Routines and the Trader

Routines or rituals can help prepare a trader for their trading day by establishing a set of things to do in a specific order.

This topic can also help to set –in a traders disciplines and we all know how important that is.

All those, that I have seen trading at the high end have trading routines that allow them to prepare for their day, be ready when the market opens and keep them mental prepared for whatever the market will throw at them.

Those that stick to it, I have found, seem to have an easier time of things, maintain better control and lose less because of their preparedness.  Some even start the night before with the over night sessions after all we are now global traders much different from 10 years ago.

I even remember saying at seminars, back 7 to 8 years ago, “just watch in 10 years you will be able to trade any market from anywhere 24/7” and here we are. It came faster than expected and before the 10 years, but it came so fast I can’t pin point exactly when the transition happened.

So now, routine and global thinking need to be incorporated into the everyday routine and trading strategy if it’s not already.

What do routines do for the trader? By establishing a routine and working it through each day the mind has something solid to hold onto. Information is consistent, decisions are speedy and smooth and when something new does come up, and we know it will the reaction can be pure and clear because everything else is in order and under control.  Think of it as “mind organization.”

Why do we traders need a routine?  I guess you really don’t have to have a routine but again from my past experiences with at all different levels of traders I’ve spoken to, those that use them do seem to be more successful.

Having a routine can reduce stress because if things are in order and in control. The mind is free to handle anything additional. A trader is less likely to make a mistake should the market throw a curve or an unexpected event happens.  This is especially true if you are trading multiple markets

Think about it, let’s say you have a few positions on in different markets and each is reacting differently keeping them straight can create overwhelm.

My definition of overwhelm is thinking of too many things at one time, and the mind is jumping around trying to decide what to do next, like juggling and keeping three balls in the air at one time. Nothing is accomplished with this mindset and thinking.

Dealing with the power of thought or thoughts as a trader trades puts the mind into overdrive.  I really don’t think many traders THINK about how much their mind is processing when they trade they just do it. 

Let’s THINK about how much our mind is dealing with. First we usually have multiple screens of information that need to be deciphered. We add in the technical analysis, fundamental information, start thinking of how all these should be working together as we watch the price action of the market and now add in the other markets and news and commentaries and don’t forget we are keeping our eye on our set-up criteria and when to enter. Oh yes and if you’re in a trading room or chat you are adding in what others are saying too and formulating your next course of action.

Oh and of course please don’t forget the emotions you maybe dealing with - fear apprehension, uncertainty, hesitation or anxiousness and working to control too!

Now take all that and change the information every second….and WOW….our minds are working on hyper-drive…..I’m getting exhausted just writing this!  So it’s not very hard to wonder why we could be feeling stressed.

Oh yes and I forgot to mention adding how you are physically feeling too or that someone personal issue maybe bothering you.   Life has a way to sneaking into our trading day if not careful.

What does a trader do? A routine and regimen can help because if you do it enough the sub-conscience will get programmed and you can be on auto-pilot and in the worst situation and be able to manage it.

Installing a routine goes a bit like this. 

1) First make a list a of all the things you will need to do as soon as you wake up and throughout the trading day.

2) Next determine how much time you will need to do each item on the list.

3) Create an execution time line - when will you do each item and for how long.

4) Test it during the day with an egg timer and see how you do. Make your adjustments where you need them.

Use an egg timer to stay on track at first.

Here is an example of a planned routine for trading on the West coast.

5:30 am wake up

5:30 – 5:55 – shower and dress

5:55 – 6:10 feed the animals and self

6:10 – 6:15 review the over night markets

6:15 – 6:30 – set goals and trading focus for the day

6:30 Market Open

6:30 – 8:30 take any trade set-ups that occur

8:30 - take a break

And so on…this is just a small example create what works for you.  Make a check list of things you have to cover each day and remember through repetition you can install it.

Also keep in mind it takes 21 consecutive days to install a habit.  When you do this it’s now in the sub-conscience mind and we can go into auto-pilot, just like we do when we drive. We don’t’ think about putting the key in or adjusting the mirror or seat-belt we just do it.  Guess that’s what Nike means in their ads “Just do It.”

We are actually in the testing of a product that will help to program the mind in this way and as soon as we are done YOU will be the first to know it’s there.

….and in the meantime Great Trading!