Focus Will Make or Break Your Day Trading Career

focus and concentration when day trading
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The ability to focus--concentrating on one thing and not being distracted or yielding to the compulsion to act when it isn't necessary--is required if you want to be a successful day trader. Below you'll learn ways to improve your trading focus and/or accommodate for your lack of focus.

Why Focus Is Important In Day Trading

As a day trader, your goal is to implement one to two strategies perfectly. It's an error to believe that once you know a strategy trading will be easy.

Nope. Day trading is a challenge every day because no two days are exactly alike.

Yes, you're looking for the same trade setup(s) all the time, but the context surrounding those trade setups is always a bit different. One day you have an uptrend most of the day, another day is mostly downtrending; there are volatile days and calm days, ranging days and days with lots of false breakouts. Even if you know a strategy very well you need to focus during the trading session in order to execute the strategy properly, in real-time, as opportunities occur (as well as keep yourself from trading when opportunities aren't present).

Improving Your Concentration and Focus

Day traders only need to trade for about two hours per day. More than that and you become more prone to making mistakes. But even staying focused for two hours is difficult for most people.

Close your eyes and only think about only one thing--say ice cream--for three minutes.

Can you do it? Most find it difficult. The mind constantly wanders to other things. If that happens while you are at a critical moment in a trade it could mean missing the trade, missing an exit on a winning or losing trade, or making a mistake such inputting the wrong price or position size. Such mistakes could result in major financial damage.

The eventual goal is to reach a level where you can stay focused for two hours. That will take time, ​though, and lots of practice. Yes, practice. Here's how to practice focusing.

Once you've learned a strategy, open a demo day trading account. Your goal is to focus only on the market and how it relates to your strategy, in real-time. Focus on questions (and answers) like:

  • What does the market have to do to cause me enter a trade (per my strategy)?
  • How will I exit that trade if I end up getting into it (per my strategy)?
  • What market conditions would nullify the trade?
  • What are market conditions like, and how will that affect a trade (entry, exits, risk management, position size)?
  • Is there any economic or asset-specific news coming out that affects the asset during my trade time frame?
  • What could the price do while I am in a trade that may cause you distress? How will I deal with that in order to stick to my strategy?

On the first day, your goal is to focus on these questions/answers for one minute. Then take a few minute break. Then come back and focus for another minute. Take a break, and continue this process until you can no longer maintain your focus for one minute.

Then next day try focusing on these questions, and answering them, for two minutes.

Take a break, and then do another two minutes. Repeat the process until you can't hold your focus for two minutes.

As soon as you can't hold your focus for the prescribed time, stop practicing. Once you start to lose focus you may begin doing random things--impulsive, undisciplined things--and that may lead to bad habits.

Continue this process each day, increasing the time you must stay focused for. Continue to do this until you can stay focused on the market for 45 minutes straight.

Accommodating Lack of Focus

Even during an active trading session, with lots of potential trades, not every moment is pivotal.

As soon as you sit down at your trading platform get yourself into a focused state. Ask yourself questions about real-time market conditions, and how you will implement your strategy in those conditions.

If you realize it will be a while before your strategy gives you a trading opportunity, stand up and walk around. No point being totally focused and wasting energy on concentrating when there's no potential payoff (a trade). As the price approaches a potential trade area, sit back down and get back into your focused state.

Allow your focus to lapse when there are no trading opportunities. This gives your mind a break. You will need to be paying some attention to the market, though, as you will need to get back into your focused state a couple minutes before any potential trades come your way.

If you can focus for 45 minutes then you should be able to handle even a very active trading session which throws a constant flurry of activity at you (see: How Often to Day Trade). Needing to maintain focus for 45 minutes or more, without a few minutes to stand up and take a break, is quite rare. Typically I find I need to maintain focus for about 15 to 30 minutes, then I can take a few minute break. This process repeats throughout the day, until I have day traded my full two hours.

If you are ever trading and feel you can't focus, stop trading. There is always another day to day trade; if you're unfocused, don't trade, period.

Final Word on Day Trading Focus

Focus is crucial if you want to be a successful day trader. Knowing a strategy isn't enough. Focus is required to be able to implement that strategy in real-time, in market conditions that look a little bit (or a lot) different each day.

Ideally, you'll want to maintain your focus for two hours, but work up to it. Practice holding your focus for one minute, then two, then three, and so on. Once you can focus for 45 minutes at a time you are ready to day trade, because each trading day provides opportunities where you can stand up and give your mind a break when there are lulls in the trading action. As the price creeps toward your trade areas, though, get back into your focused state and stay in that state until the market gives you another lull in the action or you are done for the day.