Preparing for your Trading Day Like a NASCAR Team

8:00 am race day. Tensions are running high, the standings hang in the balance and there’s hardly enough time for the adjustments you’d like to make. Welcome to the realities of a NASCAR team.

The preparations made in the coming minutes will reflect the discipline, attitude and approach each team has taken to the track for years. Overhauling the engine will send you to the back of the pack. No, this is time for vital intelligence, race strategy adjustments and confirmation on the spots you’ll make your moves.

Likewise, the minutes leading up to market open can be a chaotic glance at charts or a chance to fine-tune a winning strategy. If you don’t have enough time to prepare — you don’t have the right strategy.

Focusing on a few fundamentals in a matter of minutes can be the difference between champagne or a quiet ride home.

The difference between predicting, planning and profiting

If the driver of your favorite race team is making plans at 2:15 in the afternoon on race day — he or she is too late. With the green flag flying at 2:18, it would be an accomplishment to have made it onto the track with this ‘fly-by-the-seat’ approach.

The same is true when it comes to planning your trading day. If you’re glancing at charts with minutes to spare before market opens — then you’ve already set yourself up for failure. Amazingly enough, that’s not what does most retail traders in when it comes to their planning regimen.

The routine of looking at charts, reading the news and attempting to predict the market is often a self-defeating process that many traders subject themselves to every day. It’s with great intentions that these efforts start and with begrudging thoughts that they’re ultimately carried out.

Why? These efforts focus on good aspects that influence trading — but not the essential elements that dictate trade locations or entry strategy. This can be changed immediately with a routine that can be completed in minutes, every time, with confidence — like your favorite NASCAR team.

Locations on the track that point toward success

Winning drivers will tell you that they care about the nostalgia of history, combined with the realities brought to the track that very day. The best routines are the ones that can be immediately internalized and applied from the moment they hit the gas.

The same is true in planning your trading day. A macro and micro perspective on your chosen market(s), will best inform what you choose to focus on for the coming day.

For the macro, you’re looking for a 300-day perspective on where volume has rejected price and where institutions have historically made their aggressive moves. This will immediately plot places on your chart where price will honor prior performance — providing important support and resistance points.

Spot the places on the track where volume has backed away and/or the institutions have stepped in, creating reversals.

For the micro, you should zero in on areas of confluence where prior value areas, such as VAH (Value Area High), VAL (Value Area Low) and POC (Point Of Control) converge. Know that when price approaches and visits these moments you’ll have action that you need to be prepared for. See our ES chart below as an example — the boxes in blue highlight areas of confluence to watch for.

When you have confluence, you have straightaways -- chances to hit the gas for profitable entries.

Overcoming setbacks with confident entry locations

If psychology is important in the sport of racing, it’s even more important in trading. Having a routine that you can use as a foundation for confident entries makes a huge difference when it comes to whether you’ll keep it — or simply go through the motions.

Look at the historical price performance when it comes to VRL (Volume Rejection Levels), ITL (Institutional Trade Levels) and areas of confluence. Hell, just look at prior VAH, VAL and POC when price comes back for a visit. Plotting, knowing, and USING these as your starting point when determining high probability locations will increase your confidence when evaluating the rest of your entries.

If you’ve been losing consistently, head back to the fundamentals of macro and micro planning — using volume as your key. You’ll find this instills a foundation that you can confidently build on.

A regimen that can’t be skipped if you want to profit

There are those who say planning is overrated. It’s the execution that you need to pay attention to.

Suffice it to say, if winning a NASCAR race was easy, the fanatical interest would evaporate — along with the resources pumped into winning. In today’s market, if consistent profits were as easy as some indicators make it sound, the market would be flooded with millionaires.

A disciplined daily diet of volume analysis and location mapping, using the NOFT suite of tools, helps you internalize the market you trade in a way that makes you race-ready. It reduces your reliance on arrows and whistles to signal trades and gives you the perspective you need to profit with your own analysis.

Plotting out locations based on actual performance data instead of the news or a price-based indicator gives you an advantage over 95% of the retail traders out there.

Take the time — it’s not overrated and will deliver returns you can count on.

Noft Traders offers a Funded Trader Program. To learn more, visit their informational page at NOFT-Traders.com.