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The 90 Day Rule

the 90 day ruleStudies have stated that the human brain requires 90 days to maintain focus. Then you have to hit the reset button.

A Yale University study found that addicts could regain normal brain function after they stopped using for 90 days.

What the studies were concluding is that we need repetition every 90 days to form habits. And yes it could mean both good and bad habits.

So it got me thinking about the 90 day rule and how it could be applied to trading and sticking to our trading plans.

We’ve discussed frequently about how successful traders have a plan or a strategy. One that they stick to without fail.

Yet what happens after the excitement of developing this plan subsides. Is it then sitting in a folder somewhere gathering ‘dust’.

If it is, then how can you be sure that you are not inadvertently applying slight variations to your plan over time? Whether it be consciously or sub consciously. Variations that may have started affecting your performance.

Based on the 90 day rule, the only way you can be sure you are sticking to your plan, is to review it every 90 days. As a bare minimum.

So open up your trading plan folder sitting on your computer desktop. Then read your strategy out loud to yourself. What this will do is reset the strategy back into your mind. It will help ensure the good habits you have worked so hard on, have not been overtaken by bad habits.

Perhaps you have found yourself trading in unfavourable market conditions when your strategy states to stand aside.

Or your risk management may have become loose.

Or maybe over time you’ve strayed from your methodology completely. Fallen into the habit of thinking you can outsmart the markets. You had success with that random trade after all!

Over time we can all find ways to override our systems. Yet this can be tempered significantly if we can apply the 90 day rule.

Keeping the good habits in play, and the bad habits at bay.

So hit the reset button every 90 days. Open your trading plan and take the time to read every word. Then honestly sit back and ask yourself whether you've stuck to the plan. Even read it out to your partner or a close friend for some added accountability.

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