Tuesday, October 02, 2012
Sharpen Your Forex Day Trading Routines
As forex traders we need to be prepared for the trading day and trading week. One way to become prepared is to have a routine that we go through on a daily and weekly basis. This routine does not need to be extensive or time consuming but it does need to have some elements that will make your trading day a bit easier.
A routine that we do on a daily and weekly basis needs to help us in becoming better traders. It should be set up to prepare us for the upcoming week and each day. I would suggest having both routines written down so you can approach them as if they were a checklist of things to do. Below I have listed some of the things you might want to consider placing in each one of these routines. This is a suggestion of topics to be included in each routine, not an exhaustive list. You can add to, adjust or modify it to fit your specific needs. Remember, the purpose of a routine is to help you become more proficient as a trader and to make your day a bit more organized.
Daily Trading Routine
Check current positions – I put this at the top of my list for several reasons. First, it is what I’m most interested in checking. I want to see if they have hit my targets or stops. I want to know if I need to make any adjustments to them. It is the top priority, something I need to look at before I do any new trading.
Check account risk – I want to then look at the amount of funds that I have available to trade. If I am at my maximum risk level then I need to know I cannot trade. If I am at my limit of risk I need to make sure I do not add to it even if it looks like a good trade.
Check news – I want to know what reports and new may come out that can impact my positions.
Look for new trades – Once I know my current positions are taken care of and that I have available risk capital for trading, I want to spend my time looking for new opportunities. As part of this I have a routine for analyzing trades that I would start to use in order to find new trades.
Weekly Trading Routine
Review past trades - I will take some time on the weekend to review my trades of the past week. I want to know if I followed my rules or not. I want to know what I should have done better and what I did well. I use that information to help me know where I need to improve.
Review Stats – I will take an look at things like my win/loss ratio, my average wins vs. my average loss, consecutive wins and losses and my expectancy to make sure I am trading well. I will also determine what my actual reward to risk ratio is.
Weekly news – I will review the upcoming news for the week and mark it on the calendar so I don’t miss any important releases.
OK, so that should give you an idea of what you should be looking for when creating your routines. Take some time to sit down and write out what you are going to be doing each day before you trade and each week before the market opens. If you can do that you will be setting yourself up to become the most successful trader you can.
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