MY TRADING ROUTINE
From an outsider, trading the financial markets looks to be an exciting, risky and adrenaline filled way to make money online. But in reality, successful trading should be dull, repetitive and void of emotion. I personally love the technicalities of the markets and see trading as a big intricate game of probabilities. You shouldn’t be risking so much that your endorphins rise as you see your profits go into the green. Likewise there should be no sleepless nights when your account is in the red. You want to keep risk low, while you consistently trade your edge and gradually grow your trading account. A regular trading routine goes hand in hand with the steady pace that you should be aiming for as a trader. A haphazard trading routine will likely lead to haphazard results.
Weekend Analysis
My trading week starts at the weekend. When the markets are closed I scan for the best looking US stocks that are outperforming the US indices. If the indices are not trending, I will not necessarily be looking to purchase any stocks but I’ll still do my analysis to make sure I’m ready for when the stock market moves back into trend.
As well as stocks, I’ll also manually look through the Forex and commodities markets for any good looking charts. This doesn’t take long because I apply a 3 second rule to each chart I look at. Starting with the monthly, then the weekly, followed by the daily. I’ll know whether a chart is worth trading within 3 seconds. Of course this may take longer as a new trader, but with time you’ll learn to dismiss charts very quickly.
My trading routine includes weekend analysis with eSignal charting.
After I have scanned stocks and analysed the Forex and commodities markets I’ll compile a watchlist for the week ahead, as well as amend my current watchlist where necessary. All in all, my weekend analysis takes me no more than 2 hours during a strong trending stock market and significantly less if the markets are quiet.
Daily Trading
The main appeal of trend trading to me was the minimal amount of time it takes. Monday to Friday my whole trading routine takes less than 20 minutes per day. This involves looking for setups from my watchlists, entering orders into my broker, managing existing trades and updating my trade log where necessary. I prefer to do my daily analysis in the evenings after the markets has closed. This is purely personal preference and there is no problem with doing it in the morning. However because Forex is a 24/5 market some setups may be missed if you prefer morning analysis. The US stock market doesn’t open until 14.30 UK time, so this would suit morning analysis perfectly.
Monthly Reflection
After every month has ended I like to do some reflection to make sure I’m continuously improving. Every month or more often if you prefer you should be reviewing trades you’ve taken. With trend trading you generally take less trades than day trading or scalping. This means reviewing past trades shouldn’t be too laborious. I’d also recommend reviewing your trading plan at least once a month. As a new trader you should be looking at your trading plan on a daily basis to ensure you are following it to the letter. Also I’d use this time to look at your goals to make sure you’re still moving towards achieving them.
Strategy Optimisation
Every year or so I’d suggest you look for ways your strategies can be tweaked. I’m not saying you should abandon your strategy during testing drawdowns looking for a another strategy. But small changes to your rules can make a significant difference to your bottom line. I wouldn’t recommend doing this if you haven’t been trading your strategy for more than a year. This is because you need to have a decent sample size under your belt to be able to properly test the proposed changes. For example this year I have made a minor tweak to the way I manage my trailing stop loss, which will improve my bottom line going forward.
Your Trading Routine Must Be Consistent
For the best chances of success your trading routine must be consistent. If you only do your analysis when you feel like it then you’ll likely miss out on some good trends. In trend trading it is the one or two big trends that provide most of the profits for the year. If those trends were offering good setups when you didn’t feel like it, then this can seriously affect your profitability. If you have risk to allocate and there are good opportunities occuring you should be taking them. Likewise your open trades should be managed when the markets dictate, not when you feel like it.
There is no secret to trading success, it is down to having discipline and consistency when trading your edge.
Thanks for reading!