One of a trader´s goal is to be consistent and it will be hard to achieve that if you do not repeat the things you did today, tomorrow. By doing the tasks you plan to do, you will be more focused and it is unlikely to forget to do something.
Here are some of the reasons why it helps to have a Routine Sheet:
- Build confidence - there will be times you will not be confident in yourself. By following your routine it will be easier to regain that confidence. I just came back from a trip with my family a couple days ago. My goal for this week was to just follow my routine and get back in sync with the market. You would be amazed how this simple gesture helps your confidence in trading comes back.
- Feel prepared for the trading day - after I have completed the tasks I planned for my preparation before the open, I feel ready to trade. If you feel prepared and confident it is more likely that you pull the trigger when you have to get in and out of positions.
- Trading feels more like a job - by working at home, you can sometimes feel that trading is not a job. Your mind can play tricks on you, and if you believe it is not a job, your mind will make it true and it will not allow you to be successful at it. With the routine sheet, by the end of the day, with the sheet completed you will have that sensation of "job done", regardless if you were profitable or not.
- Evaluation - Instead of just using checks to follow up my execution, I prefer to use percentages. I grade myself on how I feel I executed the tasks. By the end of the week/month I average them to see which tasks I need to work on.
- Avoid overtrading - sometimes to trade is to stay away from the market and be patient. That does not mean you did not do your job if you did not trade today, so if you don´t see an opportunity out there at least you know you did your job.
- Organized tasks - you don´t have to think what you should do next in your day. This way your mind will be focused on the task itself and not what to do next
- Time management - Market opens at 9:30 and you have to be prepared by then. So knowing what you have to do, helps you to manage your time. Sometimes I have to narrow down my stock list, for example, to be ready to trade when the bell rings.
Hope I have you convinced of it´s importance.
Now, this is how you should start creating your own list: after the market is closed (do not do this during trading hours), sit down and just write down everything you did today. Try to put them in the same order you executed and that´s it. As you develop as a trader tasks may be removed or added to your list. Remember the journals should not be static and you have to feel confortable with it.
Below are an extraction of my trading routine to help you develop yours.
If you have any questions let me know.
To go back to the introduction about Trading Journals click me
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