I’m a huge Sherlock Holmes fan.
The stand-out quality I admire about Holmes, apart from his mastery in observation and deduction, is his ability to switch off.
In the midst of the most engrossing case, Holmes will switch off for half a day or more, and will visit the museum, or will play the violin. While having switched off, there will not be a single thought on his mind concerning the ongoing investigation. He will be fully and totally involved in the recreational activity. Of course he switches off at a juncture where he knows that nothing of consequence is happening for the next so many hours, but that’s not the point.
The ability to switch off is a huge asset to the trader. It allows the trader’s mind and body to recuperate. Also, it does away with overtrading. If a position is showing good profit, the trader who installs a trailing stop, and then switches off, opens the window for still larger profits.
At many times, one is distracted. It is potentially dangerous to trade while distracted, just as it is dangerous to drive while communicating on the cellphone. While distracted, the trader needs to switch off. As long as it takes. Till the source of distraction is nullified, at least in the trader’s mind.
Just a minute, forget about the trader. Investors need to be experts at switching off too, after having entered into an investment. If they don’t have this ability, they’ll be thinking about their investment day in, night out, for years at a stretch. The investment will eat into their life. If we’re looking at the average investor with 10 to 20 investments and without the ability to switch off, we’re also looking at a mental and emotional wreck.
Traders and investors both need to learn how to switch off from Sherlock Holmes.