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Trading Psychology: Why You Need to Take A Nap

Today’s post is going to be a unique article on something rarely discussed in trading – sleep.

As a trader, your success is overly dependent upon your brain being healthy. And one of the primary factors which determines your brain’s health is sleep quality.

Recently Dr. Walker from the UC Berkeley Sleep & Neuroimaging lab began the first neural studies on the emotional brain without sleep. The results were impressive and could be behind why your trading performance is struggling.

Here is how the experiment went:

sleep and emotion 2ndskiesforex

After 1.5 days without proper sleep, the subjects neural activity resembled that of depression & anxiety.


When deprived of proper sleep, the amygdala (triggers fight-flight reactions) goes into hyperdrive.

Below is an image of the difference in neural activity from sleep deprived brains vs. normal sleep (source: UC Berkeley Sleep & Neuroimaging Lab).

brain after sleep deprivation image 1 2ndskiesforex

In the top group (people who got normal amounts of sleep) you can see the green circles. That is the neural activity in the amygdala. Compare that level of activity to the sleep deprived brains below.

The sleep deprived brains had far greater amygdala stimulation vs. those with normal sleep.

Why does this matter for your brain and trading performance?

A highly triggered amygdala cuts off access to your PFC (pre-frontal cortex). You need the PFC because it’s what helps you make logical decisions and remain calm while trading.

No access to the PFC = really bad trading decisions. It means having negative emotional reactions to any winning trade going against you or getting stopped out from a losing trade.

To show how important the PFC is, consider the following scenario:

amygdala and prefrontal cortex activity 2ndskiesforex

Basically you just lost about 10-20 IQ points in <1 second. In other words, you just went from smart to stupid. Good luck trading with stupid!

Ever been incredibly afraid to take a loss but couldn’t explain why? More than likely you were in a fight-or-flight response triggered by your amygdala.

Have you felt paralyzed to make the right decision in trading, even though you ‘knew‘ what to do? You were in a fight-or-flight response.

Even healthy brains showed how they could mimic pathological patterns from sleep deprivation.

In fact clinical evidence shows some form of sleep deprivation is present in almost all psychiatric disorders.

Can you now see how important getting proper sleep is now to your brain and profits?

Sleep Affects Your Positive & Negative Biases

In a correlated experiment by Walker, sleep deprived students tried to memorize a list of words. The words had either a positive or negative connotation.

Subjects who had less sleep than normal (6hrs or less) remembered 81% of the words with a negative connotation. Hence words like ‘cancer‘, ‘anger‘, and ‘pain‘.

How many words with a positive connotation could the same people remember? 31%

Getting less sleep than needed triggers a massive bias in your brain towards the negative.

It means trading on less sleep = noticing what’s wrong, not what’s right with your trading.

It leads to every pip the market moves against you feels ‘threatening’.

It translates to losses triggering negative emotional responses, and not being a part of the game.

How can you expect to trade profitably with this brain and mindset? How can you build a winning trading psychology with this brain and mind?

To hammer the point home, below is another image of sleep deprived brains vs. those who got normal sleep (source: current biology).

brain after sleep deprivation image 2 2ndskiesforex

The first three brains (sleep deprived) show red spots in the center of the brain (more primal functions). Contrast this to the yellow spots (those who got proper sleep). Notice how the location of activity is different (in the front)?

Most of the yellow spots of neural activity are in the pre-frontal cortex. You need the PFC active to trade successfully (image below).

pre frontal cortex for trading 2ndskiesforex

Sleep Debt is Cumulative

One last experiment on how sleep affects your trading performance before I discuss solutions.

At the Univ. of Pennsylvania, researchers got 48 men & women with normal sleep habits (avg. 7-8 hrs per night).

They split these people into 4 groups:

cognitive performance on sleep deprivation 2ndskiesforex

How did they perform?

Group 4 (8hrs of sleep) showed no declines in their cognitive performance, motor skills or attention.

Groups 2 and 3 showed steady declines in all categories each passing day.

Group 2 (4hrs of sleep) obviously performed the worst, however group 3 didn’t do much better.

Hence sleep debt with every passing day has cumulative effects. There is a neurological cost that accumulates in your brain over time.

Group 3 had 25% of their subjects falling asleep randomly throughout the day only after 1 week. By week 2, there performance was so bad, it was as if they had not slept for 2 days.

But to sum up the results from the experiment, let me put it another way:

If you get 6hrs of sleep per night for two weeks, your mental & physical performance = that of not sleeping for 2 days straight!

Below is a great graph showing how many cognitive lapses subjects had based on how little sleep they got over time.

performance lapses from sleep deprivation 2ndskiesforex

Interestingly enough, when the groups had to evaluate their performance, they were off by a mile. They only thought their performance dipped for a few days. In fact it declined every day!

Here’s a great read on how people are really bad at evaluating their own performance.

