The best performers in the world all rely on routines. They are not winging it. Tom Brady, five-time Super Bowl winning quarterback and four-time Super Bowl MVP, goes to bed every night at 8:30 PM. He reportedly wakes up at 5:30 AM to get to work watching game film and working out.
Routines provide consistent feedback and increase performance. In any area you want to excel, you have to develop a routine. It's as simple as that.
Trading is no different.
To get you started, here are four tips for creating a routine that will help you become a successful trader.
Watch our coaches talk about developing a successful routine in this episode of Coach's Playbook.
Pick Your Hours
The markets are available 23 hours a day, Sunday night through Friday. Unfortunately, you’re not, so the first thing you want to do is to decide which hours you want to spend trading. Make sure you consider:
- Your personal life.
- Your work schedule.
- The markets you want to trade.
While you’re at it, don’t forget to set a time limit. Walking away is hard, particularly on a losing day. But it’s better than trying to make back your money all in one shot. Setting a time limit - and being disciplined enough to follow it - gives you a chance to live to trade another day.
Time away from the market is critical to your trading success. It is rejuvenating and gives you perspective for when you turn your screens back on.
Create a Trading Plan
A trading plan is essential for success. But unless you’re a full-time trader, then you need a strategy that accommodates your life.
Part of your trading plan includes picking a market that works for your life and trading style. But it can also mean re-evaluating what constitutes the best opportunities for your trades. Every market moves differently, is more liquid at different parts. Good volume in the European market looks different than in the U.S. or the Asian. These are all elements to consider when developing your trading plan. (For a more detailed discussion, check out “5 Steps for Creating a Great Trading Plan in 2018.”)
Whatever your plan is, the most important part is sticking to it. This may be even more important for people who have limited hours for trading. Imagine having a bad day and watching the clock tick down to the time you have to leave. The temptation to force your hand would be nearly irresistible.
Your better choice is to trade your strategy. If you don’t see a setup, then walk away - even if you only have 3 hours to make something happen.
Get in the Right Mindset
Traders need to be 100% focused on their job. That kind of attention takes a lot of mental energy, so it’s important you get your head in the right space before you start. Some traders create rituals that allow them to get in the zone. For instance, you might want to:
- Mediate. Plenty of athletes and performers use meditation to improve concentration and help them relax.
- Get a good night’s sleep. A tired brain is a foggy brain. Make sure you are well rested before you trade. And remember, alcohol interferes with sleep, so you may want to limit your intake the night before.
- Clean up your desk space. A messy desk is filled with distractions. Put away anything you don’t need for trading.
Funded trader Julian E. uses his ritual to get in a hyper-aware state, and he has winning days 79% of the time. (See what else has boosted his performance in his interview.)
Set Time to Reflect
Some days you lose. In fact, you will have a losing trade on most days. And lots of traders like to rehash their mistakes at the local bar. However, if all you and your colleagues are doing is commiserating, you’re missing out on an important step that can help you become a better trader.
Carve out some time in your routine for reflection. Take a close look at your bad trades and figure out what you missed. Did you pull the trigger too soon? Did you miss some detail that would have made you get out? Whatever it is, note it. You’ll be less likely to miss it the next time around.
As a trader, you need to be constantly learning. Take some time everyday to learn from the people who have been where you are. Start with TopstepTrader’s Market Wizards series for insights from Jack Schwager’s series of books.
If you have any questions or feedback, please leave it in the comments.