Trading is a very exciting activity, however, it could be traumatizing if you do not prepare accurately. Whether you trade options, stocks, commodities, crypto-currency’s, or the much-beloved Forex market, it does help to prepare adequately for the day ahead. I will share 3 tips to prepare you for a profitable trading day.
My trading day begins in on Monday’s and end on Friday’s, although these two days (Monday and Friday) proves to be the toughest days to trade, it does provide some real insights into the week ahead.
Table of Contents
The 3 Tips to Prepare You for a Profitable Trading Day
- Mental Preparation
- Technically Preparation
- Risk Preparation
Mental Preparation for a Profitable Trading Day
The first of 3 tips to prepare you for a profitable trading day is Mental preparation. Mental preparation encompasses the totality of the trader, without the mental fortitude for the task ahead you would fail. I begin my Sundays by listening to motivational messages from some of the world’s top speakers, the like’s of Les Brown, and also reading from the greatest minds that existed before us.
My favorite book so far is one of the hidden gems that are often not mentioned (The Secret of the ages), in fact, you can get to download a PDF for free to read in your free time. While I love to read and do 2 hours of reading each day, I usually prefer to listen to audiobooks or playing videos in the background without watching
I love to stay motivated, and I keep listening to motivational audio tapes through my trading sessions. When life strikes hard at me, I do not go talking to my friends, I put on an audiobook, to listen to masters of the past, who must have gone through the same situation I might be in.
By doing this, My mind is tuned to see the goodness in the day, and my neurons begin to fire and find a way out to cope with the pressures of tomorrow.
One thing I do in addition to this is basically sleeping a lot, Forex trading has the ability to stress the mind in ways you never imagined. You may be wondering, why does sitting down and clicking to buy or sell a currency constitute stress. The truth is that Mental work takes more energy than physical work. Hence you need to give your brain the opportunity to rest, recover, and fire different neural paths for your success.
If you pay good attention to trading, you would dream about charts. The mind is very very powerful if you let it, Indeed, the most profitable strategy we teach during our Forex mentorship class came through discernment in sleep. I find going right away from the chart, and showering, and going to bed right away, is a good way for the mind to decipher what didn’t work and fire the neural paths to look for ways to make you much more profitable trading the Forex market.
Technical Preparation for a Profitable Trading Day
The second of the 3 tips to prepare you for a profitable trading day; Technical preparation. Nothing beats a prepared mind, if you want to trade profitably you can not skip this step. I would share my technical preparation tip with you, and hopefully, help you craft out your own routine.
I look at my previous day, what mistake’s I made that resulted in losses, and what mistakes I made that resulted in profits. Most traders do the former but not the later, however, If you continue to make mistake’s the market would encourage you for a while and eventually crash you out hard.
If you continue making mistake’s it speaks volumes about your discipline as a trader, and as you probably know, an undisciplined trader is a danger waiting to happen.
After evaluating the mistakes, I attempt to identify why I made them, and work out a strategy to avoid making the same mistakes. All these are noted and written down in my trading journal.
The next thing I do is backtest the strategy, to find out which set up I failed to take, and why? I would evaluate, re-evaluate the setup, and make a note in my trading journal as to why I missed it and what steps to take not to miss it at a future date.
If you notice that you kept doing what you thought was right for your strategy, but kept losing out on trade’s, chances are you have a very terrible strategy and it might be time to seek help.
These steps are crucial if you have traded for a long, but if you are a new trader, you might want to go through your strategy before the trading day, run a backtest, and write down your rules for entry and exit. You might be surprised at the number of traders who trade without a rule book, or even worse, those who trade with total disregard for their rule book.
Your strategy is your rule book, without a rule book, you are essentially gambling and need to re-examine yourself. Let me give you a tip on one rule that never fails me; In a buy trend, Never Buy a Higher High, now that is a rule, and that, together with many other rules make up my strategy.
Identify which time you would trade, It is unhealthy to sit by the computer the whole day, I Basically trade the London Session of the market, and so at latest by 1 pm GMT, I am out of the market, taking a shower and going to sleep. I came to the conclusion through years of trading, that I am most profitable during the London sessions, and thus there was no point wasting precious man-hours waiting for the other trading sessions.
My day begins essentially at 3 am and ends around 1 pm GMT, I spend about 2 hours being in sync with the market before the London session begins. Most traders get to their computers and expect a profitable strategy to be available just like that, but the truth is that for the majority of your time as a trader, you would have to spend the time waiting.
By waiting, I mean being in sync with the market, determining where the price would move to a couple of times in what I like to call the shadow mode before actually placing a trade. What is the shadow mode? The shadow mode is noticing a setup, setting your psychological entry point, stop losses and take profits, and watching it play.
The shadow mode takes place essentially in your brain, you want to know if you have synced enough with the market to know it’s next movement before you commit your hard-earned money.
Risk Preparation for a Profitable Trading Day
The third but not the least of the 3 tips to prepare you for a profitable trading day is Risk Preparation; I encourage new traders to ensure they take a thousand trade’s on their account before blowing it, the reason is simple if a trader can go a thousand trade’s he would identify what works and what doesn’t and would grow the account instead of blowing it.
The thousand trade’s challenges usually take a year to complete, over an average of 200 trading days, which means an average of 5 trades a day.
To do this, I divide my trading portfolio into a thousand parts. With a $1000 trading account, a beginner must not lose more than $1 per trade and $5 per day. If you lose your $5 you call it a day and do not trade till the next day.
So ask yourself, how much am I trading, and how much should I risk per trade, with this and the stop losses, you can accurately determine your lot sizes.
What we noticed is that most retail trader’s who blow their account, do not even go beyond 20 trades before blowing the account, and if we can keep you trading over 100 times, you would essentially become better at trading.
These are my top 3 tips to prepare you for a profitable trading day, if you have other tips, do let us know in the comments section.
We would email you of new and promising cryptocurrency projects, legit investments etc. once a week
