Like so many other things in life, the level of attention paid to trading preparation is frequently not what it should be. This could be in part because it’s something that’s not particularly stimulating and it could be that it’s taken for granted. But if you want to give yourself the best possible chance of success in each and every trading session, you’ll want to prepare like a pro trader – you’ll want to be a pro trader.
In order to derive the greatest benefit from preparation, a trader must figure out a clear and simple routine that can be replicated consistently, time and time again. The specifics of the trading preparation will depend on what someone trades and the way they trade it. There are however, a number of core principles to nail down and I’ll come to these shortly.
In order to maintain your day trading preparation consistently, there are two essential features to keep in mind. The first is that 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. This means that it shouldn’t take too long to complete and it shouldn’t be so involved that you’ll either get too bored to do it or so involved that you end up not having enough time.
This leads on to the second feature – you must create a standardized process that you can make into a habitual trading preparation routine. This serves a trader in several ways. An ordered approach can help a trader to get mentally focused for the session ahead. It’s all too easy to be distracted by any number of things and then before you know it, the session is about to open. A standardized process 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 great benefit in coming up with new trading ideas.
4 Steps to Prepare Like a Pro Trader
With the word “simple” in mind, here are the 4 key steps to preparing like a pro trader.
1. Recognizing what the key market-moving economic releases and events are so that you’re not caught out, but you also know when trading opportunities are most likely to present themselves to you.
2. Anticipating what the type of market activity might be for the day and figuring out possible alternative scenarios, can help you to determine the likely success of various strategies you trade with and which to select on a particular day.
3. Identifying key market price markers 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.
4. 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.
Trading Success Begins Here
“Success depends upon previous preparation, and without such preparation there is sure to be failure.”
Elegant simplicity is a wonderful thing. But to know precisely what to do takes some knowledge, experience and careful thought. Your daily preparation should be like a precision-machined cog in 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.
For more updates from Mark and the team at NetPicks, be sure to visit their trading tips blog at NetPicks.com.