Hello traders! Before we get to our regularly scheduled newsletter, I’d like start by thanking all of you who voted for Sam Evans and myself in this year’s FXStreet FX Best Awards 2015. We are honored and humbled to be both nominated and to have won this year’s Best Newsletter award. Believe it or not, this motivates us to do even better this year; if you aren’t improving, you are losing ground vs. everyone else!
The purpose of this week’s newsletter is to actually get you started with a daily trading routine, much like a pilot’s preflight checklist. With every pilot I’ve ever had in class, they each agree that they have a routine that they do with their aircraft before they take off. Things like checking oil, fuel, tires, the wing flappy things, etc. help them to determine if the airplane is safe enough to fly in. While trading isn’t quite as dangerous as being a pilot, we should still routinely check a few things before we start firing off trades with our hard-earned money. This daily list will be broken up over my next two newsletters as some of my reasons for doing things might be long winded. Here is part one to help you get started building your own trading routine.
- Check yourself. You should feel good enough to trade, both mentally and physically. If you aren’t feeling 100% you must assume that everyone you are competing with is at 100% which might actually make you a donor/losing money trader today. I certainly don’t mind taking a day off if I’m feeling out of it. Better that than throwing money away!
- Check the balances on your accounts. Depending on how often you pay yourself from your account, you may not need to check this very often. Once a week you should check the balances to review your risk management numbers since we recommend that you only risk 0.5-2% of your trading account per trade, you will want to update your position sizing rules once every week or two to stay current.
- Check any open orders and positions. Obviously, you would want to move any stop losses so you could lock in more profits, perhaps move your profit targets further out (trade management). Also, if you have any order to open a position waiting to be filled, do you still want to get into that position? Perhaps the charts have changed enough to where you no longer believe that order is a good idea; another possibility is that news is coming out that might dramatically affect a position you were considering. You’ll have to decide for yourself if you still want that order out there!
- Check your economic calendar. I’m not a huge fan of stepping in front of a train. If you get into a position five minutes before a central bank interest rate decision (that you were unaware of!) you might be very surprised at how quickly your stop can get hit.
- Check Pro Picks and Power Trader Nation trades. For you non-Online Trading Academy students out there, Pro Picks is an educational tool we offer that helps people look at specific chart setups. Power Trader Nation is an online trading community where students and instructors can interact and chat about trading. I like to find out what other experienced traders are looking at, perhaps to give me trading ideas.
- Check your own charts. This is basically where you start to look for trades to pull money out of the market. Depending on your trading style: day trader, swing or long term, you might be looking for trades every few minutes to every few days. This is where our patented core strategy is applied. Marking up your charts with quality supply and demand zones to help you know where and when to make trades makes trading much easier; we are basically waiting for price action to arrive at one of our zones. When it does, we…
- Buy, Sell or Wait. As mentioned, much of our time is spent waiting for price to arrive at our zones. When it does, obviously we buy in demand or sell in supply. Easy, right?
- Check my stop and profit target orders. We always need to make sure our orders are where we think they are. It is entirely possible that you may have set up a ten pip stop, but you fat fingered the order and put in a 100 or even a 1,000 pip stop! That might be disastrous to your account if things go the wrong way in a hurry. Better to double check than to be sorry. What if you were planning a 200 pip profit target, yet exited with only two pips. Oops! How about if you were expecting to be in a position for several days, expecting to make a few hundred pips-but your stop and profit target were only day orders instead of good-til-cancelled? That could be another huge oops in your account! Most of the time I recommend making your default order settings to be GTC instead of day orders.
So, there is about half of my recommended daily to-do list. In two weeks I’ll complete the list and address any questions I’ve received in the meantime.
Until next time,