The Power of Routine

A trading buddy of mine has recently posted about the problems he has in developing a routine around the other commitments in his life. A good read and highlights that a lack of routine can scupper the chances of a successful trading session, no matter how good the edge and trading plan is.

Habit deprivation is like sleep deprivation

I have found at my stage of development as a trader, that if I do not follow my routine then I tend to have a pretty crap trading session from the point of making consistent trading decisions, following my plan and more importantly updating my plan as more information comes in about the type of session that is developing.

I personally think that everyone’s routine should be tailored to their strengths and weakness.

The way I approached the day is as follows

At the end of the day, I will write out my trade plan for the next day. It would be better to do this the next morning before the session starts so I can include any developments that happen overnight that could affect the Bund when it opens.

The reason I do it the night before is that, I know from my yacht racing days, that my strategic planning can be poor on waking up. How I dealt with that would be to have the current plan written down and the reasons I was following that plan, and with the likely future decisions and the best options are already fleshed out.

These enable me to wake up in a sleep deprivation state and follow a plan without trying to remember how I got to previous decisions and what is the plan going forward.

Sleep deprivation whilst yacht racing is a complete different ball game. I have spent 9 days, only sleeping for 25 mins every 2 hours, which by the way, was complete failure from the strategic decision making point of view (I made bad call and we went from 1st to 9th and then finished 4th), but we was playing cat and mouse with modern day pirates amongst other things.

Getting the most of 25 mins.

So planning before I go to sleep is a habit that I picked up in the past which works for me.

I print out my daily trade plan, as I find it easier to follow if it sitting in front of me and I can take notes on this as the day develops.

When I get up I will come into the office 30mins before the market opens and do the following;

Read my market news to see if anything has happen overnight that could affect my market.

Check the US 10 year T Notes futures to see how they moved overnight, a move in these could affect the opening of the Bund.

I check the daily chart for German 10 year Bond Yield and the ES futures markets just as a reminder of what happened the day before and overnight.

I then read my trade plan from start to finish, circling with pen the first areas of interest and actually looking at these areas on my charting platform.

I then wait for the session to open. I have an intraday trade journal where every few hours, I update my plan and what my trades are for the next few hours. Here is an example of my intraday journal.

I will then take a break for about 45 mins between 11:00 and 12:30, and either exercise or mediate. I find this helpful in maintaining focus during the whole day.

My routine has changed in small ways over the past few years but not in any substantial way.

I have found that when I do the end of day review, that if I have gone wrong somewhere during the day, it can be correlated to me deviating from my routine.

I think that we all have to find a routine that fits our style and provides us with a foundation to make consistent and solid trading decisions.

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