5 Powerful Trading Routine Tips from the Experts

You are no doubt already aware of the fact that having and executing a powerful trading routine each day is the foundation of successful traders.

Brett Steenbarger, one of the world’s best trading psychologists, said this in his outstanding book ‘Enhancing Trader Performance’, ‘Trading performance is less a function of what traders learn than of how they learn it. Expertise is the outcome of a process.’ 

And what better way to feel in control of your day than with a well-structured morning routine, a process, to kick-start your trading day.

One of the most inspirational and epic comebacks this year was Tiger Woods winning the 2019 US Masters. It has been 11 years since his last win, and during that time, Tiger has had multiple back and knee surgeries, a scandalous romance life, two kids and was as high as 1,186 in the world golf rankings.

In his post-game interview, one thing stood out, and that was his focus and commitment to his routine. The processes he goes through every day to get ready to take on the world’s best golfers.

You will notice how the best sportspeople all have consistent pre-shot routines, from tennis to golf, soccer or any Olympic athlete.

Michael Phelps, the most decorated Olympian of all time, with a total of 28 medals, has this to say about his pre-swim routine, ‘It’s just a routine. My routine. It’s the routine I’ve gone through my whole life. I’m not going to change it.’

It’s clear the world’s best have a routine, so let’s now take a look at 5 powerful trading routines from the experts which you can add to or create as part of your routine.

1. Create a variety of possible scenarios for your trading day ahead

Brett Steenbarger is a big believer in creating processes for becoming better at handling the random events the markets can throw at us each day.

The best traders plan their trades and then trade their plans. But Steenbarger has something interesting to note about experienced traders.

They don’t just plan their trade, but they plan a variety of possible scenarios for each of the potential trades based on the news due out, market volatility or central bank decisions.

Your goal as a trader is to take your plan another step up and create multiple contingencies for what could happen from when you open any new position. This will give you emotional stability when things go unexpected. They will be unexpected for the average trader, but you will have mapped out scenarios in advance, remaining prepared, calm and in control.

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2. Information gathering before the market open is critical

This routine is simple. You must know what news is coming out that can impact your positions.

Forex traders should start each day by confirming what high impact events are coming up for the session ahead.

High impact events can cause positions to gap and will increase volatility. This will, in turn, affect the size of your stops or depending on the rules of your system, may get you to close out before something like Non-farm Payroll data.

Most trading rooms and even those who trade from home will have a whiteboard listing all the key events to watch out for over the next five days. Smart traders know what is coming.

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3. Analysing the markets with clear and concise notes

When it comes time to act, you must move with certainty & conviction. Delaying will cost you money.

Before the markets are open and active, you want to know your game plan and have conviction with every trade such that when it hits your levels, you take action.

There can be no second-guessing when the market is moving. Your entry criteria has been hit, so you must take action and get set.

Most traders have a notepad they write their market analysis and trade ideas in.

If you have an opportunity to study successful traders, you will find the vast majority like to physically write their trade ideas down instead of using Evernote, excel or notepad on their PC.

There is a magical process when you put pen to paper and so too with your morning analysis. Get your key trade ideas down. Note the full plan for each trade and then use that as your trading bible for each session.

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4. Visualising your successful trading day – mental preparation

Visualisation is synonymous with elite performance in every field. No matter if you are a musician, sportsperson or looking to become a successful trader, you are going to want to add visualisation to your morning routine.

The team at SMB capital, a proprietary trading desk located in Midtown Manhattan founded in 2005 by two active traders, have some of the most successful day traders in the world right now. And their market preparation includes visualisation every single day.

The types of things you might like to visualise:

  • Creating a scenario where you are riding the waves of the market as your system is designed.
  • Staying calm during adverse market moves.
  • Taking action on a breakout as your system identifies it.
  • You are executing your stop loss when market conditions dictate.
  • Identifying and hitting your daily profit target.
  • Seeing your reversal limit orders get hit and then ride them to a successful profit level.

There are so many scientific studies on the importance of visualisation that you’d be remiss not to include it as part of your trading routine.

5. Exercise

Like visualisation, there is a mountain of evidence to highlight the importance of exercise in every aspect of our lives. 

Exercise helps:

  • Reduce stress
  • Increase your energy levels
  • Give you a clear mind
  • Improve your mood
  • Reduce your chance of a myriad of health problems
  • Keep your weight in balance

According to Tom Rath, author of Are You Fully Charged, the beauty of getting morning exercise is the positive benefits last up to 12 hours from just 20 minutes of activity.

But another subtle hint of Tom’s focus for a good day is to build movement into every hour of your trading day. Keep alert, keep the blood and oxygen pumping and keep moving.

So, there you have five helpful tips you can easily build into your daily trading routine to become a more in-control, focused trader.

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

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