Make a Daily Trading Routine to Improve your Trading, Discipline, and Life
Cory Mitchell, CMT
A daily routine can help keep traders on task with the things they are supposed to be doing, instead of succumbing to distraction. A daily routine, along with a pre-trade checklist, aligns us with our trading plan—which is our written plan for entering, exiting, and managing trades.
A daily routine creates good habits. It tells us what to be working on throughout the day.
Whether day trading or swing trading, the daily routine should be realistic, and work our trading plan into it. The trading plan may tell us how to enter a trade, the daily routine lists how we find and stalk that trade, from beginning to end. The daily routine is also used to help reduce trading mistakes and work on problem areas.
Example Daily Trading Routine
Here is an example of a daily trading routine. As mentioned, your daily routine should be realistic for your own time constraints and tailored to your strategies.
I have included times for demonstration purposes, but you would of course put in the times that work for you. Don't leave more time than you need between tasks. Move from one activity to next with fluidity. If your times are not accurate for the task, you will either not be able to finish everything you need to, or if you have too much time between tasks you may feel tempted to distract yourself. Keep busy with important tasks, not frivolous ones that won't improve your trading. During trading time, focus on trading.
The routine is as much about what it includes as what it doesn't include. At no point during the morning routine does it say "check Facebook and Twitter" or "check and respond to emails". If you need to do those things, schedule a few minutes for them. If an activity isn't built into the routine, then try to avoid it—focus on trading during trading time.
Forex Swing Trader - Morning (adjust for afternoon or evening trading)
5:25 Rise, bathroom, shower, coffee, etc.
6:00 Deep breathing, clear mind/meditate. Reinforce that it is trading time right now. Other tasks can wait until the designated times in the routine, or until free time. This is a commonly skipped step, but is very important for developing consistency.
6:10 Review the daily trading routine (have it typed out or cleanly written by your desk). Consciously note each task. Say each one, and the process and time you will give it. Even though you know your routine, do this step every day.
6:15 Go through all forex pairs you track on the largest time frame you monitor, noting trades near key levels/ possible trades areas.
- Flag possible trades or write them down, then KEEP GOING through the entire list of forex pairs. This will make sure you get to see all the pairs, so you don't get fixated on one and then miss a bunch of other opportunities.
6:35 Go through all flagged trades.
- Check for trade setup on lower time frames. Go through ALL flagged trades before placing a trade. This assures you know all the pairs that will be on your radar today, and at what levels. You can also compare each trade to the other potential trades, finding the best ones (considering reward:risk, etc.)
- Check if there is news coming out in pairs with possible trades. Ad
- Check correlation if considering more than one pair. Avoid multiple pairs that are highly correlated. Choose between them or split one position size between the highly correlated trades.
- Include any other rules you want to follow, such as the time frame used for entry, or time frame you use for the target price. Whether a trailing stop loss is used (what is it) or if trades are left alone after entry.
7:05: Place forex trades. No need to think much here. The work and analysis should already be done.
7:15 If there are pairs that are close to an entry, but that haven't"triggered" yet, open a charting platform where you can view all your "watchlist" trades with a glance. Place the pairs you need to watch on those charts. Draw in the area and direction you want to trade, so that at a glance you can see if the trade triggers...this probably means having the charts set to the timeframe where you receive your trading triggers from.
- Work out how you will monitor these trades. You may want to set alerts on your charting platform to let you know when a trade is approaching a trade level (if possible). If you have other obligations, schedule a time to come back and check on these trades.
7:25 Mentally rehearse what you will do if the forex pair rises or falls after entering a trade; if it almost reaches your target and then turns the other way; if it gets close to your stop but doesn't trigger it; if the price does nothing.
- Don't come up with answers on the spot. Your trading plan should already have all these answers in it! Your job is to just mentally rehearse what you are supposed to do in each scenario so that you are better prepared to follow the plan even if a scenario you don't like arises.
7:30 Check email, grab a water or coffee, bathroom break, grab breakfast, move on with the day, etc.
TIME: A specified time to check on the trades that were close to setting up.
14:00 Daily debrief.
- Did the routine get followed? If yes, congratulate yourself! If not, write down why. Constant violations of the routine means the routine doesn't actually fit your life (adjust the routine to fit it) or discipline is lacking (work on focusing through each step).
- Was the trading plan followed? What were the successes and failures? A failure is any time the trading plan wasn't followed. Note how this could be improved.
22:00 to 22:10 Before bed, focus on a few statements which will help your trading. These positively reinforce change when it comes to common mistakes. Some examples are below, but any statements you meditate on should be based on your own trading.
- "I trust my strategy, I trust my trades. I let them play out."
- "I am a disciplined person. I follow my trading plan, and my routine and checklist help me do it."
- "Cutting my losses and adhering to my stop losses means I am positioned mentally and physically to take advantage of the better opportunities that arise from my trading plan strategies."
Final Word on Daily Trading Routines
Tweak the above daily routine as needed.
While they may seem unimportant to trading, I recommend leaving the 10 or 15 "meditation" and mental rehearsal exercises. It is this type of activity that will have the greatest impact on reducing trading mistakes. The daily debrief is also very important.
My daily routine took me several hours to think about and figure out. I had to take my life into account, as well as my personality, and my trading plan. A customized routine is well-thought-out and helps you stay focused on executing your trading plan and eliminating mistakes.
My routine gets tweaked from time to time as life changes or I notice certain changes in my trading. Review the routine once a month to make sure it still fits your lifestyle and your trading plan.
By Cory Mitchell, CMT @corymitc
You may also like the following video on analyzing price action.
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.