If your current trading routine consists of things like habitually checking your smartphone to see where your current trade is at whilst you down a coffee with 2 shots of espresso in it to ‘compensate’ for the 5 hours of sleep you got last night, this article is for you.
Just because you’re current trading routine, or lack thereof, is more of a constant state of confusion and frustration than an actual routine, doesn’t mean you can’t fix it and get on the path to trading success. The tips below will help you build or tweak your trading routine so that you can trade from the peaceful yet confident mindset required for profitable trading…
1. Get at least 7 hours of quality sleep a night
Success begins with proper sleep. As discussed on the page Understanding Sleep on the NINDS website (National Institute of Neurological Disorders and Stroke), adults need between 7 to 8 hours of sleep per night to function properly the next day. You cannot ‘compensate’ for lost sleep via caffeine or any other means; your body will eventually force you to catch up on lost sleep and the time you spend in a sleep deficit will be time spent with your cognitive abilities impaired and running far below their peak.
Needless to say, trying to trade or analyse the market and adhere to your trading plan whilst in a sleep deficit, is just not going to work. Perhaps the first and most important way to ensure a proper trading routine is by making sure you get at least 7 hours of sleep per night.
- Don’t drink coffee or other caffeinated beverages past mid-afternoon. Try tea instead.
- Don’t stay up late because you think you can sleep-in the next day. Research proves our bodies function the best when we go to bed with the sun and wake up with the sun. This means going to bed early and waking up early.
- Create a proper sleeping environment. Typically, this means a room that is cool (i.e. not too hot), dark and quiet.
2. Start your day with a healthy breakfast
I sometimes hear people say, “I don’t have time for breakfast” or “I don’t eat breakfast”, and I immediately feel sorry for them because they simply don’t know what the science says about that.
Breakfast, as the old saying goes, is the most important meal of the day. You just woke up from sleeping (hopefully 7 to 8 hours) and your body is depleted of the fuel it needs to operate properly. Make a point of having a healthy breakfast each morning; think protein, whole grains and some fruit…a Pop-Tart is obviously not what your brain and body need to function effectively and efficiently.
Drink a huge glass of water as soon as you wake up. I drink a lot of water throughout the day and I find that most people I know don’t do this. Drinking water keeps you hydrated and also helps control your appetite in between meals, and since your body is mostly water it only makes sense that you should drink that more than any other beverage.
3. Make exercise a habit
Regular exercise is basically the key to being motivated, alert and focused on everything in your life, including your trading. I personally notice a huge difference in how I feel when I don’t exercise compared to when I have been exercising regularly. Exercise keeps us feeling good both physically and mentally and this is obviously critical for proper trading habits and performance.
It can be tough to keep a consistent workout routine, but I know you know how good it feels to be full of energy and healthy, so the rewards are there to reinforce the action, you just have to get started.
Getting started is often the hardest part of anything in life, and that’s definitely true with exercise. Just sit yourself down and write out a list of all the things in your life that will be significantly improved with regular exercise, and make sure you add ‘trading performance’ to that list. Regular exercise will keep you focused and on-point, it also helps you sleep soundly at night, which as discussed above, is critical for proper cognitive function which obviously is critical for trading success.
4. Have hobbies / social life (avoid becoming a trading addict)
One thing you don’t want to turn into is a trading recluse. You don’t want to be that guy sitting in his underwear in front of his charts, hoping his trades move in his favour and letting every win or loss influence his happiness.
Trading is a way to potentially improve your life, but it shouldn’t be your life. In order to succeed at trading, you need to have outside interests so that you are distracted from over-analysing the market and also so that you feel happy and confident.
If you don’t have any hobbies currently, then find some. Join some clubs, start working out, etc. Even if your hobby is simply hanging out with your family, that’s fine, just don’t be ‘that guy’ sitting in front of his charts for hours on end, because I promise you that’s not good for you or your trading.
5. Start your trading day the night or week before
Make sure you plan out the week’s key chart levels at the beginning of the week. Make some notes about trend, your bias, potential trade setups you see and anything else…as I tell my students, you should make your own market commentary. Make it a part of your trading routine and it will pay off because you’ll have an on-going ‘story’ of where the market has been, what it’s doing and what it might do in the future.
As the famous French microbiologist Louis Pasteur once said, “Chance favours the prepared mind”.
6. Think positive
A positive mindset is important to maintaining discipline and sticking to a trading routine. You can’t get too down after a losing trade (or too up after a winning trade), you need to stay confident and motivated. Take a long-term outlook in regards to your trading and know that your success or failure isn’t determined by one trade or even one month in the market. It takes a large series of trades, typically over a year or more, to really see what your trading performance is. That means you have to stick to your trading strategy and trading plan over that series of trades to really see it working for you.
Check out this article on trading affirmations for some positive things you can remember and repeat to yourself to help you stay on track and continue thinking positively.
7. Master your trading strategy
This may seem obvious, but if you haven’t mastered your trading strategy yet, or if you don’t have a trading strategy, you can’t build a trading routine. Many traders get started on the wrong track because they don’t really have a defined trading method yet, instead, they have a hodgepodge of different methods and trading ‘tips’ they’ve read here and there, all mashed up into one confusing thing they ‘think’ is a trading strategy.
You need a trading strategy that you can learn and master and that makes sense and is simple. My price action strategy is perfect to build a method around because it is an easy to learn trading method yet highly effective and you won’t need any external influences or factors; it’s a self-contained method.
8. Learn to love the discipline of routine
Discipline, routine and patience are things people normally view as ‘boring’ or unexciting, but they shouldn’t be viewed that way at all, especially in regards to trading. You have to understand and accept that these things are how you make money in the market. Once you view them in the light of, ‘discipline and routine are profitable and rewarding’, they will take on a different meaning to you.
One of the biggest problems that traders face, is that they are thinking inverse to how they should be about trading. Meaning, they view being in the market and actively thinking about it all the time and absorbing more and more market information as something that will help them achieve consistent profitability. In reality, and I as I explained here, this is not the case at all. You’ve got to view not being in the market and not interfering with live trades as profitable and highly-valuable situations.
Eventually, when you change your thinking to agree with this reality, you will find yourself loving the discipline, patience and routine of being a successful trader.
9. Think ‘simple’
I am not asking you to think ‘simply’ here, I am asking you to remember that simplicity in all aspects if your trading is key. My article on minimalism in trading will explain this more in-depth. But, essentially, trading is something that is so easily over-complicated by people, that you need to simplify all aspects of it so that you don’t fall prey to over-analysis and over-complication of it.
Strip your charts of all indicators, learn to trade price action, simplify your trading office (you don’t need 3 monitors) and simplify your trading process. When I say “think simple” I am saying, remember that simple is better in regards to trading, I am not asking you to be ignorant. On the contrary, to trade in a simplistic manner and to understand that less is more in trading and trading in-line with that belief, requires a very high form of intellect and self-reflection.
10. Get help from other traders
Learning the routines and approaches of other traders is an invaluable learning tool. Other people have succeeded at trading before you and many people who may not be successful yet at trading can still teach you a lot especially if you’re a beginner. Mistakes can be avoided and you can learn much faster if you get help from other traders or a trading mentor.
Remember; trading shouldn’t be some random event with no structure or solid approach and routine behind it, and if you make it into that you will end up gambling all your money away in the market. You need to develop your own trading routine that fits with your schedule and personality and then stick to that trading routine with ice-cold discipline so that you can see it work in your favour over a sample size of trades so that you have an opportunity to make money.