- Build a process checklist and then schedule time into your day to do it. Set a timer, don’t go beyond it, and build a great trading business that fits your life. Sounds great! Right?
I personally trade in the mornings, and reserve nighttime and weekends for study, backtesting, designing new systems and attending mastermind groups. During my trading routine, I like to stay focused on the task at hand. I am a believer that traders need to trade – daily – and approach their portfolio with discipline and professionalism. Here are some steps I go through each day (with some helpful links from Tackle Trading).
- Check the News (5-10 minutes) – Tackle’s Morning Market Report
- Read the Market Charts (5-10 minutes) – Tackle’s Trade Center
- Manage the trades you’re in Can you take profits? Can you adjust your stop loss? Should you do nothing? Make your decisions on a trade by trade basis and move on (5-30 min) – Tackle’s Trade Management
- Search for new candidates and research potential opportunities Search for a pattern or strategy – don’t just go out looking for stocks. (5-30 min) – Tackle’s Trade Research
- Personal Study, Class Time, Homework and other areas that aren’t associated with your daily trading activities – Tackle Courses
Step 1: Check the News
Markets move on information. Information is constantly flowing in this world we live in.
If you live in America, while you sleep there are markets open and trading around the world. Economic reports and policy decisions may have been released in China which in turn triggers a rally in London. By the time a trader in the U.S. gets the news and interprets it you’ll already be seeing an impact in markets.
Almost every day there are reports that are released from government institutions and agencies that can have an impact on markets. Can we predict the reaction the market will have? No. But that’s not what you’re trying to do at this step in your day.
Your sole job while reading the news is to get the information and try to process it. Try to understand it. Over time you will develop a market posture – an opinion on where markets should be heading – based on the news flow and reaction markets have to it.
You don’t have to be a market veteran or understand everything that is presented. At this stage of the game just try to listen in. Over time if you check the news daily you will become a smarter trader, a more informed person and you’ll have a better understanding of how the economy is part of everything.
Spend 5-10 minutes… get to the core of the information… and move to the next step.
Step 2: Read the Major Market Charts
There are dozens of Indices. An Index is simply a basket of a certain kind of stocks that are measured as one unit. The Dow Jones Industrial Average is the accumulation of 30 of the top Industrial stocks. The Standard and Poor’s 500 is simply 500 of the largest US companies measured through one chart. Locate the symbols and pull up a daily chart for each of these indices each day.
What are we trying to see? In general, you are trying to get information regarding the current trend, volatility, and action in the markets. It will help you make trading decisions. Spend 5-10 minutes and move to the next step.
Step 3: Manage the Positions You Are In
Every trade must have a plan.
If you buy stock as a long-term investment you may not have much daily management. You might just look at the current profit and loss in the position, make sure the trend and pattern are intact, and move on.
If you are trading – buying with the intent to sell back to the market short-term – You’ll undoubtedly have more daily checklists to follow. You may need to adjust your stop loss, check the news on the company and then make your judgment call.
The details of this step will be dependent on what strategies you are using. Over time as you use other products such as options, futures or forex you may have individual rules set up for each product and strategy.
Each day, before you go look for that next money maker, take some time to make sure the positions you have are being traded according to your rules and money management. This should take 5-30 minutes and then you can move onto the next step.
Step 4: Conduct Research and Enter New Trades
Researching, decision-making and entering orders can be a lot of fun and exciting. You should approach it strategically.
- What has the market been doing lately?
- What patterns are most prevalent?
- What scans can you run to find candidates to trade?
- What do you expect in markets next?
You’ll get a better feel for this as you trade but for now, try to find new trades and enter orders frequently. You may not see anything specific in the market and thus may not make a trade every single day. But the days you see a pattern to take advantage of then this step is where you go to work to find trades.
One mindset that can work great is to think of researching candidates as a process of elimination. You may run a scan and find 40 stocks that fit your scan criteria! Work through the entire list and try to narrow that down to a handful that you like the best. Then you can do more thorough research on those 5.
Spend 5-30 minutes and move on. If you are a day-trader then your research will be in the market all day looking for trades. As a swing trader, the 5-30 minutes should be enough time to find a few candidates and enter some orders.
Step 5: Personal Study
It is a cliché but life is definitely a journey. You will never know everything there is to know about markets. You are a committed student so always keep that in mind and approach education with passion. But, as a trader, don’t make it the first thing you do.
Try to conduct your trading business (steps 1-4) before you crack your book and read up on the next set of strategies or ideas. You’ll be exposed to plenty of ideas, classes, trading strategies and new content. Make sure that you are TRADING while you learn. Focus on trading first and then study after you’ve done your daily job. The skill-sets you desire will come faster if you practice practice practice.