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18 years as a trading and life coach

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"Start Your Trading Day"
 
By Robin Dayne

This topic should be a no-brainer for most and a review for those without a routine. How you begin your day can have an impact on the days trading results.

How you start your day is important and creating a daily routine can set the tone and MA (mental attitude). The first thing is waking up from a great sleep. I have heard so many times when loses occur and I ask, "How did you sleep last night? I usually uncover the trader has not slept well. 

Sleep is so very important for trading and having your mind clear, alert and ready to go is critical. But I could talk about sleep in one article, so I will hold that for another time to get into details.

Let's assume you had a great sleep, next you want to have a good breakfast not just 5 cups of coffee. In fact I recommend you not drink coffee at all. If you are taking vitamins and then drink coffee, the vitamins don't work because the caffeine affects how the vitamins are absorbed. Also by eliminating the coffee you won't have the "crash" that comes in a few hours. There are other ways to stimulate yourself before you begin. OK so, no coffee, promise? Just try it for a week and see what happens. It may be a challenge at first but eventually you won't crave it.

The best thing is to hydrate your body with good old H2O. Since our body is made of mostly water anyway it makes perfect sense to keep it hydrated.Water is great for the mind. In fact have you ever experienced what I call "trader's trace"?

Where you're looking at the computer screen and just begin to stare blindly, not really seeing anything, because you're in a daze, yep that's trader's trace. This is a psychical warning sign that your body and mind is in need of water, and your mind goes blank because you are on hyper-drive processing the information from the market and changing every second the market does.  You're looking at multiple screens, indicators, watching the news watching for set-ups, and combining it all to make a decision, basically your mind is COOKIN!

So treat it well and feed it what it needs, W-A-T-E-R. It will thank you with sharpness, calm and focus.

OK, now you have had your sleep, breakfast and maybe a small bit of exercise to get the blood flowing you're ready to trade. Here is where a routine comes in. No matter what markets you trade preparation is so important. Some traders even do some work at night time to set their mind in the direction of the market and add in the night-time session activity so they can be better prepared and save some time in the morning.

I always suggest, especially if you are fairly new or you want to "quantum leap" your trading you keep a list and write "3 new things you learned" at the end of each day.  In the morning you take your list and you re-read it. Keep in mind just because you learned something new once, it doesn't mean the brain has it stored and will recall it again when you need it. So using the technique of "repetition" can help the brain store it.  Add this to your daily routine.

Use questions to get your mind working, and provide focus for the day, like:

What was great about your trading yesterday?
What will you repeat?
What will you focus on for the day?
What are my goals for the day?
Re-read your list of rules?
Re-read your 3 new things page
What could I do to my trading today to make more money?
What could I do to fix what didn't work before?
What must I NEVER do again?

Questions in the morning are great to get you in the right MA. Questions in general keep your mind working and in balance. Questions help to keep you out of emotions, because the mind is to busy finding the answers to the questions, so emotions don't come in if the mind is kept busy.

Another thing you can do to keep emotions in check and to see if they are affecting your trades is to take and emotional rating before you trade and right after a trade. Create your own scale maybe a 1-2-3 scale 1 = Total control 2=50/50 in control 3= out of control. Do set your numbers for what works for you.

The idea is to determine if your emotions are getting in the way of your trading.Add this to your morning routine.  Actually add anything you think will help your morning routine.

There will come a day when your trading is in absolute "perfection" when all the planets align when emotions don't exist when each trade you take is brilliant and perfect. It's on that wonderful day or days you MUST write everything you did, how you eat, slept, prepared and even what you wore. It's that day that you want to recall when you need it.  They are few and far between but when they come you will know and they are spectacular!

Next create a routine for yourself to get into the best mental attitude you can. Imagine how you feel when your trading is ON and how good it feels.

Create a trade criteria check list. These are the data points that must be in place for you to take a trade. It's important to write them down and get in the habit of using the list before each entry. After awhile it will become second nature. An example would be: 1) The trend has to be clear for at least 5 one minute bars. 2) The Dow and S&P have to be in the same direction of my trade. And so on.

Your morning routine can be anything you like as long as it works and it gets you in a great MA to trade at your peak. Should you be "off" then know you are off and take sometime to get back on track. Remember: great traders know when NOT to trade. Routines are a good way to create consistency and certainty in your trading.

You and only you are in control of your trading and anything is possible. So create a morning routine and stick to it.

So the bottom line is to create a routine or ritual you do daily that puts you in the best frame of mind to trade.

And until next time great trading!

Disclaimer/Nondisclosure 

ALL the information in the Robin Dayne Newsletter is for educational purposes only and is the sole property of Robin Dayne Inc. (RDI) and may not be duplicated, recorded or reproduced in any way and includes: verbal, print, e-mail, or any media vehicle without the written permission of RDI.

It's been, an interesting week as stocks and commodities claw their way back up after the end of week sell off on Friday. Most of the chart technical are pointing to another wave lower for gold, silver, oil and the broad market.