6 Solutions To Getting More Sleep & A Better Brain

Now that I’ve convinced you (hopefully) how important sleep is for the health of your brain and success in trading, it’s time for solutions.

Below are 6 solutions or tips for getting better sleep and keeping your brain healthy.

#1: Develop A Schedule and Sleep Ritual

As someone who’s struggled with getting proper sleep for 4 decades, the best sleep I ever got in my life was in 2011.

What was so special about 2011?

I was doing a 1 year meditation retreat and had a strict schedule. Out of 365 days that year, I aced that schedule 350 of those days with two weeks of travel responsible for the rest.


By 10.30pm every night, I was asleep (actually asleep, not just in bed). I got up at 6.30am sharp every day for my 7.30 morning practice. And go figure – I never slept better in my entire life.

Hence – develop a sleep ritual and schedule.

What is a key component of a sleep ritual?

-Dis-engaging from your work activities

The last thing you want to do is work up till the moment you fall asleep.

Ever had dreams of being in trades? My guess is you were trading up till the moment you feel asleep.

“What you think about right before sleep can prime your unconscious mind & what you dream about.”

I try to read something positive (about buddhism or meditation) before I fall asleep. This way I’m priming my mind to have conscious healthy activity while sleeping.

Whatever you do, try to clear your head and get into a positive relaxed space before falling asleep.

#2 Be Tired Physically

There is nothing that will help you sleep better than being physically tired. Doing some sort of physically challenging exercise a couple of hours before bed is a great way to sleep well.

Exercise helps do two key things for your sleep:

1) produce neurotransmitters which help your brain relax and

2) primes your body to ‘recover’ and thus sleep deeply

Hence take a yoga class, do martial arts, hit the gym or go for a walk to sleep deeply.

I started taking Wing Chun classes and my body feels better than ever.

(Photo of Ip Man – Founder of Wing Chun training Bruce Lee)


#3 Take A Nap

Europeans and Latin Americans seem to have this down pat. North Americans…not so much.

Trading and work causes stress and cognitive load (CL) on your brain.

Taking a nap will help reduce cognitive load while increasing alertness during your day.

It also prevents burnout, reduces the risk of heart disease and increases sensory perception.

Hence if you can find a way, take a nap.

Here is a picture below of my two cats helping me with such napping activities 🙂

cats napping with chris

#4 Temperature

The body and brain are trying to wind down before sleeping. Hot rooms tend to cause more disturbed sleep.

But cool rooms tend to promote greater sleep.

Ever notice on airplanes how they make it so damn cold? This is to help induce sleep (sleepy passengers = less work for the aircrew).

#5 Skip the Nightcap

Although it sounds sexy to invite the femme fatale in for a night cap, you’ll actually get worse sleep with alcohol in your system.

Alcohol dehydrates the brain and body. This can delay your REM cycle while also causing your adrenaline to spike (alcohol subdues the adrenal glands).

Hence avoid any alcohol (or caffeine) several hours before falling asleep to keep your adrenals relaxed.

#6 Meditation

The science is clear at this point – meditation gives you a better brain.


-strengthens your immune system

-improves neural structure

-slows brain degeneration

-increases IQ

-and raises cognitive performance.

It is also fantastic for falling asleep as it calms your mind.

Below is a great image of your brain before and after meditation.

brain before and after meditation 2ndskiesforex

The brain on the left (before meditation) is one that is overly active and definitely not relaxed.

The brain on the right however is as calm as a zen buffalo.

Click on the link below to learn a meditation practice for trading.

Meditation for Trading – My 15 Years Of Practice

In Conclusion

Your brain is the most dominant variable which determines your success in trading.

One of the most important factors which can affect your brain’s performance is sleep.

Losing a few hours sleep each day has a cumulative effect upon your brain and can literally lower your IQ.

The good thing is you now have 6 techniques which can improve your sleep quality and time.

Hopefully now you can see how important sleep is to your mental well-being and trading performance.

With that being said, are you often emotional or reacting negatively while trading?

What techniques do you use to get some deep sleep?

Make sure to comment and share below.

And if you want to overcome your emotions while trading and improve cognitive performance, make sure to sign up for my Advanced Traders Mindset Course which opens in a few weeks.

30 thoughts on “Trading Psychology: Why You Need to Take A Nap”

  1. Thanks for the help Chris. I really gotta create a strict sleep ritual. I haven’t had enough sleep for more than 2 months now and I definitely feel that accumulative effect of sleep deprivation you mentioned. my athletic performance has dropped for sure, and I’m less calm than I was before.
    It’s time for change !

    1. Yeah, having a strict sleep ritual has always benefited me (especially when I kept it 🙂
      But all kidding aside, the times I felt most stable, healthy and clear was when I had a strict sleep and practice ritual.
      And yes, sleep deficit affects all aspects of our lives, especially athletic performance and mindset. so good that you noticed and are making changes.

