When you’re first starting out with trading, you may feel pressured to check your phone every half an hour, or to limit your sleep at night so as not to miss anything important. You may feel like you’re stumbling from one trade to the next with no routine, no downtime and no real plan. This is one of the most important factors that separates the professionals from the amateurs, but just because you have no routine now, doesn’t mean it has to stay that way. Here we’ll look at 5 tips for establishing an effective trading routine.
To become an efficient trader, you need to be organized. One of the first things you need to do is set up your workstation with everything you need easily accessible. Then, automate as many tasks as you can so you’re not spending time on unnecessary exercises. Set up charts and templates so they’re easy and quick to utilize, with the information simple to see and use.
1. Get Organized and Automated
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2. Plan Ahead
Use any downtime you have, especially the weekend, to plan ahead. Update your charts, look for patterns, set price alerts and plan the trading week that’s coming up, without the pressure of moving markets. Write your plan down so you have it in front of you.
3. Start the Day in the Know
The first thing to do each morning is to check the news to see what’s happening in the world and make sure you have the information that is important for your trading day. Get a general idea of the market and what’s interesting to investors at the moment. Read a variety of different sites to get the whole picture. It’s also important to have a look at indices and other markets which can give you important information.
4. Compare Your Trading Plan to the World News
You created your day’s trading plan the night before or your week’s trading plan over the weekend, but now you’ve just read the news. You can also now look at your last day of trading and get an idea of where you stand. Perhaps there have been new developments or there was a major global event that will change your plan. This is the time to rework your day’s trading plan if necessary. You’ve already done the hard work so it shouldn’t take too long even if you need to make some changes.
5. Don’t Watch the Charts All Day
You’ve created a trading plan which you’ve checked and revised first thing in the morning. The best thing to do during the day is briefly check the charts every few hours. Sitting and watching the charts all day is most likely to lead you to make a bad trading decision, out of boredom if nothing else. If you’ve done the work before, all that’s left for you to do is to review your trades at the end of the day to help you create your trading plan for the coming day.