Why Taking Breaks Is Important For Traders

by Olivier on September 20, 2010

Thanks for your patience! It feels good to post again after that rather lengthy break. Here’s a few thoughts on the importance of taking breaks:

What is the most important factor impacting one’s trading performance? You. Everything else is just noise. Put another way, your ‘state of mind’ is something you have to pay attention to. Is your trading going well? Are you in a flow state of mind? Are you nervous, going through an emotional roller coaster? Do you fear missing out only to be paralyzed once you entered a trade and second guessing your every decision? I could go on for hours but I guess it is pretty obvious what my point is. All of the above mentioned are indicators something with your trading is going wrong.

Sometimes there is not much you can do. That’s when the time has come to take a break. I know lots of people have trouble taking some time off because they feel like they are wasting precious time and they might miss out on some great moves. Some even confound taking long breaks with being lazy. As a matter of fact taking breaks as a trader is paramount. Less is often more.

Going to cash and pushing the reset button every now and then is the best way to get back in control. No matter what field you are in, in the long run being rested and balanced usually yields the best results. Talking about ‘the long run’: Trading is a marathon, not a sprint.

On to the markets:

  • Uranium: Still very early in the game. Somehow it feels like the whole sector is gathering strength for a decent move to the upside. Odds for a cyclical Uranium bull market to develop in the not too distant future look decent. The charts will tell. Clues to watch for: 1. If high potential stocks like KIV.V can make new all time highs that would be very bullish. Strong stocks without significant overhead resistance like KIV.V – Kivalliq Energy are very likely to be the first movers and lead the way. 2. Like the rare earth sector in May 2009 I would expect some of the uranium stocks to print gaps to the upside on huge volume. That would signal the start of a new powerful trend to the upside. Let’s see if it happens. 3. A successful test of the weekly MA 30 trending to the upside. Right now the trend strength of the MA 30 is not significant enough. If you buy now you are getting stuff cheaper (in case you are right about predicting the future price development of Uranium) but strong momentum is not on your side. Uranium Stocks Trading Entry Thoughts.

A few changes to my public list tonight will also be related to the Sector Overview Charts. A few examples are:

If you let the market make you feel high or low, you will lose money. – Alexander Elder

My public list with all my charts can be viewed here:

Buenas noches!

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