Trading routine – A must have
Let me begin here by asking you a simple question. It is not that much technical. All traders out there, what is your trading routine? How much time you spend sitting before your computer screens during a trade? How much time do you spend in analysing a chart? When do you analyse your trade? How do you feel when you have a position on? How do you think it impacts your trading behaviour?
I would like to introduce a few thoughts which you can ponder on and help you become real successful in financial trading. In order to become a successful trader, you should have a strong trading routine and adhere to it at all times. By trading routine, I mean the time you sit before the screen, the trading strategy you apply and the time you actually observe and trade the market.
Time of analysis
I have come across people, you will it glued to their computer monitors as if their watching will change anything in the markets. They will read a lot into the chart with every passing minute. It affects their mental as well as emotional behaviour, ultimately driving them into making losses.
I would suggest you to limit your time of analysis to the time before you start a trade. After entering a position, don’t spend too much time analysing. It will lead to unnecessary emotional and mental agony.
I have never seen people complicating easier things than they do in financial markets. There are many who find ways to complicate a simple analysis. People will load their charts with fancy indicators and trading tools, such that it becomes a total mess.
Simplicity is the key. Keep your charts simple. Financial trading was hard before charts were introduced. Charts came as a boon to financial traders because of their ability to convey many information in a rudimentary form. But people complicate it. One approach will be to keep it modular. I would advise you to make it “readable”. A complicated chart is extremely difficult to read.
Just because the market runs 24*6, we need not sit before the systems for that long and trade many positions. Successful traders enter the markets at a particular time, make a trade and exit by a particular time, you can observe these phenomenon as periods of activity and dormancy in a chart. The market will move, but there is no point in waiting for it to move. Likewise, they will not indulge in a mid-market analysis, In order to find “tradable edges”, it is better advised to analyse charts after market hours and being patient for the right time. Remember warren buffet’s amous saying “Stock market is the instrument to transfer wealth rom the impatient to the patient”.