Energy

How Much Mental and Physical Energy Is Your Trading Consuming?

Which do you think is more energy demanding - competing in a multi-day chess tournament or a multi-day bike race?

This very interesting article (https://www.cnbc.com/2019/09/22/chess-grandmasters-lose-weight-burn-calories-during-games.html) looks at the mental demands, and subsequent energy requirements in players competing in elite chess tournaments.

Stanford professor of neurology and neurosurgery has found that a chess grandmaster playing a multi-day tournament could burn up to 6000 calories per day.

As a comparison, riders in the Tour De France, riding on average 110 miles per stage, also burn an average of 6000 calories per day.

Here are a few snippets of interest from the article;

"Your body needs energy to perform all of your daily activities, including using your brain."

"The brain relies heavily on glucose, a form of sugar, to complete functions such as thinking, memory and learning."

"Studies suggest that brain activities account for 20% of the calories utilized by the body."

"The more mentally taxing a task is, the more energy your brain needs to complete it"

"Stress adds another layer to your calorie expenditure. The acute stress that a chess grandmaster might encounter can cause a cascade of physiological changes, such as an increased heart rate and oxygen intake, which would also cause you to use more energy."

This is an interesting article that again highlights the role of the body (physiology) in the performance of mental activities such as chess, poker, trading and investing for example.

Managing Energy For Enhanced Trading Performance

In my work with traders and find managers I have long espoused the importance of managing and training physiology to enhance trading performance. 

Your physiological state impacts both your risk taking, and your decision making, and also your ability to sustain trading performance over time.

Sleep deprivation changes our risk preferences, shifting the focus towards becoming more reward focused, and less focused on the risks being taken to achieve them.

Fatigue increases risk aversion, our proneness to bias and making quick, simple, easy decisions, and increases the risk of error.

Stress, when chronic (sustained), increases our cortisol levels, and shifts our risk preferences towards risk aversion.

The awareness and importance of such physical practices and the impact on trading performance is not new. I once received a copy of Jesse Livermore’s ‘How To Trade In Stocks’ book from a fund manager client who I had conducted a series of physiological assessments with (including whilst being on holiday, and still watching the markets) with a post-it note marking a particular page and paragraph.

“The following rule is a rule I developed from a great trader: Keep stress at bay – act in all ways to keep the mind clear and your judgement correct. I did all I could to achieve this in my physical life by going to bed early, eating and drinking lightly, taking exercise, standing upright at the stock ticker, standing while on the telephone and demanding silence in the office.”

Jesse Livermore, ‘How To Trade In Stocks’

Over the last few years I have spent an increasing amount of my time working on researching and advising traders on how to optimise and train their physiology for enhanced performance.

Three core areas should be considered when looking at manging energy, and enhancing physiology for improving trading performance;

1. Measure and monitor your physiological state - stress, energy, mood, HRV (Heart Rate Variability) readiness scores.

2. Optimise your physiological state on a daily basis - sleep, recovery, nutrition, physical activity, stress v recovery balance

3. Train your physiology for enhanced performance - breath work, meditation, mindfulness; to develop the mind-body connection (interoception)

What action could you take to improve your own trading performance by developing your physiology?

Assessing Energy

In the ‘Traders Mind Journal’ on the ‘Trading Performance Scorecard’ we think about energy as;

“The mind and body work as one when you are taking risk and making decisions. Your physical state impacts your trading performance. Managing energy involves sleeping well, finding time to recover during the day, being physically active, eating healthily, managing stress and nourishing both mind and soul.”

You can check-in on how your energy is by asking the following question, and rating yourself on a 1-5 scale;

“I managed my physical energy well.”

Steve