Tuesday, September 23, 2008

Can Biorhythms Help You in Trading

Biorhythms were used by sport coaches in training programs for athletes competing in the Olympic Games.

When I first learned about biorhythms I was only a teenager. I thought there was some science behind it or at least that's what the sources I consulted then wanted me to believe. The truth be told, though, there is probably very little scientific evidence to support the idea of biorhythms, but a quarter of a century later, I still consult biorhythms, even if I should know it better by now. Yes, I do consult them because I have noticed that there is a good deal of positive correlation between my mood and mental acuity and my emotional cycle.

And to some extent also between my energy levels and my physical cycle or my mental prowess and my intelligence cycle, though I seem to be mostly affected by the 28 day (practically monthly) emotional cycle. There are times when I really cannot understand or explain why I am feeling particularly lousy or sappy on a given day as there seems to be no good external or any apparent internal reason for that. On a day like that I usually check my biorhythms and more often than not I am presented with a plausible explanation: I am either close or I just entered a critical day or my cycles are indicating a bearish phase, meaning I am down. And so perhaps the best I can do at a time like that is to prevent myself from starting to dig in this hole. Let's just relax a bit, it's not likely that I am going to get done a lot today, anyway.

Biorhythms were used by sport coaches in training programs for athletes competing in the Olympic Games. Soccer coaches found biorhythms useful for selecting and training players. In the last 10 or so years, the idea of biorhythms seems to have been discredited. The statistical studies once supporting this idea, have been found wanting and nowadays this idea is considered to belong to the same realm of scientific validity as astrology.

Should we thus totally reject it as bogus? Personally, I believe that would be unwise. Cycles do exist in nature, the most known of them being the annual one related to the Sun and the monthly cycle that has the Moon as its basis. It is well known that different seasons have different influence on humans. In particular, during the winter time we are more prone to depression when during the months when the Sun stays longer above the horizon. The monthly cycle is related to the menstrual activity in females, for instance, but may have also other effects, less pronounced. The fact the all the biorhythmic cycles have been found to be relatively close to the monthly cycle of about 28-30 days should probably not come as a surprise. This probably reflects the fact that the monthly cycle is real.

So how should we approach this issue from the practical point of view and, in particular, from the point of view of a daytrader? Well, first start by monitoring your moods and mental acuity. Whenever, you feel subpar and cannot find a rational explanation for your poor intellectual performance or lousy mood, see if this coincides with a critical day in the emotional cycle, the one that is closest to the monthly cycle and which I personally have found to be of the greatest influence on me. Or perhaps you are very deep in the negative zone of the emotional cycle, close to the bottom. If you notice such correlations, you may want to take them more seriously and simply try to take it easier and be more cautious in your work or your trading when you are experiencing one of those down periods.

It's hard to keep working at the same strength and pace all the time, so use the periods when you feel slower, less psychically, mentally or physically fit to regenerate your energy. This will serve you well in the long run whether your main occupation is that of an emini daytrader, teacher or nurse.


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