One the benefits of trading is that we can work from the comfort of our own home on our own time. We can wake up in our underwear,get a cup of coffee, and not stress about an hour commute in traffic on the way to a 9 to 5 job.
But having this much comfort and accessibility can also be a detriment to our trading career in the long term.
I have personally done this myself, and can attest to how poorly it cam affect your trading if your “freedom” is not tamed.
For example, when I got too comfortable with trading I would roll out of bed at 9:00 Am, rush to get everything set up, such as my broker and scanner platform.
At first I thought I could pull this off, but I quickly humbled with loss after loss. It was self evident that it was a direct correlation with me not having a plan prior to trading.
It was also do to me not having the same routine everyday that ensured consistency overall.
You can’t expect to live an inconsistent , out of order life but trade consistently and execute plans to perfection.
So in this post I am going to go over some questions that each trader should be asking of themselves to help ensure consistency and hopefully make you a better trader because of it.
What Time Do You Wake Up Each Morning?
If you cant answer this, it is a major problem, since the time you wake up is your first trial of consistency.
The time you wake up should somewhat reflect what type of trader you are. For example, a lot of scalp traders can get away with waking up at a later time because they are less worried about pre-market and market sentiment. (I still recommend every type of trader know is familiar with both.
What Do You Eat For Breakfast In The Morning?
Diet will become a key role in how you trade because it can effect your mood.
Do you wake up and eat unhealthy foods riddled with grease, unhealthy fats and low nutritional benefits??
Foods like this will often leaving you feeling sluggish and fatigued (which has personally happened to me on many occasions.)
I would wake up and the first thing that would enter my stomach was left over pizza and a sugary soda. This automatically gave my body an insulin spike, and then when 9:30 EST time came (Market Open) I was crashed on the couch dead asleep.
In my opinion the food you eat in the morning should be on the lighter side, so that it doesn’t send your insulin out the roof and come crashing down later.
I usually start off with water and a smoothie made with bananas, different berries, a pinch of cinnamon and nutmeg, low sugar vanilla yogurt, almond milf and spinach.
When I drink it I feel full, but it doesn’t leave me feeling tired because it doesn’t have as much sugar as other fast food “smoothies”.
I also gain confidence knowing that I am continuously fueling my body with good healthy foods , and in return I know my body will pay me back for it.
Just the same as when you give your sports car the best fuel and tires available, the car will most likely give you optimal performance. Now you have more confidence because you know you get out what you put in.
Do You Exercise Before You Trade?
I love getting in a good workout before a trading session. Not something that is too taxing on the body that will make me tired throughout the day.
Enough exercise to get my body loose and gets the blood flowing.
For me personally it is a away for me to release any tension I may be carrying, as well as a release for emotional stress.
By the time I get home I definitely feel more calmed and focused on the next task.
Are You Taking The Time To Meditate/Pray etc??
Whatever your “thing” is, I firmly believe in mental exercise. This usually helps me with better decision making as well as sticking to my game plan, especially in high times of stress.
Do You Have A Consistent Gameplay Session? (Trading Plan)
By this I mean when its time to do your scans are you just picking high of day plays and that’s it?
This will usually cause inconsistency because there really is no in depth plan there.
A better plan would be to have a handful of stocks you selected either last night or pre-market, and decide first why these stocks are on your watchlist.
After you, you draw your trendlines. This makes it easier during the trade to see Support and Resistance instead of entering the trade and then trying to find support and resistance.
Then select which stocks have the best opportunity.
Now check if there is any news that will influencing the stock or will influence it later.
Set your profit target,entry point,and stop loss. Doing all of this will take tremendous stress off trading because you are almost making each decision mechanically.
Imagine trying to make trades on a whim, with barely any plan. You would basically be trading off of pure emotion which is the last thing you want to do.
When you ask yourself the 5 W’S (Who, What, When,Where, and Why), I want you to be able to answer each one of them with a distinctive answer for each W.
Who is trading them (think of volume, relative volume, float and short interest)
What stocks do you plan to trade? (Off of your watchlist or scans)
When do you plan to trade them (What time frame do you want to take action/entry price/exit price)
Where (At what price levels/where is support and resistance)
Why do you want to trade this stock (Why are you entering? Gap fill? Support and resistance play? Break out? News? )
The more you can answer these questions when asked of you as well as making your daily habits more consistent, the more you consistency trading wise should increase.
Have a wonderful day traders!