Getting Paid to Rest

Imagine getting paid to take a week off? This is a luxury many salaried employees benefit from, but as traders and poker players, working for yourself, you don’t get paid unless you show up. Or do you?

Think about the times when you’re well-rested and performing great – your mind is clear and you make better decisions. The better the decisions you make, the better you perform, and your confidence is more solid.

On the flip side, you perform worse when you’re fatigued and trending towards burnout, or already burned out to some degree. The question is, how much does this reduced performance impact your bottom line? 

For most of the poker players and traders I work with, their edge is significantly larger when they’re well-rested vs. times when they’re tired/burned out, and that it feels like they get paid to take time off. 

This may be hard for you to estimate and the gap could be modest, but I’d still suggest keeping an eye on this to provide the extra justification to keep yourself sharp.

To be clear, I’m not suggesting that you should only trade or play poker when you are feeling perfect. But there is a definite range within which you can tolerate pushing yourself and when it’s gone too far. 

Generally speaking, I think too many of you tolerate being in the bottom end of that range, where your energy has fallen off significantly, and the cost that has on your profitability, over time, proves that you can make money by taking time off. 

I know this can be hard to justify. Taking time off can be challenging for any high performer, but traders and poker players have it particularly tough because it seems like you are only paid when you are there. (This is certainly true in poker, and while swing traders may have a little more flexibility because they don’t need to be glued to their screens, day traders generally only make money when they’re paying close attention to the markets.)

The markets and tables are always active and they simply don’t care if you need a break. Because of that reality, taking time off can feel like you are being lazy. It can be hard to rationalize why it’s worth it and, as a result, you end up burning both ends of the candle. You also need to take into account that the precision of the decisions you make on a daily basis make the execution of your roles more akin to those of professional athletes than those in traditional 9-to-5 roles. Plus, when you are risking your own money or struggling with a drawdown, the constant stress can burn you out more quickly.

The end result is that you keep going so you don’t miss out on opportunities, but skipping rest actually costs you in another way. When you think about the benefits of being well rested vs. the cost of the poor decisions you make when you aren’t, you can define that line where you make money from taking time off. 

 

The Cost of Not Resting is Larger Than You Think

If you need some data on this, calculate/estimate what a week of sub-par performance looks like for you – for example, being a little mentally foggy, less able to handle emotions and more easily distracted. What does your profitability look like on average during those weeks? Then compare that to the value generated on a week when you are fully rested and assess the gap.

My prediction is that it will be significant. If by resting you can increase the likelihood of that good week, you’ve raised your performance by some measure and you can see that it literally pays to rest.

If the direct financial cost doesn’t help to motivate you to at least look closely at how you’re managing your time off, also consider the cost to your learning. 

When you are working so hard on aspects of your technique or new skills, the consolidation of that learning occurs when you are resting. That can’t happen when you are actively working at applying it, so without that rest period, the knowledge and skills are not consolidated. After rest, however, applying those new skills should be a little easier.

In contrast, when you’re fatigued, you have less access to things you’ve been learning more recently and risk failing to apply them. Operating from your B or C-game slows your learning, including mentally and emotionally. 

Think about it – when you’re tired, or burnt out, your emotions get bigger while your ability to deal with them is more limited. In a weakened state, you lack the strength, clarity, and poise to execute well and make progress.

So as the northern hemisphere gets into summer, it’s a good time to be reminded not just of the value of rest, but to firmly embrace the idea that as professionals who are paid on their performance, it pays to rest.

 

Taking Breaks

For some of you, the benefits of rest can come just from a better daily process. You don’t have to take bigger chunks of time off. Maybe you aren’t getting enough sleep, not doing enough non-poker/trading activities, or are always engaged in highly stimulating activities that prevent your mind from really getting a break at all. Reprioritize rest with “getting enough” measured by the energy you bring to play poker or trade.

For others, you have a great daily routine, but the consequence is that your energy output is so high that you need more rest weekly, monthly or quarterly. My general recommendation is that once a month you should take 3 days off in a row (essentially a “long weekend”) and once a quarter you should aim to take 5-7 days off in a row.

I know a lot of the traders out there will especially hate that last part and I recognize that 4 weeks off a year is laughable in the institutional space. But the performance element of this is sometimes hard to calculate until you are on the other side. Experiment with something that’s practical, given the way trading/poker is constructed for you, while also giving yourself a true opportunity to rest. Try taking a couple of days off just to see how you feel and gauge the impact on your bottom line. 

For those of you who can’t take time off because of current circumstances or the way trading/poker is structured for you, it’s about trying to squeeze out more rest and recovery during the normal cadence of your week. That means things like cutting back on social media and prioritizing sleep, cooldowns, and exercise. Be social and keep hobbies light, such as reading for enjoyment vs. for further skill development.

Rest truly does pay off, but, like every other aspect of your profession, you are the one responsible for making it happen!

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Written by Jared Tendler

July 8, 2024

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