In life, business and trading it’s important to develop systems and processes to make sure you’re moving forward efficiently. As a mentor, one of the most important things I can do is show a new student how to systematically approach the market, each trading strategy and their education. Let’s take each one of those topics and explore them further.
- Market Analysis;
- Trade Management;
- Research/New Trade Entry;
- Journal and Review
Each day in the market should be approached in the same way. You always start with the news. A great place to get the news is in the Trade Center tab at tackle trading. Study each tool and learn how to use it. By gathering the information from the market you are going to be in a better position to make good decisions. So much of trading is about staying connected with the market news, economic calendar and technical analysis consistently. Much like it was in school – its better to spend a few minutes each day than it is to cram on a Friday right before a test. Try to make this an efficient use of your time as well. A thorough market prep should only take 20-30 minutes.
Market Analysis is mostly about technical analysis on the major charts in the market. Consider keeping your daily list small and manageable. The S&P 500; Dow Jones; Russell 2000; Nasdaq; Gold; Oil; the Volatility Index and the US Dollar. These charts can all be found in the futures tab under the Trade Center. There’s a video in the video vault showing you how to do this. Consider going back and watching that video.
Trade Management is best done by methodically going through each trade and applying your rules. You need to look at each of your charts, check your stops and targets and consider double checking the upcoming earnings or reports that may impact your trade. If you have your strategies defined properly, you will be more efficient at this step. For example, if you know that every time you trade a naked put you’re going to take profits at a certain percentage or cut losses at a certain delta – this makes your trading that much easier on a day to day basis.
Research and New Trade Entry. Identify the opportunities the market is giving you, go find some candidates through your watch list or a scan and methodically gather the information you need to make a decision. Using reports like the Scouting Report, Forex Report and Tackle 25 and Tackle 25 ETF lists can give you some direction. Scanning tools are available from lots of software companies, and if you have one make sure you learn to use it. But keep it simple – and focus on the process. Consider this idea: what if you found 5 companies that look very interesting and then built all of the trades out in a simulation – looked them over – and then chose the best 1 or 2 for your actual trade? You’d pull the trigger with confidence.
Journal and Review. I’m a believer in keeping this step simple. Your brokerage account keeps all of your trading history – you should learn how to go back and analyze it. Outside of that, I suggest writing down in a spreadsheet the major information from your overall account. Account totals are more important than individual trade details. Get with a mentor and come up with a plan. But this step should be no more than 5 or 10 minutes.