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Daily Routine Checklist for Traders
No trading is ever complete without a routine to make good trading
habits in preparation for the trades. Once a routine is being carried out
consistently, trading success will come consistently. A basic checklist
will get a new trader started.
Trader's Daily Routine Checklist - By Larry Swing
Most traders go day to day trading on the fly, take a position when
it "feels right", especially in the heat of the moment when prices
are just moving without them. Not preparing for what lies ahead for the
day, week or month can be a costly endeavor. Many don't come with a plan,
much less a checklist to prepare for the day. Many professionals are preparing
two to three hours even before the market opens. It only shows how serious
they value their work and money.
No trading is complete without a routine to make good trading habits
in preparation for the trades. No good trading results come from lack of
preparation. Once a routine is carried out consistently, trading success
will come consistently. A basic checklist below will get a new trader started.
Modifications can be made accordingly to fit the trader's preferences (use
of fundamental or technical analysis), trading style (day, swing, position)
and markets (single or multiple markets).
Before market opens
1. Check the day's economic calendar for any scheduled reports and
announcements for the day-- This part covers the fundamental analysis.
He will be checking the expected numbers against reports that will be publish
during the day, recalculating the numbers to find value. (This is typically
for the trader whose major strategy is based on fundamentals).
2. Draw up analysis for changes in the fundamental news & reports
(interest rate changes, jobless numbers, specific company earnings etc.)
to reflect to current market conditions.
3. Check the chart for overnight price action-this is mainly for a
trader who trades using technical analysis. Normally he will check to see
if the prices have violated any support/resistance area or any numbers
that he considers important enough to confirm or reject the current direction
or market conditions. In forex, the most popular indicators and tools used
are:
a. Fibonacci numbers
b. Floor pivots (daily, weekly, monthly)
c. Support/Resistance areas (daily, week, month)
d. High/Low/Open/Close
e. MACD, RSI, Momentum, Volume, or other indicators.
4. Write a trading plan – This step provides the trader to write out
his plan for the day, how many trades, how much to risk or make, where
he'll be taking the position and where he'll exit, and how large the position
size he's going to take.
During market hours
1. During market hours, the trader has a few options at hand:
a. Set alarms to notify crucial levels to trade to change positions
that need to be made. (This is for swing and daytraders)
b. Watch news channels (optional) such as CNBC or Bloomberg to make
sure there are no sudden economic or political news around the world that
may impact market movements such resignation of a president, or terrorist
attack on oil field, etc. (This is for daytraders).
c. Monitor the charts and indicators continuously, trendlines, pivots,
and redrawing Fibonacci levels. (This is for daytraders).
d. Take positions as dictated in the trading plan. If the setup had
appeared during the trading session that was written in the trading plan,
execute it accordingly.
After market hours
Trader's Daily Routine Checklist Who Have Signal-Service or Newsletter
Subscriptions
1. Check/read newsletters from paid/unpaid subscriptions from signal
service, news, analysis, etc. and compare them to trading plan. Analyze
them accordingly to be sure these fit into the trading plan.
2. Strategy portfolio management and maintenance-recalculating and
verify if the balances are correct and if any instrument has gone outside
the percentage of the portfolio. If for example an instrument that was
made 30% in gains, these gains must be settled: either by reducing the
holdings or hedge with another instrument to ensure the gains made or reduce
exposure of the originally instrument.
3. Write/Revise the trading plan for the next day, which pairs to buy/sell,
how many or how much, and tactically at what price to buy/sell and exit.
It's not mainly about checking everything and read all the information
out there before the market opens. It's about be satisfied with the
retaining content that works for the trading system. But most important,
creating a routine that becomes the foundation in building success in investing
or trading.
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