  2. Mike van der Marel

    Thank you for the fast reply.
    The reason I ask this is because I know some people who get more then enough sleep but still walk around like zombies during the day.
    I sleep 6 hours, and feel highly energetic.
    That contrast got me thinking.
    So basically, feeling energetic does not mean that the body is well-rested. And this lifestyle will be taxing on the body in the long run.
    The studies don’t lie I agree. I got too caught up with motivational speakers who believe in order to achieve goals in life you have to be willing to sacrifice big, yes even sleep. Work day and night basically.
    Thanks again. Ironically while typing this message I should have been asleep to achieve 7 hours of rest.
    I will do my best to change this habit for my own health. Thanks Chris

    1. Hola Mike,
      Yes getting enough sleep doesn’t mean people won’t have other problems with their energy. It’s not a perfect correlation, but a lack of sleep does affect one’s health and energy over time.
      But am glad to hear you’ll be taking more time for your health as long run, it will pay dividends.

  3. Mike van der Marel

    Hey Chris,
    One question. Do you concur with the statement “Highly motivated people need less sleep”.
    I always sleep 6 hours sometimes less, and i wake up oozing with energy and ready to chase my goals. I start my day working on your APA course with joy every time. I feel like every day that passes brings me closer to my goals hence keep me motivated.
    Even after coming back from work, i still have lots of energy left for FT2 and working on my goals (do my formal study,workout etc). I do pass out the end of the day though, often even dream about price action 😛
    Do you think this is a healthy lifestyle on the long term?
    Greets from Mike!

    1. Hello Mike,
      I don’t think anyone would question my motivation, and I generally have a ton of energy to attack my day…yet I need sleep. We cannot deny the body, or you can do it, but only for so long before it catches up with you. It’s well documented how sleep affects the brain. This is unavoidable.
      But I don’t think 6hrs of sleep is healthy long term. Eventually it will tax your brain, body and organs of resources. And that bill will come due sooner or later. Best to avoid it completely because if you think time is important now…wait until you are unhealthy and how much time it takes to manage that.
      Best to give yourself the best possible chance to succeed and be healthy long term, for without health – none of this matters.

  4. Great Article Chris.Thanks for sharing
    I am a big fan of good sleep.My day depend on the good sleep I have (7 hours) and also waking up early morning (best is 6 o clk) make me feel so energetic,happy etc
    My question is what is the effect of sleep at night vs day time?
    How does this affect the brain?
    So happy to be your student

    1. Good question Jobi.
      Generally sleeping during the day and being awake at night is bad for the brain, body and mind. Your entire body/brain/nervous system has evolved over millions of years and works around a circadian rhythm.
      Going against this affects the brain, it affects the organs and it affects your immune system as well.
      It can be done, but there is cost – and I’m speaking about this from personal experience as I used to trade the london session while living on the west coast. After 6 mos, my body couldn’t take it any more.
      Food for thought.
      Kind Regards,
      Chris Capre

  5. Hi Chris,
    Very interesting article. I notice by myself when i have slept wel i feel a lot move positive in all the things i do, in trading too. When i loose a trade i think, oké, it’s only one trade. But when i slept bad or too short i feel negative and have not so much confidence and have trouble when lost a trade. Maybe an addition to your article: a sleepingroom that have good ventilation (fresh outside-air) is very important for sleeping well.

    1. Hello Ronald,
      Yeah, it’s hard not to feel positive when we’ve had a good rest as our brain and body are good to go and should have strong energy.
      And bad sleep generally = poor rest for the body, organs and brain to reset and replenish the neurotransmitters it needs so good that you noticed.
      Kind Regards,
      Chris Capre

  6. I’ve been strugling with insomnia for some years now, and I have some extra practises extracted from top experts (in addition to the nap):
    • 15min of sunbath 1rst light in the morning, without sunscreen.
    • Don’t eat after 7 (maybe if I’m hungry going to bed, I take a bowl of soup or a glass of warm milk so I’m not hungry either but without filling with food).
    • Wake up early so you can do inner work in the morning, that would prepare you for the day, then you are energic and more efficient in what you do during the day, which leads to better results, wich leads to confidence and general wellness, then go to bed early to repeat. Greater days lead to greater sleep times.
    @Gloria: thanks for the tip on the lavender oil, will try out! 😉

    1. Hello Guillem,
      I feel for you as I had that before.
      Haven’t heard the sunbath one but know all the rest.
      Good stuff and thanks for sharing.

  7. Cats would make such good traders! They veg and nap all day long. They are calm, self-assured and confident and collected. They don’t need any validation from anyone although they do like to be pat occasionally. We can learn a lot from animals and nature. I often use lavender oil and smear it on my bed linen and pillow before I go to sleep. I’m out like a light within 10 min. The next morning I’m relaxed, well rested and ready for a new day. Lavender oil is great for nervous tension and insomnia. It helps me get a very good deep sleep. Hope this helps you sleep strugglers!

