Morning Routine

I have been asked a few times about morning routines and prep for trading. It’s been said you are what you do repeatedly and that success is just a habit. We, are creatures of habit. Actions repeated therefore become habits and habits eventually become rituals and rituals set the tone for whatever coming event we are about to engage in.

My routine has varied over the years. It has changed depending on what time zone I lived in and I have traded and lived from the East Coast, to currently trading in Mountain Time living in Colorado. I have not lived on the West Coast but have traded from there in the past. My hat is off to them as the market opens there at 6:30 AM!

When I lived in Central Time Zone I used to get to work early and do an hour or so of market prep, or so I thought. It was really a waste of time. Nothing I did changed what the market was going to do at the open and I have learned over the years that even the best mapped out plans can go right out the window as soon as the market opens.

Really though, there are two separate things to consider when we look at market prep. There are the technical things we do to prepare for the market and our trading and there are the physical/emotional things we do to prepare. It’s been my experience the earlier the time zone you are in the less time you will have for the physical prep unless you want to get up at 5AM. Some do and enjoy early rising. I did it for years and am at a point where I don’t need to get up quite that early. Let’s look at the simple market/technical prep that I do.

I get to my desk around 6:45 to 7:00 AM. I do not get there any earlier because I don’t need to. I open the room when I get in and take a quick glance at the market just to see where we are and check the volume. Are we Up, Down, or around unchanged and is volume high, low or average.

My actual market prep consists of going first to my 60M chart. That is where we get our targets from and our main support and resistance levels. I will run through my 60M ┬áS&P chart review and adjust/add lines and 50% levels on the 60M chart (see the video). The next thing I do is to look at my 3M S&P chart and see what the indicators, swing trend, market structure, etc. look like, without judging or analyzing, just look at it. Then I move to the 3M YM (emini Dow Futures) and see if the YM looks just like the 3M S&P. Are both sets of indicators UP, Down, or flat. Is the YM positive on the day (above the prev close) or negative on the day (below the prev close) and is the ES, or emini S&P the same. There are days where the YM stays above the previous close all day and the ES below the previous close. That is what I call “out of sync” and it will be choppy and follow through for our trades will be more challenging. I make sure both markets look the same and if they do, great. If they don’t , I will make note and proceed with caution.

Next I will look and see what news events/reports will be coming out AFTER the open. As we do not trade premarket, we don’t worry about news before the open. Whatever happened as a result of a premarket reports will be apparent on the chart. I note the reports coming out after the open and the times so I won’t be caught in a position when one of them comes out. And lastly, I check my “bar timer” in NinjaTrader and I make sure it is in sync with the market. It goes out of sync just about every day. A small annoyance considering how great NinjaTrader is overall. So I set my NinjaTrader bar timer by clicking on my PC clock in the lower right of my screen, and go to “Date and Time Settings”, then click on the “Internet Time” tab, and then “Change Settings” button. And finally “Update Now”. It will usually say “successful” or if it was not successful, I will hit the button again. Sometimes it does not sync. I can either change the drop down menu Server from to, or some other and try again, or just come back later. 99% of the time it will work just fine.

So here is a recap of the technical:

60M Chart Review, 3M ES Review, 3M YM Review, check for news, Set my clock. Though it seems like a lot it normally takes me less than 10 minutes to do all of those items. Which is why you don’t need to get to your desk hours before the open. 10 minutes is all you need to prepare the entire day.

Physically/emotionally: This prep is a personal prep. Some might take a walk. Some might go to the gym if they have time. Others may sit and read something inspirational. The idea is to quiet your mind, clear your head of distractions. Exercise, meditation, instrumental background music, a desk clear of clutter. I am a big proponent of organized spaces. A cluttered desk is the sign of a cluttered mind. Trading is challenging enough without having reminders covering our desk of all the other things we have to do in addition to our trading. One thing I do not recommend is rolling out of bed stumbling to your trading desk and risking your money. It seems obvious but I have done it. Alarm did not go off, over slept, whatever the reason it is definitely not a good strategy.

Food: This again is personal. For years I was not a big fan of breakfast. But I realize blood sugar is low coming out of bed and we want to stabilize that, NOT spike it with sugar laden drinks, foods, or those that are full of caffeine. I have never been a big coffee drinker but a few years back when I went on a serious exercise program I used the thermogenic effects of caffeine to get below 9% bodyfat. That was OK for the short hall but I did find that I traded much better without the caffeine. Some of you are already going “NO….I won’t give it up”. That’s fine, I am just telling you my experience now and that I am a better trader without coffee of any kind (I only drank iced coffee). Its also acid forming and highly inflammatory and causes a host of other issues but that’s not the point of this article.

However just like in trading one size does not fit all and you have to find what works for you. Just be aware that waking up is a process and food/drink can make or break you as far as your ability to focus and concentrate.

You want to give yourself the best possible advantage to succeed in a highly demanding career called trading. If that means adjusting your diet, your caffeine intake, your water intake, so be it. I know when I am at my best physically, I am at my best trading. At least 8 hours of sleep a night. That is huge. Many studies have been done and the average American is constantly in a mild to severe form of sleep deprivation. I know you may not want to hear it but it will affect your trading. I am a better trader on Monday than I am on Friday because fatigue is cumulative and by Friday my reserves are low even following all of the above.

I encourage all of you to rate yourself when you come to your trading desk. On a scale of 1 t0 10. If you are 3 or 4, don’t trade. Something is going on and just take the day off. Most of the time you will be bewteen 6 to 8 if you are honest. And you will have 9 or 10 days. Those are the days where trading will seem effortless. Take note of that as you will quickly see that trading is deeply affected by your well being and you will strive to keep yourself above an “8” knowing you will be a much better trader.

So there you have it. Some thoughts on market prep both on the technical side and on the physical/emotional side.