Is Day Trading Hard Work?

Is day trading hard work? is a question that reached me last weekend. My immediate thought was, “No,” shortly followed by, “Yes,” then, “Well, maybe…”

The reason for my initial indecision was because the answer is dependent on what we mean by hard work.

Last year, Mrs Walsh decided it was time to sort out our driveway. It’s been a muddy mess for more years than I like to think about. In the summer it’s quite picturesque, with wild flowers bringing colour and scent to the borders. Unfortunately those flowers and the weeds that accompany them, live up to the wild in their name. They unfailingly bid to take over then entire driveway, which means getting the strimmer out on a weekly basis to keep them at bay. When winter arrives, bringing rain and other equally unpleasant forms of precipitation, the whole thing transforms into something resembling a rally circuit. Yuck. Something had to be done.

Not Normal

Normal people would probably get someone in to do a job like that, but Mrs W. and I have always been of the view that if you want a job doing properly, do it yourself. Plus we’re cheapskates and don’t like paying someone to do something we’re perfectly capable of. Besides, all the local companies around here are booked up about a year in advance, so getting someone in wasn’t an option anyway. The solution was obvious. Mrs W. and I dug out foundations, mixed and poured concrete, and hand built retaining walls that we rendered and backfilled. Then we dug out hundreds of square metres of dirt and laid and compacted somewhere in the region of sixty tonnes (metric) of gravel in a couple of layers. There was some drainage work and some other tangentially related tasks too. It took months (we didn’t work on it full time!) Our backs ached, our arms almost fell off at one point, and we sweated enough to fill the new pond we dug out while we were at it. It was hard work.

Slow Days

I sometimes think about that mammoth job when I’m sitting in front of a screen on a slow trading day. Perhaps you know the sort, the ones where it feels like everyone else in the market must have gone on vacation? Nothing’s moving, and you’re endlessly scanning your charts waiting for one of them to show a flicker of life. On those (happily quite rare) days, I sometimes find myself thinking “It’s hard, today”. It’s at that moment that I recall the driveway. I think about how many tonnes of earth, concrete, block work and gravel I moved, and I compare that memory to my current situation, seated in front of a computer, in a comfy chair, in a nice climate-controlled room in my house. And I realise of course that trading is about as far from hard work as you can get.

But then again…

Perhaps there is more than one kind of hard.

It’s All In The Mind

There’s something about physical labour that frees the mind. When we were building retaining walls in the baking sun, sure our limbs protested at the unusual effort, but mentally it was easy. Apart from a day spent planning the site and calculating the required materials, and another spent measuring and marking everything out, it was a mindless task. We could build all day whilst chatting, listening to the radio or podcasts, or just happily humming to ourselves. When we were done of an evening, we were done. The driveway left our minds and didn’t re-enter them until the next day on-site.

Trading isn’t like that. It requires intense mental focus, sometimes for hours at a time. Personally, as anyone who’s read my books knows, I tend not to actually trade for more than a couple of hours on any given day. Mainly because I’m lazy, but also because it’s hard to keep that kind of focus for much longer. The minute our mind begins to wander, we are at risk of missing a great trade setup. And if we are already in a trade, then we risk missing the best exit.

Head Stuff

And then there’s the other mental aspect — the head stuff — the execution of trades. We all know that knowing when to pull the trigger on a trade is one thing, but doing it when money is on the line can be quite another. Overcoming our demons (principally fear and greed) and doing what needs to be done without a moment’s hesitation can be hard work. There are plenty of effective techniques to help, but they require practice and constant application. We must always be ‘on it’, monitoring ourselves, checking ourselves, evaluating ourselves. The minute we become complacent, the second we think we’ve got it cracked and can take our eye off the ball, the market bites us hard to remind us who’s boss.

Its All Relative

The requirement for constant attention sounds daunting, but it’s all relative. I don’t know any brain surgeons personally, but I’ve seen enough hospital documentaries to know that they regularly spend five hours or more at a time performing death-defying surgery. Last year a friend had a small brain hemorrhage and was in surgery for six hours. That’s proper concentration. If we as traders screw up, the worst that can happen is we lose some money (admittedly quite a lot of money if we screw up really badly). If a brain surgeon makes a mistake, just for a second in a six-hour operation, they could kill their patient, or turn them into a vegetable.

In fact, the more I thought about the original question, the more I realised just what an easy life we traders have compared to other professions. I’d rather spend a couple of hours trading than stand in front of a class of uninterested adolescents and try to get them to pay attention to a meticulously prepared lesson. Teachers, unlike brain surgeons, do not hold lives in their hands on a second-by-second basis, but they are at least partly responsible for the future lives of their charges. And for their trouble they are paid a relative pittance, though I imagine the job satisfaction is immense.

Engineers spend their days making complicated calculations that, if wrong, could see bridges collapse or planes fall out of the sky. Speaking of planes, air traffic controllers work shifts of two hours maximum at a time, pushing their brains hard as they juggle aircraft in three dimensional space, making split second decisions. A mistake could lead to the sort of catastrophe that would make headlines around the world. That’s hard work.

Hard? Easy?

So is day trading hard work? Yes. And no. It’s easy to learn — you can get the basics inside a week. And sitting in a comfy chair in the location of your choice is not physically demanding. Yet maintaining the focus and discipline required to succeed is not something everyone is capable of. So perhaps the answer is that it depends on the personality of the trader.

Ultimately though, when I think about building driveways, or performing open heart surgery, or standing in front of a class, or making arguments in court that could determine if a client spends the rest of their life in prison, or about a hundred other professions, I can only conclude that day trading is easier.