    1. HA – cats would make interesting traders if it meant finding fish on the monitors instead of price action setups.
      RE: Lavender Oil
      Yes, very good natural medicine technique as it’s calming to the mind so great share!
      Kind Regards,
      Chris Capre

  8. My sleep is sometimes too deep and I have problems to wake up to prepare for trading….. I usually start meditating before to get up but 4 nights out of 7 is a battle to get up from bed. As for the article is great, thanks Chris

  9. Hi Chris,
    Thanks for the input. I guess I knew the solution just needed an expert opinion to help me drive the point home. I will just have to wait till we get moved to the Philippines to trade the London Open. That will be my regular daylight hours then.
    Thanks again, have a great day & I will adjust my schedule forthwith!!

    1. Hola Stan,
      Glad I could help. I think you’ll find your sleep, brain and mindset improve once you get back on a regular circadian rhythm. And that will lead to better trading since you’ll be in a better state.
      Keep me apprised as I’ll be interested to hear how the change goes.
      Kind Regards,

  10. I can certainly second that point about napping. I’ve done some training on lumosity after a nap and found that I was hitting high scores. I felt very alert, almost like I could learn anything at that point. So definitely.. Power naps are the way forward.

  11. Hi Chris,
    actually I am in the Central time zone. So no on London being in my Normal daylight hr’s. I get up at 1:15a.m. to prepare. I insure 5-51/2 hr’s of sleep.

    1. Hola Stan,
      Ok that probably explains it. Your body has been built over millions of years to run on a normal daylight/circadian cycle of waking and sleeping.
      Getting up at 1.15am disrupts this completely. Yes, the brain can ‘adapt’, but it will always be less than optimal and create long term effects on your brain, body and health.
      I say this from personal experience and training.
      Hence my recommendation would be to switch to a US/daylight trading schedule. My guess is once you do, shortly after adapting, your sleep will improve and you’ll find your self in a better state overall.
      Does this help?
      Kind Regards,

  12. Interesting that this article comes out now….at least for me.
    The past week or so I’ve been having lousy days all around. I’ve been a little anxious and impatient about getting some trades in that I’ve interrupted my sleep to try to be awake “when the action is”.
    Cumulative effects! Wasn’t aware. Back to getting regular sleep…and working on my patience:-)
    Thanks for the article Chris.

    1. Hello Bob,
      Glad the article is relevant to what you are experiencing now.
      Definitely do not interrupt your sleep just for trades. The cumulative effects will cause greater losses and poor health faster than you think.
      So work on building a proper sleep cycle, then trading from there.
      Kind Regards,
      Chris Capre

  13. Hi Chris,
    GREAT Article!!! This is my Primary struggle not only in my trading but life in general. I have an Extremely hard time sleeping more than 5-6 hr’s unless I take meletonin or occasionally a stronger sleep aid. This is due to several injuries a couple pretty severe that make it physically very uncomfortable to lay down longer than that. Trying to find the perfect recliner. I am a Huge fan of naps. I also meditate at least an hr a day as well as binuarals & relaxing video’s before I hit my sleep cycle. I like to trade the London session & have even arranged life to accommodate but do seem to experience sleep deprivation after 2-3 days even with the meditation & religious naps. As much as I hate it I think perhaps I’m fighting a losing battle & should just re-tool & trade the New York session till it dies. Would very much appreciate your thoughts.
    All my best!

    1. Hello Stan,
      Glad you like it amigo.
      Sleep has been a struggle for me to, so we are in the same boat.
      RE: Your Question
      Is the London session during your normal daylight hours, or is the NY session?
      Let me know so I can answer your question.
      Kind Regards,

    1. Hello Wes,
      Thanks for the positive comments – much appreciated as I think this topic deserves a greater discussion.
      Kind Regards,
      Chris Capre

  14. Thank you Chris, it was great article.
    Although most of the time, I can have a tight sleep at nights (6 hours per night) but I always hate to sleep as I’d considered it as a waste of time! But now, I’m convinced that one must have enough sleep every day.
    Have a question regarding your article,
    Do you think one can use meditation as a complementary for sleep , for example 6 hours of sleep +1 hour meditation per day, instead of 7 hours of sleep at night ? Could you explain your opinion about that.
    Thank you

    1. Hello Ilabol,
      Yeah, I’ve struggled with sleep for a long time. Now I’m changing my relationship to it.
      RE: Meditation As Complementary For Sleep
      I think it takes time to build up to this. I think it would be far better to get a full 7+ hours of sleep and fit in your meditation after.
      There is no clarity or insight without a healthy brain.
      Hope this helps.
      Kind Regards,
      Chris Capre

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