Reader question: you can do it in your sleep?

I received a good question from Nick:

In many of your writings as well as the most recent podcast, you have mentioned looking at charts prior to going to bed. Given that the stock market closes much earlier in the evening, can you please elaborate on some of the benefits and what is happening if we look at charts before going to bed?  Thank you

7350118024_e122fc0b28_o_dHe’s right. This is something I have found myself saying and writing repeatedly. Think about the way we were taught to learn, and the way you’d study, even as an adult, for a big, important test. What would you do? If you were going to be disciplined, you’d probably carve out 2-3 hours every day, and sit down to study with no distractions for the duration of that work period. The problem with this plan is, well, that it’s a really horrible plan.

For one thing, attention and emotional state matters. If you’re studying something and hate it you are wasting your time. Second, we remember beginnings and endings so much better. Think about the beginning and ending of anything–a conversation, a movie, a long trip, a book, a shower–so it stands to reason that you will have your best retention at the beginning and ending of a study session. Personally, if I’m studying on something for hours each day, I’ll work on it until I can begin to feel my attention and energy lagging, and then I’ll take a break.

There’s a point of diminishing returns; you aren’t going to accomplish much in 100 five minute sessions, nor are you likely to return for all 100 of those! However, if you’re working in 20-30 minute “sprints”, which might sometimes be as a short as 10 minutes or sometimes as long as an hour, depending on your focus for that session, you can have multiple sessions throughout the day with very good results. The beginnings and endings of each of these sessions is prime learning real estate, so part of the reason for this is to artificially create those beginnings and endings.

Now, why do it before you go to bed? There seems to be another learning boost if you can do something and then sleep on it. Personally, I find that I dream of the subject if I have reached a saturation point. When I’m learning music, I’ll dream in counterpoint and sometimes have experiences of music that are impossible to bring into waking consciousness–sound as shape, texture, and color. (I have no trace of synesthesia in my waking life, only in dreams sometimes.) When I’m focusing on food, I’ll dream about food, but not as you think–the sizzle of onions in hot fat, the shape of food on a plate. When I started focusing on learning French, I had many nights where I dreamt nonsense babbles of the specific French sounds that are not in English (damn those voyelles arrondies!)

No one knows for sure what’s going on here, but some degree of processing, learning, and consolidation is going on in your sleep. It’s enough of a trigger for me that I know if I do not dream of the subject I am not working hard enough. (For me, the threshold seems to be about 4-6 waking hours spent on the subject.)

So, no, it’s not about seeing what the market has done overnight (though that’s a topic for another post), it’s about your learning and assimilation. You spend a large chunk of your time on this planet asleep, so maybe there’s a way to put some of that time to work for you! Anything you want to learn, spend at least 10-15 minutes before bed focusing on it, and see what happens.

(If you found this post interesting, check out some of my recent podcast episodes that talk about learning, learning theory, and how to be a SuperLearner!)

AdamHGrimes

Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.

This Post Has 2 Comments

  1. Nick

    Great! Thanks Adam! Appreciate you writing a detailed post.

  2. Justin

    Thanks for the post!
    Somewhat related, and you might have just hinted at answering this in the future, but I’ve been curious about your thoughts on showing outside-trading-hours candles on charts. I’ve noticed most your charts do not include them. Is there a significant reason for this or is it just a small personal preference? Do you find the overnight candles to be mostly noise? Do you turn them back on on your charts when you’re looking at them overnight?

    I personally leave them showing but due to this find I need volume showing on all intraday charts to give a quick sense for what part of the day/night the market action is taking place. Wondering if there is a reason to get rid of them.

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