How many choices have you made today?
It’s suggested that on average, a person makes an eye-watering 35,000 choices per day.
Assuming that most of us spend 8 hours a day sleeping away in decision-free bliss on cloud nine, that’s over 2,000 decisions per hour that we make.
Maybe that number is even more if you’re actively trading in the markets.
With this in mind, it is to be expected that ‘Decision Fatigue’ can be a real problem faced by traders.
So, what is Decision Fatigue?
Decision fatigue is “the idea that after making many decisions, your ability to make more and more decisions over the course of a day becomes worse,” said Lisa MacLean, MD.
Dr, MacLean is a psychiatrist and member of the American Medical Association and took the time to discuss what patients need to know about decision fatigue in the AMA’s 2021 published series ‘The AMA’s What Doctors Wish Patients Knew™.
“Every day, just in our personal lives, we are making a ton of decisions. And a lot of these decisions you are not consciously making,” she said. For example, “you open the refrigerator door and sometimes the only thing that’s in there is bagels and that’s a pretty easy decision.”
Dr. MacLean went on to say that “by the time the average person goes to bed, they’ve made over 35,000 decisions and all of those decisions take time and energy, and certainly can deplete us.
This is known as decision fatigue, which is a state of mental overload that can impede a person’s ability to continue making decisions.”
“The more decisions you have to make, the more fatigue you develop and the more difficult it can become.”
Feeling like you have brain fog? You might have ‘Decision Fatigue’.
“A person with decision fatigue may feel tired, have brain fog or experience other signs and symptoms of physical or mental fatigue,” says Dr. MacLean
Dr. Maclean goes on to explain “The phenomenon is cumulative so that as the person makes more decisions, they may feel worse or more drained as the day progresses.”
The more choices you have to make, the more it can wear on your brain, and it may cause your brain to look for shortcuts,” she added, noting that “there are four main symptoms: procrastination, impulsivity, avoidance and indecision.”
“You are either putting the decision off until later, making a rash decision based on little evidence, avoiding the decision altogether or battling back and forth between various choices,” said Dr. MacLean. “The psychological effects of decision fatigue can vary, potentially leading to difficulty making the right decisions, impulse buying or other avoidance behaviours.”
“If your brain is worn down, it may cause you to become more reckless with your decision making or not think things through,” she added. It can also “cause you to simply do nothing, which can cause even more problems.”
So what are some ways you can combat decision fatigue?
Experts suggest that there are some simple changes you can make that can help combat decision fatigue, on a daily basis. Some suggestions include:
- Make decisions early in the day. Making decisions requires ‘Mental Energy’ and the “more choices you have to make, the more it can wear on your brain” says Dr MacLean, so it makes sense to make the most important and hardest decisions early in the day. “Research shows that the best time to make decisions is in the morning,” said Dr. MacLean, emphasising that “the morning is when we make the most accurate and thoughtful decisions, and we tend to be more cautious and meticulous.” “We hit a plateau in the afternoon and by evening our decisions may be more impulsive,” she added. “So, definitely don’t make big decisions when you’re tired or hungry.”
- Remove distractions. Distractions like your phone are easy ones to combat. Use inbuilt functionalities like setting up screen time limits, turning off notifications and turning on ‘Do Not Disturb’ or aeroplane mode can take less than 2 minutes to set up.
- Are there ways you can streamline your wardrobe so you have less choices to make in the morning? Steve Jobs and his signature turtle necks are a prime example.
- Take physical breaks each day. Experts suggest that taking a physical break every 50 to 90 minutes from your work or study can help you to de-clutter your mind and feel more focused.
- Streamline your choices. Dr MacLean states that you can “avoid random decision-making by making lists. This way when you are at the grocery store, you don’t have to decide what to buy.” Another example is to “pick your clothes out the night before and automate your decisions by setting up automatic bill paying,” she said. “Even using GPS can help you to easily find your way by not overtaxing your brain.”
- Develop daily routines. When someone can “develop daily routines that put less important tasks on autopilot, it can make a big difference,” said Dr. MacLean. For example, “set your wake-up time and stick to it.” Additionally, “instead of debating about working out or not, make it part of your daily routine,” she said. “And if you like cereal, eat it every day to minimise decisions of what to eat for breakfast.” “By changing your habits and setting up the right routines, you can decrease anxiety and conserve your energy for the decisions that really matter,” she said.
Take an audit of your everyday life.
Are there ways you can set yourself up for a more simplified day?
While we can’t help you with your choice of wardrobe, or remind you to take a break, we can help you simplify your trading with our Trading Plan Tune Up.
This Trading Plan Tune Up has been created based on the underlying principles we teach here at Safety in the Market and we introduce you to the set parameters we teach our students to help identify high Reward to Risk Ratio trades.
Broken down into bite- sized modules, in this three- hour online introductory course, here’s what you’ll learn:
- Why it’s so important to have a Trading Plan and how it will give you the focus, clarity and confidence you need to be able to escalate your trading returns
- We will guide you through the steps to develop your own effective Trading Plan and you’ll be privy to the exact Trading Plan our students use.
- You’ll learn why the Reward to Risk Ratio of your trades is so important, how to calculate it and how to use it to give you the exact entry and exit points of your trades
- You’ll learn how our students aim for, and achieve 10 to 1 or greater returns on their trades – safely, while using the market’s money and protecting their capital.
As an extra bonus,
- we will introduce you to the basics of Price Forecasting (yes it is possible!)
Ready to learn how to trade the Smart Way?
Blog references taken from an article by Sarah Berg. Click to read more.