Become a Successful Trader

March 27, 2012

A Template for Setting Up Your Trading Routine

In a prior post I detailed my daily trading routine. As is common throughout my life, my routine has evolved and adapted to the markets just as I have. Here is a look at my current trading routine with some ideas to help build your own.

The Segments of My Trading Day

Market Prep (6:30 to 7:00 AM) All times are in CST

Market preparation is everything. Over-prepare is the name of the game. Having a plan for every situation makes the process of execution much easier.

  • Review the overnight session
  • Check for news announcements
  • Execute the gap fill trade

Each morning I ask myself the following questions…

What is the daily trend?
Where are we in the daily trend?
What is the 15-min trend?
What is the next setup?

From here I know exactly when and where I want to place my trade. This thought process also helps me visualize the different scenarios that could arise.

Trading (7:00 AM to Varies…10:30 AM, 12:00 PM, 2:00 PM)

I break the trading day down into 4 basic sessions (five if you include the Euro open):

  • Pre-Market (7:00 to 8:30 AM)
  • Morning (8:30 to 10:30 AM)
  • Lunch (10:30 AM to 12:00 PM)
  • Afternoon (12:00 to 2:00 PM)

During the pre-market I’m looking for setups on the Euro continued from the overnight and I look to place a gap fill trade if one sets up. (If interested, I put together a webinar outlining the criteria I use to enter, exit and manage the gap fill trade).

Your Signal to STOP TradingStop

My rule is I will continue to trade when the market is showing me good setups. When my trades are working, I’m getting targets hit, and taking profits.

I will assess my trading at 10:30 AM and if I am having a good day I will continue to trade. If the markets are slow, choppy, and going nowhere I will typically stop trading at this time, as the lunch session only sees more of a slowdown.

These day’s don’t happen that often, but frequently enough to where calling it quits for the day is of value to your bottom line versus sitting and forcing trades that don’t really meet your criteria.

Why I Don’t Set a Daily Profit Goal

If we are trading in a nice series of moves and I’m seeing profits on the day I will continue to trade. I’ve found that there are a handful of fantastic days each month and those are the days that I want to take advantage of and collect the most out of the markets.

If I were to stop trading once I reached a daily profit objective I would essentially be leaving money on the table on these great days and forcing trades on bad days, a recipe for disaster. Instead, I continue to trade on good days, and stop trading on slow days.

Exercise and Fun (Afternoons)

Outdoor FunAs you’ve probably heard me talk about before, I race mountain bikes. This is a huge part of my life and a delivers a healthy balance away from trading. The freedom and flexibility trading provides is fantastic, but keep in mind WHY it is that we trade. Life isn’t ALL about working hard and making money. Get out and have some fun, explore, try something new.

Biking provides me with adventure and a huge adrenaline rush. It takes me to amazing new places both physically and mentally (like trading). I am truly grateful to have the opportunity to do both (trade and ride my bike).

There are so many benefits of exercise and I talk about some of them in my post titled 6 Tips to Feel More Alert and Focused During the Trading Day.

Reviewing My Trades (Evening)

Once I’ve had my fun outside on the bike I’ll usually make dinner or grab a bite with friends. I set aside an hour each evening to go through the trading day and review all of my trades. I like to do this after the market has closed to gain a fresh perspective on things I may have missed or overlooked during the day (after all we are all human, even I miss things).

Market AnalysisI do a full market recap, looking over the indices, currencies, and some specific sectors. I also go through my individual trades and review the ones I took, setups that I may have missed, and notes that I made throughout the day.

I keep a big legal pad by my side all day and this is what I use to make all my notes. I then enter them into StockTickr or Trading Journal Spreadsheets.

I compile a nightly watch list using FinViz and sift through a basket of stocks that I use to swing trade. I’ve got this down to about a 20-min process where I can scan, pick out, and asses tickers that I will trade the following day. Even if you don’t swing trade I find looking at 200-500 individual stocks each night helps me get a better reading on where we are in the markets.

But What if I Work a 9-5 Job?

Trading provides (among other things) a desirable lifestyle. In my next post I will talk about how I made the switch from working a “normal” job to trading full-time.

You may want to work part-time and trade part-time and that’s great. I will share some ideas for doing both, incorporating trading into your schedule to live a balanced and fulfilling life.


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About Tim Racette
Tim Racette is a day trader of 15+ years in the E-mini futures and swing trader of stocks. Mountain biker, lover of the outdoors, and explorer. Tim is an ASU Sun Devil and a Chicagoland Native now living in sunny Scottsdale, AZ.
  1. Thanks for the walk-through. Good information

  2. Thanks for sharing. I’ve written many plans in my day, but each time I run into trouble, I realize that I am trading impulsively, instead of according to my plan. Sticking to a plan is more important than writing one. I’ve incorporated “penalties” and rewards in my plan. If I violate my plan in a big way, I sit in the penalty box for a while. I also might have an ice cream if I have a string of really good trades. When I play sports, I am a good sport, but I have to work on not being a whiny loser in trading. Thanks!

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