Before every trading day, it can help to take a few minutes to run through a pre-trade routine or checklist to help minimize errors throughout the day. Depending on the market you trade, you may wish to add a few additional steps to the ones shown. The process of running through a routine only takes a couple of minutes, but might save you some frustration and money. Check your economic calendar before trading, and note the high impact news-times. For U.S. stocks and futures, Bloomberg is a decent choice for news. For Forex, check out the DailyFX economic calendar. If you trade individual stocks on a regular basis, check that the company doesn’t have earnings or other announcements due out that day. The Yahoo! Finance earnings calendar works well. Be aware of these times, to avoid trading before announcements. If day trading futures, make sure you are trading the correct highest volume contract. Be aware of expiration dates on the contracts you trade. If the event occurs later in the day, scroll over and put the text note near the approximate time of the announcement. That way you will see it when the time comes. If trading with a “robot” or scripts, make sure all settings are accurate and scripts are loaded before starting it. Proper position sizing limits the risk to a small percentage of account capital, such as 1%. If you have a $35,000 account, you can risk up to $350 on a trade. Keep this maximum risk in mind throughout the day (or write a text note on your screen) to remind yourself this is the most you can risk on one trade. Such an assessment lets you know how to proceed, and whether you should be trading your system at all. This is especially important if using a subjective system—a system that varies slightly based on market conditions. For example, in volatile conditions, you may have a larger expected profit target than on a day when there is almost no volatility. If you notice this tendency, try to stop trading. Write yourself notes, set reminders or alarms, and make sure to include it in your routine as a reminder every day. As you start looking for potential trade setups, keep your key trading thoughts in mind. This will help keep you out of trades that are not in your trading plan, keep you alert and ready to pounce on good opportunities.
