Sleep is one of the great scientific mysteries. Although scientists understand that humans require sleep on a regular basis they do not fully comprehend why this is the case. Most adults require 7-8 hours of sleep each night in order to have optimal cognitive functioning the following day. Just as important as the “how much” is the “when” with respect to sleep.

Our bodies have a 24-hour “clock”. During this cycle the body has varying levels of hormones and body temperature. Ideally, sleep begins six hours before the body reaches its temperature low point. This corresponds to around 10:00pm. You may have noticed in the past that when you retire at an early hour that you not only will awaken very early but will also feel totally refreshed. This is a result of your sleeping during “optimal” hours.

The two areas that will most likely be impacted to a trader’s detriment due to a lack of optimal sleep are focus and cognitive ability. Short term traders cannot afford to lose their focus during the day. It can very easily be the difference between a positive and negative outcome. I’m sure that most of the experienced traders who are reading this blog can vividly recall times that they missed an entry or exit because of a lapse in concentration simply due to fatigue (or maybe not so vividly).

Cognitive impairment generally slows down our reaction time as traders as we are slower to recognize patterns. These types of handicaps may cause more harm to our bottom line than trading on a slow or unstable trading platform.

Some Sleep Tips For You:

1. Develop a habit of going to sleep each night at a similar time. After awhile you will begin to awake at the same time every day and this will provide you with information on exactly how much sleep you require.
2. If you are a night owl and need to drastically change your sleeping habits I would suggest taking a gradual approach of getting to bed 15-20 minutes earlier each week until you are going to sleep at the desired time.
3. Eat dinner no later than 7:00pm
4. If you are feeling hungry close to bed time try and drink some water instead of breaking out the Ben & Jerry’s
5. Avoid coffee or sugar close to bed time (overall not great at any time but really can interfere with sleep if consumed in the evening)

If none of the above works for you then I guess you can just start trading the Asian markets :).