I recently watched a documentary on Bill Gates on Netflix, and one of the things that stuck with me the most was how he became one of the richest people in the world through luck and a huge inheritance. It is not. He literally reads 8 of his books while traveling, in an hour he can read 150 pages and enjoys learning. One of his close friends said, “Bill always knows more about any topic than the person he’s talking to.” What does this have to do with trading? All…
The key to trading success is to become a profitable trader by learning proper trading and consistently training yourself to follow an effective trading routine until it becomes a habit.
Here’s what you need to know about trading routines: A trading routine is the real key to market success. There are no magic indicators or algorithmic trading robots that will make you an easy and profitable trader. Just as Bill Gates’ daily routine over the years led him to insane financial success, so does your trading routine. However, if you don’t have a routine, or if your routine is wrong, you will never be a successful trader. Could Bill Gates have been watching TV eating Cheetos all day instead of reading everything he could get about business and programming? If Bill Gates had done that, I wouldn’t have known who he was.
There is a “fire” inside Bill Gates. The desire to learn, grow, and become more human seemed partly innate and partly developed throughout childhood. I cannot provide this. If you don’t have one, you should develop one. But while it can provide a framework that is, so to speak, the ‘key’ to the ‘kingdom’, it takes the right trading mindset to be able to ‘turn’ the key. So, if you’re ready, read on and learn about a daily trading routine that’s worked for me over the past 10+ years in the market…
Key elements of my daily trading routine
- My trading routine involves far less market interaction than many other traders. This works for me, and I’m sure it will work for you because: You dominate the market.
- My overall approach is to focus on end-of-day data. That is, focus on the daily chart timeframe and usually wait until the market closes each day to actually sit down and take a closer look at the market on your watch. list. This is what I call a part-time trading routine, and not only does it have the benefit of less screen time (so you can do other things), but it does the very thing of spending less time in front of the charts. Facts really improve. long-term trading performance.
- I’ll take a weekly view first: check the weekly chart timeframes, draw key levels, get a feel for short-term and long-term trends, and note any obvious/large price action reversal signals. .
- Next, we will look at the timeframes of the daily chart. We primarily look for critical levels of support and resistance, current and recent market conditions. Trending or sideways? And last but not least, we are looking at PRICE ACTION. Are there any signals that may have formed near key levels? Are there any signals that have formed after a pullback to a level? Note: Levels are horizontal levels of support or resistance, or EMA (Exponential Moving Average) or 50% retrace level.
- Now, since this is just a blog post, I should ‘quickly’ walk through some of the more in-depth topics like money management, trading psychology, stop-loss placement, etc. but follow the link I provided , you can learn a little more. Of course, these topics are covered in depth in my professional trading courses.
- What’s the glue in all this? My entire trading process? Simple. It’s routine-discipline-habit or RDH. Let me explain this (important) – remember I mentioned Bill Gates earlier? Bill Gates probably has better habits than you (or me, to be honest). So does Warren Buffett. The world’s elite, those who have amassed enormous wealth or otherwise succeeded in their craft, have reached that point through routines that take habitually unusual discipline. That’s what I need. Bill Gates doesn’t read a lot of books because he hates them, he reads them because he really loves them! If so, you must love them. Good trading habits are what bring wealth in the market. There are no easy ways or shortcuts except to really love the process. And remember, I can show you my process, the process that worked for me, but it’s up to you to love it.
My daily trading process: chart analysis and trade execution
The first major charting aspect of my trading routine is to take a “big picture” view of the markets on my watch list. This usually means starting with the weekly chart timeframe and starting over. I am primarily looking for key levels, major turning points, trends and areas of consolidation in the market to watch. I always mark the important levels on the weekly chart first. An example is shown below.
We then drop it down to the daily chart timeframe and start analyzing it in a very similar way. The weekly major levels may need to be adjusted slightly daily or additional levels drawn depending on price movements.
Right now I’m analyzing short-term market conditions to determine the best direction to trade and which levels/areas are most worth watching. Use it often to see short-term trends and momentum. You will also want to learn how to identify periods of highs/lows highs and lows highs/lows. You can learn more about this in my article on how to identify trending markets.
Last but certainly not least, I’m looking for price action signals/potential trades. I’m looking for a “no” signal.
- What you see in the chart above is a quick overview of the weekly/daily chart analysis routine we do for all markets on our watchlist. If you don’t have a watchlist, read about creating a market watchlist.
- The market has tiers. Explore your favorite markets in your watchlist to get to know them and get to know them. If some or most of them are in a bad trading phase, or have choppy lateral integration, then you just glance at them and walk away or don’t even check for a few days. Or the condition is if it is trending or the market is trading in a very clear and large trading range.
- I can’t get this in my head enough: Most traders lose by looking at charts too much! Markets are not meant to be casinos, so don’t treat them as casinos. Don’t get carried away with it! Treat the market as a way to show how organized, skilled, and disciplined you are.
How to find, set up and execute deals
Now, after completing the above steps, let’s say you have found a potential deal. Here’s how to set it with an entry, stop loss, and profit target placement…
- Notice the “Price Action Signals” on the chart below. This was technically a bearish tailbar followed by a pinbar signal and also an inside bar within that bearish tailbar. The price consolidated for several days before finally falling in the existing downtrend.
- There were multiple confluences of levels and trends as the price pulled back to resistance at the 21 EMA (blue line) and the horizontal level at 1.1250.
- A trader could have made a profit of 2R from this trade if he had held it for 3-4 weeks after entry. This is why I always preach the set and forget the deal.
- This example shows a clear pinbar sell signal formed within a downtrend at resistance (both horizontal and Ema lines). This was a very clear and obvious trade for the savvy price action trader. The stop loss is just above the pinbar height and 2-3R profits are easily achieved if you hold the trade for a few weeks. I got
- Here’s an interesting “twist” to the last deal above. Note that the entry was created as a 50% retrace entry in the tail of the pin bar.
- This entry allows for a tighter stop loss, increasing your potential risk/reward, or you can use a normal width stop to give the trade more breathing room. In this case, it indicates a tighter stop with increased risk reward. 6R was possible here!
Today’s lesson showed how I personally analyze the charts each week and gave you a “peek inside” of my personal trading habits. Hopefully, reading (and reading) today’s lesson has given you a better understanding of why you need a daily trading routine and how to develop one.
The daily trading routine above is the core foundation upon which all my trading is built and I believe every aspiring trader needs such a foundation to build a trading career. market.
Many of you know that we publish our daily market commentary shortly after the daily forex market closes. ) is also part of my daily chart analysis and trading routine. I actually started writing down my thoughts on the daily market long before I started this website. This is what we have been doing continuously every trading day for the last 10 years. It’s literally a habitual part of my daily routine… if I miss a day’s commentary for some strange reason like travel or vacation, I literally feel ‘weird’ and like I’m ‘missing’ something I feel. You should get to that point too.
For ongoing help and assistance in learning to trade, analyzing the market, discovering trades, and building your own personal trading plan, my daily commentary and member analysis will be published in Rolling Markets. ) is a good example of how to perform the analysis. in real-time conditions. This is something you can learn from me and mimic in your charts. I encourage you to “watch over your shoulder” each day while I analyze the charts and plan trades in the member’s daily chart analysis area and trade ideas newsletter.
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