"Does anybody drink while they trade to calm their nerves? Thereby removing emotions from the business. We all know that emotions have no place in trading. I'm not talking about getting waxed, just a few drinks throughout the day."
"I am considering taking one shot of alcohol (and one shot only) at 9am to get ready for the opening hour. I find that one drink and I am at my optimal but have never actually tried this for the purposes of trading. I think it may help me take the edge off and focus. Anymore than one shot and I think it will be counterproductive."
These were the comments I received a few weeks ago from Desmond (London). Since I thought this might be of interest to our readers I'm publishing the answer here:
In a nutshell - Trading and Drinking don't mix.
Like any drug you will need more and more to get the same effect over time, before you know it you'll need several drinks just to take off the edge and lay a trade.
No one starts out with drinking a pint of their favorite beverage to "take the edge off". It always starts with just one, and you know what, it works. It works so well you'll find yourself doing it every morning. It works so well for one situation, you'll find it works for others as well. You'll apply your new found life strategy all through the day.
Then one day you'll wake up to find that what was once a choice has now become a requirement. At that very moment you're done, but you won't realize it. You'll continue to feed the beast and the beast will own your every thought. And the beast will be hungry and it'll be REAL hungry sooner than you think.
If I had a buck for every time I've heard/spoken this story I would have reached Major Moolah decades ago.
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Catching any of this great downside action? Plenty of opportunities to double your pleasure to downside, if you were so inclined...
Can you still tell the difference between UP and DOWN when you're drinking and trading?!?
Yeah, I know that sounds facetious, but it isn't. Most good traders use something called self-talk to discipline themselves and reinforce their trading methodology to their subconscious.
If you're in an inebriated state of mind when you're doing this, the results probably would not be so good.
But I could be wrong (I can't imagine I am though).
Putting it in another perspective if you lack the discipline to even control your emotions whilst trading what makes you think you can control the demon of alcohol??
How you feel in everyday life can motivate you to make changes. If you feel like your life sucks, for example, you feel that way to motivate you to make it not suck. I realize it is not always easy to change and for some things there may not even be a reasonable action you can do to fix your problems. However, by taking pills or drinking aren't you just tricking the body to not give you the bad feelings? Don't the underlying problems in your life still exist?
Also, when you take the drugs or when you drink, you become another person. You're not really your natural self anymore, you're you on drugs. It's like if I drink beer all day, the way I act would not be my natural self. I would be my natural self under the influence of alcohol. When you take antidepressants, it literally is being on drugs all day (unless of course prescribed by a doctor to control a chemical imbalance).
Alcohol? I would have thought a shot of something else suited you more...
Early one morning, while making the rounds,
I took a shot of cocaine and I shot my woman down,
I went right home and I went to bed,
I stuck that lovin 44 beneath my head...
Got up next mornin' and I grabbed that gun
Took a shot of cocaine and away I run
Made a good run but I ran too slow
They overtook me down in Juarez, Mexico
Late in the hot joints takin' the pills
In walked the sheriff from Jericho Hill
He said Willy Lee your name is not Jack Brown
You're the dirty hack that shot your woman down
Said yes, oh yes my name is Willy Lee
If you've got the warrant just a-read it to me
Shot her down because she made me slow
I thought I was her daddy but she had five more
When I was arrested I was dressed in #000
They put me on a train and they took me back
Had no friend for to go my bail
They slapped my dried up carcass in that county jail
Early next mornin' bout a half past nine
I spied the sheriff coming down the line
Ah, and he coughed as he cleared his throat
He said come on you dirty hack into that district court
Into the courtroom my trial began
Where I was handled by twelve honest men
Just before the jury started out
I saw the little judge commence to look about
In about five minutes in walked the man
Holding the verdict in his right hand
The verdict read murder in the first degree
I hollered Lawdy Lawdy, have a mercy on me
The judge he smiled as he picked up his pen
99 years in the Folsom pen
99 years underneath that ground
I can't forget the day I shot that bad bitch down
Come on you've gotta listen unto me
Lay off that whiskey and let that cocaine be
Cocaine Blues - Here's a link to Johnny Cash singing it.
I don't think there's any such thing as innate willpower. If you look at people who have amazing "willpower"/discipline in one area, often they are incredibly undisciplined in other areas. Many billionaires are fat and can't diet. Some great athletes have a drink problem and can't stop. World class entertainers hooked on drugs. Artists who can't quit smoking.
Have you ever seen a child who was naturally disciplined without any upbringing to create that behaviour? Clearly there is no such thing as inherent discipline.
In essence discipline is the habit of doing productive work, and avoiding the temptation to indulge in short-term gratification instead.
Anyone who has started exercising, dieting, giving up smoking or drinking etc will tell you that it's hardest at the start, and becomes easier as you do it for longer and longer. The reason is that habitual behaviour is easy to do, it requires little energy, you can do it without thinking. Non-habitual behaviour is difficult - you forget about it a lot, you procrastinate, when you realize you should do it then often you don't feel like it, and when you do get down to it, it's easy to become distracted or bored and stop early.
I think the way to achieve discipline is to clearly define the steps, time, and effort needed to make the behavior a habit. Your goal should not be to lose 20kg, but rather to make eating more healthily a habit. The latter is a much easier goal than the former.
The same way, instead of saying "I am going to become a millionaire through trading", you should say "I'm going to make it a habit to follow the steps necessary to trade well" (assuming you know what they are - limit risk, maximize market experience/research to find legitimate edges, then test and implement them as rigorously as possible). I've never found that affirmations made much of a difference to my Profit and Losee. But the times when I was getting into work at 6.30 am every day, or taking time out to do research on methods after the market close, definitely paid dividends.