Adrian Reid (Enlightened Stock Trading) advises that traders eliminate stress by limiting the information they use to only what their chosen strategy requires. Using a trend-following example, he argues that if a system depends only on price action, then news, analyst reports, economic data, and company announcements are unnecessary and introduce counterproductive doubt. He recommends identifying the minimal data your strategy needs, turn off extraneous information sources, follow rules with discipline, and notes his own profits and stress reduction after doing so.
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Would you like to know the number one most effective tip to eliminate stress from your trading or investing life? It's Adrian here from Enlightened Stock Trading. And this afternoon I was on a call, coaching call, with someone that I've known for a long, long time who was stressed out about what was happening in their account. Now, the problem was this. They have an investing strategy which is perfectly reasonable and they were adhering to that strategy, but what they were doing was looking at all sorts of things that were going on in the marketplace, all the news and information flow and what was happening in the company and announcements and all that, and also what was happening to the share price. And they were starting to stress out about the position. Should I hold it? Should I not? You know, what should I be doing? Is this bad? Is it going to get any worse? You know, I hope it recovers, but what if it doesn't? All of those sorts of questions. Have you ever asked those questions yourself of any of the positions you're carrying? The thing here is this. Once you have a strategy which is matched to your personality, and we've talked about that before, and, and you know, is profitable, the key thing is to stick to that strategy. So let's say, for example, you have a strategy to follow trends in the marketplace and all you're doing is looking for share prices that are going up and you're holding them and following the price until it stops going higher and starts to go lower and you get out, the only information you need to run that strategy is the price of the share that you're holding. You don't need to know the news, you don't need to know what's happening in the market. You don't need to know about interest rates, you don't need to know about the economy. What. All you need to know is the price move. Now, if you start reading all of that extra information, looking at the news and listening to company announcements and doing research about the competitors and all of that, that's all outside your trading or investing strategy. And all of that information, you can't actually make a decision on it within your trading strategy. So it's pulling you in different directions because you have a strategy which you know works and fits you, except you're adding all of this other information into your mind and into your consideration set, which doesn't actually get used by your trading strategy automatically. What happens is you start second guessing and wondering, well, you know, should I actually take this into account? Is this bad enough in this case, I should, you know, bend my system rules or break my system rules or do something different. So the thing here is this. If you have a strategy, first thing to do is understand exactly what it is that you need to know in order to run that strategy. Second thing is use that information and only that information. So for me, one of the great turning points in my trading career came when I turned off all of the information sources that I didn't need to use. So once I stopped watching the news, once I stopped reading the newspaper, once I stopped looking at magazines and stopped reading analyst reports about the stocks I was holding, all of a sudden my stress totally disappeared because I didn't have all of these extraneous inputs into my mind which. Which would challenge me and causing conflict about what should I do with my positions. All I was doing was following my rules consistently and with discipline. And what do you know it, my profits skyrocketed. How about you? If you have a trading system and you've looked at information outside that trading system, how did it make you feel? Do you still do it? And would you consider eliminating all of the sources of information that you don't need in order to run your trading strategy so that you can eliminate the stress from your trading life? That. That's all for this video. I'll see you in the next one. Don't forget to comment below. Let me know what you think so we can continue the conversation. Bye for now.
