Four Ways to Become an Efficient Trader
This column was originally published on RealMoney on May 30 at 11:33 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
On Tuesday, I mentioned the difficulty of using time efficiently when doing market research. If you are an inherently curious individual (as many traders and investors are), then doing research on the Internet is tantamount to telling a kid in a toy store that he can only play with one toy. It's just not going to happen.
Because time is so precious, it's extremely important to remain focused when you are doing your homework. Jim Cramer often preaches that each stock in your portfolio requires one hour of homework each week. But if you aren't efficient, that one hour can easily turn into two. Pretty soon, your little portfolio management project has become a full-time job.
While I still have a tendency to get distracted during long days in front of the monitors, here are some techniques I use to minimize distractions and maximize my work efficiency.
- Write a checklist of all of your tasks, including an estimate of the time it will take to complete each task. This is your "shopping list" for the day or evening and will help ensure that you do everything you need to. By following a list with a time element, you'll find it easier to stay on task.
- When you start each new task, write it down on a Post-It, along with the time of day that you started the task. Stick that Post-It on the side of your monitor where it is always in view. That little visual reminder does wonders. If you are like me, you'll become much more conscious of straying from your work when you've got something staring back at you all the time.
- Take periodic breaks away from your desk. Surfing the Web does not count as a break -- that's just you not taking care of business. Instead, do something else. Go for a walk, give your spouse or children a hug and chat for a minute, do the dishes or take out the garbage. A quick five-minute break will do wonders for your concentration because you'll return to your work refreshed.
- Set a "drop dead" time when work must stop. Be true to that deadline and never work longer than the time allotted. Adhere to this stringent rule, and you'll avoid sitting at your computer for countless hours, working hard, but never really accomplishing much.
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