- June 1, 2021
- Posted by: NetPicks
- Categories: Advanced Trading Strategies, Trading Article
Most successful traders begin their trading day with some type of pre-market routine. In fact, most successful people will tell you that one secret to success is having a routine.
Getting up to day trade five minutes before the opening bell may be a routine, but it probably isn’t the most successful
Day trading can be a stressful way to make money, keep any profit you make and traders should have a “trading preparation” checklist as they come into their trading day.
But if you want to give yourself the best possible chance of day trading success in each and every trading session, you’ll want to prepare like a pro trader – better yet, you’ll want to be a pro trader.
4 Steps To Prepare For The Market Open
With the word “simple” in mind, here are the 4 key steps to preparing like a pro trader.
- Recognize what the key market-moving economic releases and events are by checking your economic calendar are. While it can prevent you from being caught off guard, you also know when trading opportunities are most likely to present themselves to you.
- Anticipate what type of market conditions might be for the day and figuring out possible alternative scenarios. This can help you determine the likely success of various day trading strategies you trade with and which to select on a particular day.
- Identifying key market levels for the day not only helps you in terms of effective trade execution, but it also gives you a structure with which you can better understand developing trading activity.
- Getting yourself into a performance-focused mindset prior to open and visualizing how you will trade given certain market behavior will help ready your mind for the skillful execution of your trading plan.
If a high level news release is set for the day, you can expect to see some increased volatility in whatever market you are trading.
When emotional trading happens, markets extend and from that extension, we often get a reversal. You may have a strategy that focuses on mean reversion and this news event could produce the right trading setup for you.
There are times when the market goes into a consolidation while waiting for the news release. It can be frustrating trying to catch a trend wave while the market is in a standstill. Ensure your know:
- What type of market to expect
- What the appropriate trading strategy is – including sitting on your hands.
It never hurts to know the highs and lows of the previous day as they can act as potential turning points or at least pause the market movement. Knowing what is in front of you can lead you to make different decisions that have the potential to save you from taking trades at potentially dangerous positions on the chart.
Having an idea of what to expect during the days trading can assist you in “getting your mind right” while getting ready for your trading session. Trading can be less frustrating when you have already expected to experience what you are experiencing.
Keep The Trading Day Routine Simple
To derive the greatest benefit from trading day preparation, a trader must figure out a clear and simple routine that can be replicated consistently as the trader sits down at their trading platform to work.
Everything should be as simple as possible while still delivering the results you are seeking.
Think of your trading plan with too many moving parts.
Not only can things get missed, but complexity for the sake of being complex, does not usually turn into a profitable trading system or strategy.
The specifics of the trading preparation will depend on the market that someone trades and the way they trade it. Swing traders may not have the same preparation steps as a day trader would.
In order to maintain your day trading preparation consistently, there are two essential features to keep in mind.
- Whatever the methodology you choose to adopt is, it’s important to make sure that it’s simple and straight forward enough to do every single day without fail.
- You must create a standardized process that you can make into a habitual trading preparation routine
An ordered approach can help a trader to get mentally focused for the session ahead.
A standardized process that focuses on what is truly important for the trading day also gives a trader that all important point of reference. This is important because it helps a trader to appropriately weight the constant daily stream of potentially market-moving information.
It’s also of benefit in coming up with new trading ideas as you determine the type of market behavior you are potentially about to face.
Trader Success Begins With Preparation
Simplicity is a wonderful thing.
But to know precisely what to do takes some knowledge, experience and careful thought.
Your daily preparation should be a well-oiled trading machine – it should contribute to your overall trading operations not hinder you.
Take the time to figure out a few simple steps and then make sure you religiously follow this routine every single trading day and over time, this practice will pay dividends. Make sure you prepare like a pro trader.