How Bad Sleep Destroys Trading Risk Management

The Duomo Initiative
5 min readJan 14, 2022

Lack of sleep is probably affecting your trading in ways you weren’t even aware of.

Everyone knows poor sleep can have harmful effects. It leads to more illnesses, worse overall health and deficits in cognitive processes like concentration, attention and memory.

Sleep loss can even lead the brain to start ‘eating’ itself, as astrocytes consume portions of synapses.

Despite knowing of the negative health effects, traders still fall victim to hustle culture and sacrifice sleep for more chart time.

According to the CDC, about 35% of adults receive less than the recommended duration of sleep, which is between 7 and 9 hours per night.

“That’s OK”, you might think to yourself. “If I’m tired, I’ll just use caffeine and other stimulants”.

That’s a reasonable suggestion. After all, caffeine will make you feel more awake and vigilant, which will lead you to believe you’re performing at an acceptable level.

But you’re not…

It’s been found that decision making and other aspects of cognition that are affected by poor sleep are…



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