Top 5 Trading Routines Successful Day Traders Perform

Let’s talk about the top five trading routines you can use to develop trading discipline and improve your trading skills!

You know, there’s something profoundly human about keeping routines. Think about some of the routines you keep. Whether it’s brushing your teeth two times a day, having a coffee while reading a self-help book in the morning, or going to the gym four times a week. Perhaps at first when the routine was new, it took more time than it does now and there might have been some

 psychological push back against doing this thing on a regular basis. But over time, you got used to the motions, you memorized the steps of the routine, you were able to start performing the task without effort, and the energy required to start it is no longer demanding.

There are so many things we need to do to survive and stay healthy, so it kind of makes sense, biologically speaking, to be able to become accustomed to a routine in a way that requires less energy and focus to perform as you continuously do it over time. I’m here to tell you that trading well is no different from other routines that keep us well and healthy over time. There are certain things successful traders do consistently which losing traders don’t do frequently or fail to do at all. We’re going to go over the top 5 key trading routines you can keep as a day trader who is aiming for success

Let’s dive in!

Trading Routine #5: Recording the outcomes of your trades in a long-term trading log

Do you know, right now, how much you have returned or lost this particular month? Or how many trades you’ve taken so far? If not, it’s time to start recording your trades in a long-term log. A decent trading log should consist of 3 things:

1. Information from each of your individual trades

2. A breakdown of your return and loss from each week

3. Any deposits or withdrawals from your account.

The purpose of a trading log is to be able to track the return from each of your trades, as well as keep an account of your brokerage account balance. Most of the time, your brokerage can provide this information for you, but it’s a good practice to record this information for yourself so that you are sure to review it and reflect on your overall performance. I find I keep better records when I record my trades after each trading session, but you could also record them once a week, like on a Friday to tie up the trading week, by referencing the data from your brokerage firm.

Trading Routine # 4: Prepare for the week ahead

This routine is not as structured as the last routine, but that depends on what you need to do to prepare for your trading strategies. This could involve preparing on a 

Sunday morning or evening by checking the economic calendar for the week and writing these times down. It can also involve setting an intention for the week ahead.

For example, if you got too greedy and held past your take profit the week before, you can write down an affirmation that you will be vigilant to avoid doing the same thing this week. I like to trade with the same position size all week, so I’ll usually write down and preset my order sizes based upon the amount of money I choose to risk for each trade. This is also a good time to draw any support or resistance levels from the daily and weekly charts if that’s a tool you like to use to trade.

Trading Routine #3: Mentally Prepare yourself before you trade

Think about high performers. A lot of athletes talk about having mental prep sessions before a game where they help themselves get into a zone. It can be a song that helps them pump up or a warm-up routine that tells their body it’s game time. Remember, your ability to stay level-headed and disciplined while you trade is crucial to your success. So perhaps instead of getting too wired before you trade, you’ll want to keep a start-up routine to help you get centered and focused. You can meditate before you trade or write out a declaration for yourself that you’ll say aloud, promising yourself that you will follow your trading rules today. This is also a good time to quickly reflect on the biggest trading mistakes you want to watch out for. 

So too, performing a visualization of yourself following through on your trading rules can also be beneficial. By the way, if you want a free checklist to help you follow through on some of these daily trading routines, you can download it here. Your headspace is the worst place to store your ideas and commitments. It’s better to have visual reminders of what we need to do to succeed and checklists are a handy tool used by professionals to ensure they follow through on their services. Okay, let’s move on!

The next two routines we’re really hard to rank. I couldn’t decide which one is more deserving of the #1 spot. But I think I made the right choice and I’ll tell you why soon. 

Trading Routine #2: Journal your trades

This is different from keeping a trading log.

A trading journal is where you can record not only the data of your trades but also any thoughts or emotions you had while you traded. Since intense emotional experiences are often the reason why many of us make mistakes while we trade, it’s helpful to write them down so we can discover what mental states or situations we need to improve.

For example, you could be waiting to take your stop loss, but as the price gets closer, you decide to move it out of the way to another price that is risking two to three times more than what you intended. During that moment you may be feeling intense anxiety. That’s one of the best times to write down what’s going on and why you’re feeling that way. Getting this out on paper may help you recognize that this is an emotional reaction and help you return to your rules.

That’s also why I like to add my trading rules to my trading journal so I can see them while I record what’s going on. If you want to see an example of this, I made a free trading journal for the once-a-day Disciplined FX scalping strategy I posted here on the Disciplined FX blog.

When keeping a trading journal, be sure to fill it out every time you trade, while you’re trading. Some people, myself included, like to take screenshots of the trade and store them in a distinct file on the computer. This is helpful for recognizing patterns in the market and in your trading behaviors. However, there’s one more thing you need to do with your trading journal and that helps us segue to the #1 routine on this list

Trading Routine#1: Review Your Trades

The top routine you can keep for your trading practice is to review your trades. Now, it’s a lot easier to review your trades when you have a trading journal and a log. But the reason why a review session is number one on this list instead of journaling your trades is that collecting information can only do so much for us. We have to analyze and act on the data we collect in order to make the best use of it. For this routine, I recommend sitting down either at the end of the trading week or right before your next one and go over every trade you performed that week. Look at each individual journal and notice what kinds of thoughts and feelings you experienced with each trading day. If you saved screenshots of your trades, go over these as well. Pick out which trade was your best trade (that is, the one in which you followed your rules to a T), and which one was your worst. Notice what mistakes you made and think about ways you can improve. This is also a good time to calculate your profit and loss for the week. I like to review my trades on a Sunday evening so that they are fresh in my mind for the week ahead. 

So, let me know in the comments below which trading routines you want to focus on including in your trading practice. Are there any routines that I missed that you think also belong on this list? Your insightful and respectful feedback is always appreciated!

If this is your first time thinking about keeping trading routines, I recommend beginning with the top two, which is keeping a trading journal and reviewing it once a week, because this practice will have the greatest effect on your trading discipline and confidence. By examining what’s going on when you trade, you can help dispel some of the confusion and anxiety that comes with learning how to trade. I hope this list has you thinking about the ways you can structure your trading for success. 

Best of strength and luck, and I’ll see you out there in the markets!