When we think of a “lazy person” we typically imagine someone laying around at home watching TV on the sofa with a bag of potato chips in one hand and a cheap beer in the other. One thing that we almost never associate with a lazy person is success or wealth; in fact we usually imagine them as being poor, dirty and disorganized. However, today I am going to challenge these beliefs because I feel that in our modern society there’s an over-emphasis on doing “more” and being some workaholic control freak who simply lives for their job and little else.
The word “lazy” is often associated with negativity in most social circles, but depending on what you’re being lazy about, it can actually be a good thing. Saying someone is a “lazy person” is usually a gross generalization. You could be an athlete or a super fitness freak, but you might be lazy when it comes to investing, money and business; many people are lazy in some areas of life and the exact opposite in others. There’s nothing wrong with this, and it’s actually quite normal to be lazy at some things in your life. When it comes to trading or investing, it could even be said that being “lazy” or relaxed can actually increase your chances of success.
The lazy trader concept I am using for today’s lesson is simply a metaphor for trading in a manner that is relaxed and unemotional, but the theory behind it makes sense. Remember, I have been doing this for over 10 years and I have witnessed thousands of traders and the different ways they trade; I know what attributes make good traders and being lazy is probably in the top 5 essential attributes in my opinion. Relaxed, stress-free personalities tend to make more money in trading and investing, whereas the serious over-thinkers and obsessively dedicated personalities tend to lose!!!
Lazy traders aren’t glued to their charts all the time
The best traders I know don’t bother analyzing the market or watching their charts all the time. They know they can’t change where the market is headed, so they just set orders/alerts when certain prices are reached or they look at the market in the morning and in the evening briefly. Successful traders take a relaxed and no-stress approach.
The most profitable traders and investors don’t addictively watch their positions all night while they should be sleeping. They make a decision and let the market determine the outcome without interruption or interference. Some might call this “lazy”, I call it “smart” because it works and it’s the foundation of the set and forget mentality that I believe in.
To be a good trader, we almost have to do the opposite of everything that feels “right”. It feels “right” to sit there and watch the markets and watch your trades tick away. But this really accomplishes nothing except making you more likely to do something stupid like enter another position, close your position before it really gets moving, etc. It seems like you need to sit there and “analyze” the market for a long time, and especially after you enter a trade, but you don’t need to do this, actually you really need to do the opposite. Just leave your computer, be “lazy” about your trades and forget about them for a while, this way you really give your trading edge a fair shot to play out.
Lazy traders have bigger winners
How many times have you entered a valid trade setup from the daily chart time frame and then began watching the 4 hour or 1 hour chart after your trade was live? I’ll bet you’ve done this a lot, and I’ll bet it’s led to more than a few occasions where you exited that perfectly good daily chart setup only because you saw the market moving against you on the intra-day charts.
Lazy traders don’t sit there and watch their trades after they are live, thus they are not looking at every up and down move during the intraday session, and thus they eliminate most of the temptation to interfere with their trades. This leads to bigger winners and a higher overall risk reward return over the long run. The reason is simply because they are not being influenced and hypnotized by the short-term fluctuations in price that tend to cause traders to make emotional trading errors. The lazy trader is down at the beach having a beer or spending time with his family, while the obsessed trader is crouched over his computer panicking and stressing over his open positions…which one do you think is more likely to make a stupid emotional trading mistake?
The Lazy trader goes to sleep whilst the obsessed trader is sleep deprived
Lazy traders are relaxed and calm; they get a good night’s sleep and let the market do its thing. When they wake up in the morning they turn on the computer and look at the overnight price action for a few minutes and then carry on with their lives.
The obsessed coffee-addicted trading junkie is sleep deprived because he has been up watching the market until 4a.m. crouched over his trading terminal…he is ultimately creating his own failure by taking trading way too seriously and over thinking every single decision. The longer you sit there and “think” about the markets and your trades, the more likely you are to make a stupid / emotional trading mistake.
Lazy traders develop confidence in their trading ability
One of the things that I see from the emails I get every day is that there are basically two types of traders; those traders who are happy trading around their current job and schedule and those who look at trading as their only option for income and put all their eggs in the trading basket right from the start. What this means is that one trader is starting from a point of no pressure or emotion and another trader is already putting pressure and emotion into the mix before they even make their first trade.