This next wave of selling would form an ABC retrace pattern on the commodity charts and this pattern is bullish. Also commodity prices would drop to key support levels which would most likely provide a low risk entry point depending on the price and volume action at that time. So lower price is good for the big picture which is higher prices.

The charts below are a quick visual of what I am seeing and thinking…

GLD – Gold Exchange Traded Fund Trading Chart  

The gold etf trading fund is getting closer to completing is 4 month correction and start another rally if all goes well in the coming week or two. What I am looking for is gold to hit resistance at $113 and then drop to the $110 level which is a key support level. . Read More

 Last week was exciting with broad market and gold forming an intraday reversal pattern after a long overbought rally, then broke down though short term key support levels. While this move lower was tough on the pocket book for those who chased the market up the past few days and/or were not moving their protective stops up, this move is good for the health of the market.

This pullback is actually a good thing for us active traders who wait for low risk setups and don't chase prices higher, but rather buy on the dips in a bull market when most of the risk has been flushed out already. Trading with low risk setups is not the most exciting type of trading because there are not a ton of setups but if one can be patient and wait for these plays it is a very profitable strategy in the long run.

Those traders who live and breathe the market focusing on trading intraday price action most likely made a small fortune last week with Fridays sell off in stocks and precious metals. You can see how some of us took advantage of this sharp pullback last week with my before and after videos: Gold Futures Trading Signals - http://www.futurestradingsignals.com/trading-education/friday-gold-sp500-market-meltdown-opportunity/

Below are the charts showing what I am currently thinking is going to happen for gold, silver, gold stocks and oil. I will be tracking the market with intraday charts to help pin-point a low risk entry point for a possible short or long position as the market unfolds this week

GLD – Gold Trading ETF

The chart below is an updated chart which I have showed several times. It shows how gold corrected, bottomed and is now trending back up. This week I will be watched closely to be sure we take a position which has the highest probability of working in our favor if and when a low risk setup occurs. Read More

Goldman's Alleged "Fraud" crashes financials.  What's Next?
April 18th, 2010

 This was supposed to be the week of earnings and the S&Ps soaring to 1250 but the week was overshadowed Friday morning when the SEC charged Goldman Sachs (GS) with fraud. Most traders and investors shot first and asked questions later. Financials were hit hard in the market selloff. The timing couldn't have been worst for the financial industry as big banks had been aggressively making their case to resist increased oversight on their derivatives trading operations. Obama quickly announced he will veto any bill that does not regulate derivatives and have them trade on an exchange. Finally, one of my favorite naked puts sales, the CME Group, should benefit greatly. 

Months ago on 12/24/09, Gretchen Morgenson of the NY Times exposed GS practice of these deals. See Banks Bundled Bad Debt, Bet against it and Won . To date, while appalling, the case has not been made that these CBOs were fraudulent. This week's hammer blow will unleash waves of "Schadenfreude".  It seems the Germans have a word for everything. This means "satisfaction or pleasure felt at someone else's misfortune." which seems quite apt here.  GS is now the most envied and yet hated company in the world. 

No where have I seen anything in the media regarding the GS answer to the SEC charges. I'll provide a few salient points. First, GS answered that extensive disclosure was provided. Second, the risk associated with the securities was known to the two rather large institutional investors who were among the most sophisticated mortgage investors in the world. Third, in normal business practices, market makers do not disclose the identities of a buyer to the seller and vice versa. Fourth and finally, any investor losses resulted from the overall negative performance of the entire housing sector, not because of which particular securities ended in the referenced portfolio or how they were selected. 

A class action lawyer commented on a cable network channel Friday that this case is analogous to a client approaching GS asking that GS build him a house where the client would supply the building materials which were highly flammable. GS would then find a buyer for the house and then the client would take out a fire insurance contract and wait for the house to burn down shortly to collect the insurance proceeds. That's nice work if we could get it.

What do I think and what this means looking ahead: 

My first observation is why now and why in the middle of a trading day and not before or after hours? Maximum impact! Punish investors! Populism! It's Obama and Main Street against those greedy Wall Street fat cats. Everyone is talking about it now. We've pushed rampant spending, record deficits, health care and the Tea Party right off the front pages. It's officially the golden age for attaching the world's leading investment bank. It's likely other suits will follow. 

Last year I was really happy to having Obama as President, looking forward to a breath of fresh air. Instead now I find out Obama is out to control huge chucks of the economy: ENERGY, PUBLIC EDUCATION, NATIONAL HEALTH CARE and FINANCIAL INSTITUTIONS. We even threw in the AUTO INDUSTRY for free. It's hardly a coincidence. I suspect that the SEC's move against GS comes as Congress is wrangling over financial reform. The complaint, whatever its eventual disposition strikes me as odds-on favorite to yield a much tougher reform bill as appeared as early as this past Wednesday.  Read More