To get into the zone for day trading, I recommend having at least a 5-minute pre-trade routine that you do before you start looking at charts or placing orders. The routine gets you into the proper mind frame: focused, detached from results, confident (not overconfident), alert, and ready to pounce (but not anxious or fidgety).
Here’s my quick morning day trading routine that I do each day. The activities are:
- Clear negativity, increase confidence, reduce stress
- Trading Plan review
- Strategy visualization
- Reinforce Dominant Trading Themes
- Parts Negotiation
Here’s the summary. More details are below.
Pre-Trade Routine: 2-Minutes to Clear Negativity
When you sit down, I recommend at least 2 minutes of getting yourself into a neutral state. We don’t want to be over-eager, anxious, or over-confident. We want a state of mind where we are alert and focused, but not stressed.
One of the easiest ways to do this is to hold your hands above your head, like you just won a race, while doing deep breathing and getting that calm feeling in your head.
Why hold the hands above the head? Because it works and I find it’s one of the quickest ways to get rid of any negative thoughts before I start trading. And there is actual science to back this up. Holding your hands above your head increases testosterone and decreases cortisol (stress hormone). Check out this Ted Talk on it. Do this before any potentially stressful activity to feel more calm and confident.
I don’t want to get “pumped up” though. Trying to ramp ourselves up can have a negative effect in that we try to force trades or get too aggressive. Aim for a neutral state. Ready, poised for action, but not anxious or arrogant.
A pre-trade routine is just a small part of being a successful day trader. In the Price Action Stock Day Trading Course, I discuss strategies for capitalizing on price patterns that occur over and over in stocks.
2-Minutes: Day Trading Plan Review
Then, spend 1 to 2 minutes going over your Trading Plan. Review the basic setups, why you trade those patterns, and when you don’t trade. I recommend writing up a summary one-page sheet with pictures of your strategies, and any pertinent things you need to be reminded of. Keep this page by your desk, and glance over it during this 2-minute section of your pre-trade routine.
It seems so simple, but you don’t want to skip this step. I have my summary trading plan sheet beside me, and I force myself to read it every day. Even though that means reading it a couple of hundred times a year, it is worth it. Because on that sheet I put all the important things that I need to be reminded of. It lists the strategies I trade, how and why I can get out of trades, when I don’t trade, and other tidbits that I need to be reminded of.
As I quickly review this one-page sheet, I verbally reinforce that this is how I trade, the ONLY way I trade.
Update this page with pertinent information for how you are trading now. Maybe you used to struggle with timing entries, so you had some points to remember written down on this page. You no longer struggle with that, but you have been struggling with taking profits at the correct time (according to plan). Write down some things to focus on/work on in this regard. Review it each day, before trading (and possibly at other times as well) to try to improve this area of your trading.
1-Minute: Strategy Visualization
Spend at least 1 minute visualizing a trade for each pattern in your trading plan. For example, the price is moving strongly higher. It pulls back briefly and then moves quickly right back to the high. It pulls back again, and you now know you have a possible Double Pump strategy setup. The price pulls back to the prior low and then starts to rally. You enter, place your stop loss correctly, and your target is set. The price wiggles around, you have an impulse to get out, but you stick with the trade and it hits your target. Also visualize a trade hitting your stop loss, and being ok with it. You executed the trade well.
Do that for each of the patterns. It’s just a quick little visual of maybe 10 or 15 seconds on each pattern. You can also visualize losing some trades, and being non-reactive. Losing trades are part of trading too. When we visualize a winner or loser, we see ourselves reacting calmly.
Feeling More Ready to Day Trade
That’s it! This pre-trade routine for day trading will help you get into a better mental state. A state where you are ready to pounce when opportunities occur but don’t feel a compulsion to trade when there aren’t any opportunities.
The more focus you put into the routine the better it will work. Actively engage your mind in the process. If you just do it on auto-pilot because you feel you have to, it won’t help you as much.
While this basic routine is suitable for most of my mornings, if I feel a bit off, I may need to extend my morning day trading routine and include some additional elements.
Update the routine regularly to keep yourself engaged in it and working on particular things that are relevant to your trading right now.
Optional: Reinforce Your Dominant Trading Themes
I like to have a few thoughts that help me handle some of my major trading struggles.
For me, like many traders, I sometimes think that the price has to move in a particular direction. I get over-confident that the price action will do what I expect. My job as a trader is not to determine where the price will go (that is the strategy’s job, which has already been tested and proven to have a profitable edge). I simply trade my valid trade setups as the price action produces them.
Therefore, I try to limit my biases and expectations about what the price will do.
I also need to remind myself that I don’t need to re-invent the wheel each day. I just need to follow my plan to make money.
Each year I buy a little day planner and each day I write about 5 lines with my thoughts and things I need to focus on for my trading day. The wording may change daily, but the general idea is the same. Here is an example:
- I have no expectations. The market will provide what it does. My only goal is to execute the plan.
- The plan works marvelously over many trading days when I follow it.
- I enjoy doing this. I appreciate that I get to do this.
- If conditions are good, I take the trade. If conditions aren’t good, there will be better opportunities later.
Write whatever comes to mind as it relates to what you want to focus on. This probably takes 1 to 2 minutes but I find the exercise reinforces what I need to work on.
Optional: Parts Negotiation
The Trader part of our mind should be in the driver’s seat when we trade. If other parts of us are butting in, or our everyday life is encroaching into our trading time, we need to handle that. We do this with a parts negotiation.
For example, maybe you had a fight with your partner the night before or this morning, and you are feeling unsettled when you sit down to trade. Your mind is not focused on trading. That part of you that is still upset/angry/sad is battling your Trader for your mind’s driver’s seat.
Do a Parts Negotiation. This is where you basically have a little negotiation between your Trader and the part that is taking your focus and attention away from trading. The initial goal is to quieten this other part so that we can focus on trading. The ultimate goal is to feel in harmony with all parts of ourselves.
If we can’t quieten the voice/part, then we don’t trade. And that is fine. That is our body and mind telling us that we have something more pressing to deal with than trading right now. Deal with your shit.
Here is an article and video on Parts Negotiations called Why We Mess Up Trades and What to Do About It.
Final Word on a Day Trading Morning Routine
This is how I spend about 5 to 7 minutes before I start trading each day. When I go through the routine I feel more ready to trade. I am more likely to make better trades and leave poor trades alone. The routine also helps warm up my mental trading muscles, so that when I open my trading platform I am ready to go.
Also, the day trading morning routine is a great opportunity to work on problem areas by reinforcing what we should be doing. Your issues won’t go away unless you bring steady focus to them and work on them daily.
Customize the routine to your liking, so that every day it is making you a better trader.
The EURUSD Day Trading Course teaches you how to day trade the EURUSD in 2 hours or less a day, although you can certainly trade longer if you wish.
By Cory Mitchell, CMT