The Importance of a Routine

A routine defines who you are, not only as a trader but as a person. It is your repeated actions that will eventually lead to your success or failure. Do you wake up and let things happen to you, or do you have a structured routine that makes things happen for you? You create you results in life and trading, no one else.

Following a daily routine will ensure everything gets done, and done in an efficient manner. Anyone who is familiar with aviation knows that pilots must complete checklists before they take flight. This helps ensure nothing is forgotten and the pilot is ready to fly the plane. You wouldn’t get on a plane knowing the pilot just showed up two minutes before the flight and is going to wing it today. You want to know your pilot has extensive training and is prepared to fly the plane.

With that said, I must ask why are some traders showing up just in time for the open with little or no prep work and no concrete plan to guide their trading for the day? You wouldn’t allow someone managing your money to act this way, I certainly know I wouldn’t, so why is it ok for traders managing their own accounts to do so?

Hence the importance of a daily routine. You will be amazed at the difference in your results from just being prepared and having a routine. OK, so now you know the importance of a routine, but what should a trader’s routine look like? The answer to that question is not that simple because every trader is going to be different, and his/her routine will vary slightly. I will give you an example of my routine and you can see what a professionals routine looks like and incorporate whatever you feel you need into your own routine.

I wake up at 5:00 a.m. (I used to wake up at 4:00 a.m. when I was at the office but I trade from home now), I get out of bed, put some coffee on, and prepare my breakfast. I then shower and get to the screens by no later than 5:30 – 5:45 a.m.  It is very important that I arrive early to ensure I am prepared to trade.

Just like a pilot I also have a checklist of tasks that must be completed before I trade, and I divide these tasks into three groups. The first group is “areas of focus.” These are areas that require extra attention. Something I am currently struggling with or something I must be aware of. For example, if I miss a trade there will always be another trade so I do not need to chase it. I will let it go and move on to the next trade. Areas of focus are not necessarily task but keeping my focus on areas to work on or improve.

The second group is “pre market tasks.” Before the market opens I have a checklist of tasks that must be completed. (This will help me complete my trade plan that will guide my trading for the day.) For example, check overnight inventory, find important key reference areas, read the profiles, where will we likely open up and what does this mean, just to name a few.

The third group is “live market tasks.” These are tasks that must be carried out during the trading day. For example, how do we open, monitor for strength, look for reversal patterns, be aware of higher time frame absorption, no adding to positions unless at a separate trade location etc.

Then when the market closes I always complete my trading journal and spreadsheet. I also review my trades and look for ways to improve.

Your routine is everything, put yours in writing and carry it out until you memorize it.

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