In-depth Analysis

How to structure your trading day or week

Becoming a successful trader is a journey and one where we need to learn from our experiences along the way, which of course means there are few shortcuts if any. However, there are things we can do to make our journey more straightforward and easier to navigate. 

Success and longevity in trading come about because traders adopt a disciplined approach they follow rules for each and every trade, they review their strategy, the markets and their trading ideas on a regular basis and they try to avoid emotions good and bad in order to retain their focus.

Traders need to develop an edge or at least give themselves the best chance of making money when they trade.  In practical terms that can mean using the right risk-reward ratios and position sizes, having a limited number of trades open at any one time and avoiding correlated trades and instruments that can duplicate or intensify risk.

However, there are lots of things we can do to improve our trading that are not directly related to the markets. One of those is to plan our trading week and day. Plans will vary between traders and each of us will have their own circumstances.

The first thing to do is think about when we are going to trade and where from? 

Yes, it’s true that using a smartphone or tablet and trading apps you can trade from anywhere you find a reliable high-speed internet connection. 

The fact that you can doesn’t mean that you should. 

The portability of modern trading software means that you monitor markets and positions on the go, but you will still need to be able to concentrate and focus where ever you are.

What many established traders tend to do is to set aside time in the week and often at the weekend to study the markets. 

And that makes sense because it’s one of the few times when the FX markets aren’t moving.

And if you find an hour or two to sit down to look at charts and the ranges within them you can start to plan – make a few notes, record the period highs and lows and other key levels in the instruments you trade, and do that for a variety of time frames weekly, daily, hourly etc.

By looking at charts over multiple time scales you start to get a sense of what the opportunities are in particular instruments, and because we have highlighted and recorded levels of interest in them, we can set alerts to notify us when those key price points are reached or broken, which of course is very useful information.

While we are researching the markets it makes sense to look at the economic calendar and note the key releases for the coming week, high impact data points can move the market, particularly if they surprise or deviate from expectations. 

So why not get to know what the expectations for the data are, and what the recent trend in the data has been. A good tip is to add a reminder on your phone to prompt you on the day of the release perhaps 30 minutes before the news is due.

If you trading from one location whether that’s full-time or just a few hours each day, think about your trading environment.

Is it somewhere where you can concentrate and be free from distraction? Is it comfortable?

You’d be surprised about how much difference having the right chair and the display of your PC or laptop at the right height can make. Even small changes to things like the way the desk faces and the lighting of the room can make a difference. 

For example, I used to face the window but now I have my desk at a right angle to it. As a result, I now have a better view and more natural light hits the desk. 

These small changes can make a difference simply because trading can be stressful and we want to be in as much of a stress-free environment as we can be when we do it.

To help reduce stress and emotional trading particularly if you are trading full time make sure to schedule regular breaks throughout the trading day. Go and do something else for 20 minutes even if that is a few household chores, or making a coffee and walking it around the block.

Some people like to listen to music or a podcast about an unrelated topic. 

What we want to do here is to break up the day particularly if you have had a few losing trades – otherwise, it’s all too easy to chase those losses and ignore your trading plan and you may end up compounding them, rather than gaining them back.

Don’t isolate yourself either it’s very easier to be consumed by charts and prices and hours can literally fly by if you are. Trading can often be seen as a lonely pursuit but these days there are many online trading communities where you can chat and swap ideas with fellow traders. 

But once again don’t spend all day in the chat room either- make time to respond to messages from friends and family or give them a call when you take a break. 

You are likely to feel better for doing it and if you are in a better place then your trading results should improve too.