Putting pressure on yourself to make a lot of money from your trading right out of the gate is going to flood your mind and body with emotion and adrenaline which is naturally going to cause you to do stupid things like over-trading and over-leveraging your account. Whereas, if you take a lazy trader approach and just check the market before and after work each day, you will slowly but surely gain confidence and also have better longer-term results since you will have largely eliminated emotion from the mix.
The “true” market picture can easily be seen after analyzing the price action on the charts for just a few minutes at the close of each trading session. (end of day chart analysis). However, when obsessed traders sit there and continue to analyze the market, they inherently make up all kinds of things that “could” happen and they manifest patterns and trade setups that are nothing more than low-probability random price movements. Thus, trading in this obsessive manner works to tear down your confidence as a trader and just makes you frazzled and frustrated in the end. The lazy trader develops a better “gut feel” for the market because he is just looking at what’s there and then moving on, rather than sitting there manifesting different combinations of things that could happen.
Lazy traders develop positive trading habits
The lazy trader flicks open a EURUSD chart, looks for something obvious to trade and either trades or passes on the opportunity. He is not worried about news events or what the media is saying; he is not over-thinking it and he does not care if he enters a trade or not. Trading in this manner develops positive trading habits because you are reinforcing a minimalist trading approach.
I am a minimalist myself and I keep things simple and clean when it comes to trading. I can’t stand being stressed or worried about what the market is doing, I can’t stand the thought of analyzing the market for hours on end, or anything for that matter. I don’t listen to financial news and I don’t over-think what I am doing in the market or in life. I would much rather be relaxing reading a book/magazine or watching a movie or entertaining my 3 year old son.
In fact, I would much prefer to do ANYTHING else but stress out about a trade or a trading decision.
It is often the case that the more serious and obsessed traders typically develop addictive and self-destructive personalities, or they already have these personalities when they start trading and they aren’t willing to change. They actually believe that they can influence or change what the market is going to do by focusing almost their whole life on the markets; however this couldn’t be further from the truth!
The key to lazy trading
Now that we’ve discussed a lot about why being a “lazy trader” can improve your trading, let’s talk about how to actually become a lazy trader…
Simply put, you have to genuinely not care about the outcome of any one trade and you have to eliminate the “itch” to be in the market all the time. The easiest way to really not care if you’re in the market or about the outcome of any one trade is to be sure you are totally OK with the money you are risking per trade and the money you have risked in your trading account. You should only be risking an amount that allows you to forget about the trade, when traders start risking more than they are comfortable with losing per trade they put themselves at a very high risk of becoming over-attached to their trades…and this is not the lazy trader approach, this is the obsessive / addictive approach that never works.
You also have to be confident in your trading edge and your ability to trade it. If you don’t really have a trading strategy or you don’t know what you’re doing, you aren’t going to be confident enough to just glance at the market a couple times a day briefly. Instead, you’re going to sit there for hours trying to manifest a signal simply because you aren’t really sure what you’re looking for in the markets. So, be sure you’ve mastered an effective trading edge like price action strategies and that you fully know how to trade it.
Lazy = better trading and a better life
Me and thousands of my followers who have made the transition to my “keep it simple” and minimalist trading philosophy, know firsthand its immense power. Not only do trading results improve by adopting the “lazy man” trading attitude…our life ultimately becomes less stressed and less cluttered with counter-productive thoughts, and then doors start opening in all areas.
Whether it’s business, trading, relationships or life in general, we often destroy them by trying too hard, doing too much, over-thinking, over-analyzing and simply stressing ourselves or others to death.
Do yourself a favor…start being a lazy trader! If you’re already a lazy trader, good for you! To the people who are not yet converted to “lazy trading tactics”… you need to stop trying so hard, relax and enjoy your life and you may find your trading will actually improve, not to mention your happiness level. It does not have to just be about trading, if you’re in business try removing the stress and stop thinking so much!
Don’t lock yourself in the office or in your trading room and think that the more hours you put in the better the outcome will be, that kind of thinking will destroy you, blow up your trading account and possibly destroy your relationships with others. Your wife/partner will probably notice a huge change in your personality if you make the commitment to be more relaxed.
If anything I have discussed in today’s article has turned on a light bulb in your head…I encourage you to pursue a change in your trading & life. It’s time to undo the damage you have already caused yourself and turn over a new leaf. Some people never wake up to the idea that they should be living a stress-free, relaxed and “lazier” trading life. Hopefully I have “saved” some of you today!
To learn more about my lazy-man’s trading tactics and how to trade stress free and get your life back…do yourself a favor and check out my price action trading course, it’s bound to help.
Good trading, Nial Fuller