Taking time off is such a good idea. I am feeling much better.

Why was I feeling bad? Partly irrational fear of losing — losing is perfectly normal and indeed bound to happen all the time. And partly the distraction of trading systems — the fact that it is hard to make a technical system that makes any money knocked my confidence. This is silly, for three reasons:

  1. My trading is not just based on technicals — I need to understand what is going on as well.
  2. People can see patterns that machines can’t — such as breakouts from a strong resistance level. This is a key difference between me and any system I create. 
  3. I have made money.
I have also been feeling out of touch. I have got good at filtering signal from noise, but it means that suffering the noise feels pointless. Can I be bothered to read any more about the election? Person A says “Yah-Boo” to person B, again.
The fact is, however, that it is necessary to read, and to read a lot, to understand what is going on. The more you read, the less will feel important, and the more you will feel you are reading things that you already know. It’s still a damn sight more interesting than a job that hardly changes or, worse, scholarship (delight in the minutiae of what you already know). I am feeling less confident partly because I have not been reading as much as usual, so I don’t feel I know what is going on.
A solution to this problem is to change the routine. I experimented for a while with reading the FT and Bloomberg in the afternoon, and more interesting research in the morning. I gave it up because I felt I wanted to know what was in the FT early in the day — but that is actually only true of the three pages at the back of the C&M section. Afternoons are useless time, and therefore a good time to dally about reading the paper — and if you are dallying, you don’t mind whether what you read seems useful.
Another part of not knowing what is going on is that I can avoid the markets altogether if I have no positions on, and my morning market review has become a mechanical exercise in looking for trading signals and not what it should be, which is an exercise in understanding the relationships between the markets that are moving. To help with this, I have made a monitor page in TradeStation that shows all my main markets on one screen, so that I can look at them through the day and think about what they are doing. Here is a screenshot: