The 5 Step Daily Trading Routine for Success
Originally published as a guest post on VantagePointTrading.com.
Why do most people want to trade? More specifically, why do you want to?
It is either to make money or to have more freedom. Most likely both.
When it comes to trading, the typical fantasy assumes that you will be traveling first class, eating fine cuisine every night and driving exotic cars. Oh, and once in a blue moon you will check the computer screen and “place a trade”.
Successful traders are professionals, and live a life full of routine, discipline, preparation, meticulous planning and execution. Instead of Lambos with race seats we have high back chairs with gel cushions. Instead of expensive dinners we enjoy the exquisite meal selections of Uber Eats, and our “travel” is the walking between our monitors and the washroom. Welcome to reality.
To be successful in trading you need a plan and discipline. You also need a daily trading routine.
Here is what my day looks like.
1) Reaching Tranquility – 6AM
As traders, we live on the edge on a daily basis. Our jobs are not to execute tasks for which we are evaluated and then paid for, our sole task IS to get paid! Every day we know our value. We work one of the hardest, most demanding jobs in the world. This is why the most important determinant of how our day will go, is how our day will start. I am a firm believer of positive thought and energy.
My trading day always starts with a 10 minute meditation session as soon as I wake up, while I’m still laying in bed. This allows me to restore my positive balance and release any negative energy I may have bottled up. Once I’ve finished my meditation session I head out to the gym for a workout.
I come home and shower around 7:45am, and I will then settle into my war room, my trading office.
At this point, there is likely another fiasco that has taken place overnight, either China devaluing their currency some more, or oil prices collapsing further, or most likely both. I won’t find out for another couple of minutes.
Instead of getting right into it, I close my eyes and take three deep breaths. I inhale cold, (imagined) ocean air for 3 seconds, and exhale negativity for 5 seconds. When I open my eyes, I am calm and ready to tackle the trading day from a neutral, unbiased and optimistic mind set. Try reaching tranquility in your trading day and see what a difference it can make in your results.
This on its own is a large contributor to my daily success, not just in trading but also in my life an relationships.
2) Session Goal Setting – 8:45AM
How much money do you want to make? Very few people have an actual answer to that. Okay, how much do you need? Now divide that by 200 trading days in a year. You now have your goal for today.
I usually aim for $1,000 – $2,000 US on Monday to Thursday, and enough to pay for my lunch on Fridays.
This step is so simple, it is often overlooked.
Write down your figure so you know what you are working towards. If you hit the goal within the first 30 minutes of the trading session, will you still stay at the computer? If so, will you reduce your risk capital per trade? These are the things you need to know before you hit the go.
3) Trade Setups & Execution – 8:50am – 4:00PM
Now that you have your daily goal, you need to find some good trade setups that will help you achieve it. I start my day with listing my favorite 5 trade setups, be it currency, futures, stocks or options. Some days, all of the above. It takes me less than 10 minutes to find them as I flip through my watch lists. I grumble and mumble until five jump at me. I don’t chase them.
Once I have narrowed it to 5 trades, I then narrow it once more to just 3 trades. These trades are the ones I love from the ones I love. What could go wrong with love?
From here I will then review my entry triggers, stop losses, trailing criteria, scaling in and scaling out methodology, and all the “technical” boring mumbo jumbo. This is the stuff that we try SO HARD to master and find a holy grail to, yet, ironically, this “stuff” is the least important and easiest to “master”.
By this time, it is only 9am. I like to take the time before the open to express my gratitude for my life, my family and everything I have and love. This sounds corny, I get it. Until you do it for yourself every morning for 21 consecutive days, and start to witness your life change. Try it, I challenge you, even on weekends.
It is now 9:25am and I do my three breaths exercise from above one more time. (I also do this exercise throughout the day when I feel stress creep in)
The bell rings and the bulls and bears are set free for the epic daily battle. DING DING DING!
From this point forward, it is just a matter of executing my trading plan with laser discipline until I hit my daily target, or the market closes. Some days I enter trades earlier than 9:30am, especially if they are currency or futures positions. These early entries can happen before I head out to the gym, but never before I get my meditation and deep breathing exercises completed.
4) Scorecard – 4pm’ish
The one thing that you think you get away from when you trade full time is your boss. Well, you are wrong. Your new boss is you. And if you thought you hated your old boss, I have news for you, this one may actually be worse!
The scorecard session will occur once I meet my daily goals and decide to stop trading, or the session closes for the day around 4pm. Some days I will trade later to catch a trend into the Asian market. On rare occasions I will find myself burning the midnight oil deep into the EUR session. If there is a solid trend with promise of great returns, I can be trading 20 hours in a day, with breaks in between. But I make sure I’m compensated nicely for my time in these instances.
The scorecard is exactly what it sounds like. I give myself a grade, from A+ to F. How did I do on each trade? Then how did I do on the entire day? I include screen shots of each trade and commentary as a summary. Some days I will hang my report card on the fridge with a nice little magnet, but rarely do I get A+ all across the board. I can be pretty hard on myself some (most) times. But honesty is the first step to progress.
5) Takeaways – after above is complete
What did you learn today trading? What did you learn as a human? Are any of these “learnings” actionable, or do they need to be?
If there is no key take aways, then no big deal, call it a good day. If there are, park them in your trading notebook and revisit these takeaways every couple of days to prioritize.
If you still think you need to work on them, then start working on an action plan, decide when you will follow up and get to work. This is very important, as you are maintaining a feedback loop that you naturally get in any full time job, that is absent when you are trading. No takeaways means no growth, and no growth is no good.
That is my exciting daily trading routine. In one way I ruined your dreams of quick riches, travel and unleashed freedom. But my intention was to show you the reality of what is necessary to become a successful day trader with consistent profits.
Remember, the human mind is conditioned to find routine and patterns in everything we do. It is conditioned to automate and create processes on a subliminal level. So stop cheating your brain and give it what it wants already.
Try this trading routine on for size, and feel free to adjust it to fit your schedule and lifestyle. Let us know know how it works for you!
Lastly, all of this trading routine stuff does not mean you need to be a hermit and avoid fun, quite the contrary. I love to regularly treat myself, but it has to be planned out in advance and I try to do it around market holidays because I love trading that much – I kid you not. Typically, by my second day in paradise on any vacation I get the market itch.
Most of us trade to live, and do not live to trade. Remember to enjoy yourself and keep things fun, it’s all a game of balance.
Let us know your routine and what makes you successful below.
The information contained in this post is solely for educational purposes, and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. TRADEPRO Academy is not responsible for any liabilities arising as a result of your market involvement or individual trade activities.