How To Set a Pre-Trading Routine That Works
“Give me six hours to chop down a tree and I will spend the first four sharpening the ax”
- Abraham Lincoln -
Most of the time, your failure in trading is due to hasty decisions taken with little information and regret later.
The process of executing your strategy doesn't take much time, it's just pressing the button to sell or buy. However, it requires rapid decision-making.
The better prepared you are, the faster and accurate your decision-making will be.
The executions should take zero thought process. This, because you already decided up-front how would you react in the various conditions the market might present you with, and when one of them shows up in the chart, you have no single doubt about what you should do (or not do).
Your trading preparation is not only about preparing the way you react to the market but as well, to give you the confidence to do it flawlessly.
In this article, we’re going to look at why it’s important to have a pre-trading routine and how you can put one together that will work for you.
Why it is so important to have one?
It prepares your mental state to an optimal condition for you to be at your full potential when you're executing your strategy live;
It prepares your executions;
It gives you discipline, focus, and condition. If you can have discipline outside of the charts, you can bring it to your trading.
It gives you purpose as well because you're not only waking up and going straight away to the charts. It's healthy to execute a routine before you put your eyes on the charts.
Prevents stress and anxiety.
Depending on the session you trade, your pre-trading routine has to be done before the trading sessions starts so you have time enough.
You want to start your trading session feeling calm, relaxed, and prepared for whatever the market throws at you.
What you should be able to accomplish with your pre-trading routine?
Whatever your pre-market routine includes, it should definitely involve eating breakfast and waking up properly!
Other than that, there are no fixed tasks or activities you have to do obligatorily.
Each trader is different!
However, the tasks you execute must accomplish these things for you:
Give you focus;
Make you awake;
Give you motivation;
Remind you of your plan;
Give you calm and clearance;
Make you aware of important events;
Give you confidence and self-awareness;
Prepare you for the different scenarios the market may show.
What activities you can incorporate in your pre-trading routine?
- Execute a task that gives you focus:
Take a morning walk, go to the gym, listen to a podcast... whatever fits for you;
Some traders start the day with exercise before trading. Exercise can get you pumped and has also been shown to improve your mental ability.
- Execute a task that wakes you up:
Drink coffee and eat your breakfast calmly before you start trading.
- Execute a task that gives you motivation:
Write down 3 things you wanna improve for the day as a trader & stick them to your computer screen.
While you're trading, you'll remind them fast which will help you remaining disciplined.
- Execute a task that reminds you of your plan:
Review your trading strategy & read it out loud 3 times.
- Execute a task that brings you calm and clearance:
Meditation, breathing techniques, reading a book, taking a walk.
- Execute a task that gives you awareness:
Check the economic calendar for the high-impact news and see how it can affect your trading.
- Execute a task that gives you confidence and self-awareness:
Write down empowering sentences related to you as a trader and read it out loud.
Starting your trading day positive and motivated is crucial to perceive new opportunities.
- Execute a task that prepares you to play your strategy flawlessly:
Make your analysis and set reactions to the various possible scenarios the market may present you with. No reaction is a reaction too.
Note: Remove any distractions when you're executing your pre-trading routine. You don't wanna grab your phone to check the notifications because this will totally spoil the focusing process.
If you want to be part of the 1%, you have to do more than what the 99% does.
Bonus:
One thing I include in my pre-trading routine that has been the best so far is reviewing the screenshots of my winners and the backtested winning setups.
In my computer I have saved different variations of winning setups and I categorize them. In one fold, I put together both winning setups of my backtesting and past winners of my trading journal.
As price action unrolls, I see which saved winning setup looks more similar to the one that is forming real time.
I compare the confluences, the price patterns, candle types and other correlations between both.
I enter the trade based on this comparation.
This helped me develop my pattern recognition skills in a extraordinary way!
The more I do it, the better I know my strategy and how it plays in different market conditions!
Plus, I difficultly make mistakes or feel tempted to disrespect my strategy.
Another benefit of reviewing your past winners or backtested winning setups is that it gives you motivation and confidence in your strategy before you start your day.
You're ingraining the winning setups in your brain and this way, you'll act immediately and confident when you see a similar pattern occurring in real-time.
It sets your unconscious mind to play your strategy flawlessly in the markets.
Conclusion
Key-points:
Setting a pre-trading routine is essential for you to execute your strategy at your best;
It reduces the possibility of mistakes;
Set a pre-trading routine that makes you feel confident, motivated and calm;
There's no trader with the same routine, try different tasks and see which ones resonate more with your personality;
Make sure your routine puts you in a mental state where you are 100% focused.
I hope you use some of the tips to incorporate in your pre-trading routine and if you don't have one, here's a nice opportunity for you to start putting one together.
Hope you enjoyed the read!
See you soon ;)
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