some exercise? Ideally this would be real exercise in the gym but even walking at a respectable clip should help.

Third, a screen trick that will help reduce the rate of energy loss is to get rid of all of the red . Your brain reacts more quickly to it (on an unconscious level) and that drains more energy. Every trader or PM who has gotten over the resistance to using, say, blue and yellow coloring (instead of red and green), has reported how much less uptight they feel at the end of the day.

Neuroeconomists call this whole thing ego-depletion. No one can explain the exact biology of how the brain gets tired but we know that it does. Any and everything you can do to give it a break and convince your CIO to support that will raise your returns.


Readers are invited to write to trading coach Denise Shull, a recognized expert in risk psychology and author of Market Mind Games. Send questions to

See also: Newly-minted PM asks "What's the point?" -  Avoiding afternoon impotence -  When the shadow boxes back - Trading Coach: Maybe your problem is you

ISSN: 2151-1845 / CDC10004H

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