I recently wrote about how to prepare for and start your trading day. As a follow-up to that article, I thought it might be interesting to take a look at my trading day.
I have been in the markets for many years now (a very big anniversary is coming up next year in fact) so I have become a creature of habit, that’s not to say that I don't vary my daily ritual, or routine at all, because I am always looking for ways to make it more efficient. Be that through new data sources, software and tools, or distribution methods.
What interests me
As a market commentator and analyst, I am interested in trends and changes in the markets. And like most traders, I am constantly on the lookout for opportunities. Which often come about when behaviours change. Whether that’s driven by changes in market sentiment, price ranges, or the emergence of new information, such as earnings and economic data releases.
There is so much information available to traders today that I find it essential to try and be systematic about the way I approach the data lake. Otherwise, you could end up drowning in it.
An early start
As I said after a long career in the markets I am a creature of habit. Though some things have changed over the years, for example as I mostly work from home these days I don't commute and I manage to get a bit more sleep. As a result, I wake just before 6.00 am, and the first thing I do is to get a cup of coffee.
Once that’s made, it's time to get to work: Initially, I look to see if anything dramatic happened in Asia overnight. I’m in several trading chats and discords, some of which have members from Australia and the far east, so if the dial’s shifted, then they will have commented on it.
I think it’s fair to say that Asian markets havent been that influential in 2023, though of course we always need to watch what the central banks like the BOJ, PBOC and RBA are doing. Particularly if they act outside of their scheduled meetings.
Having checked on the Asian markets I take a quick look at global commodities such as Oil gold, and natural gas, in its various flavours, and note any major changes there and in the forex, bond and equity markets.
News, Headlines, Signals
Next, it's on to the news and headlines. I tend to scan through these picking out those stories that are of interest to me and sharing any that I think my fellow traders might find useful.
I will come back to the headlines and stories that have caught my eye later on.
Soon after 7.00 am, I start composing a daily email. This is very much equity-focused and data-driven. I take a big picture top-down view looking at indices and sectors, I note volumes traded and the number of rising or falling issues, as well as the number of new period highs and lows etc.
I also usually get to see a list of early broker calls which shows me how the market is pricing stocks with news out, or those with broker or press comment on them.
When I do look closely at individual stocks, it’s often through the lens of signals and indicators, such as the golden or dead cross, or stocks that have an RSI 14 reading that’s reached an overbought, or oversold level.
However, I won't normally investigate those until a bit later in the morning, as I want to get the UK and European open out of the way first.
By around 8.15 am we’ve usually cleared the open away, and I have shared my daily email with my clients and contacts. I take 15 minutes or so to review any broker research notes I have received, though there will be more of those throughout the day.
Next, it's time for breakfast and a bit of exercise, walking the dog around the block.
Digging deeper
Back at my desk soon after 9.00 am, I take the opportunity to look at what's moving in the European session at both an index, sector and individual stock level. I look at outright price changes, but also which issues are trading greater than average volumes, if any.
Then it's time to look at those overnight signals. The quickest way to do this is to look at the charts. I create a watch list of tickers and I quickly skip through the charts, noting any that catch my eye. I’ll circle back to these after I have been through my lists.
Typically I will set price alerts at levels of interest in the names, whose charts caught my eye. And I leave a few notes to remind myself what it was that drew my interest in the first place.
Here’s an example in US listed McDonalds (MCD), which recently posted a dead cross (the 20-day MA line crossing down through the 50-day line). I have set a price alert at $286.00 as I feel there coud be downside potential below there. I am not sure what the catalyst might be, but I’ll be prepared if one shows itself.
Barchart.com
The rest of the morning is taken up with writing, analysis, answering questions and mentoring traders in the various chat groups.
I will also try to fit in a bit of reading, I have started to use AI chatbots to summarise large research notes which are TL;DR, and to highlight common themes and trends across notes from different brokers. However, in truth, there is no substitute for reading the reports that interest you, for yourself.
Preparing for the US Open
After lunch it's more of the same, looking at and sharing US pre markets calls and headlines, reading any earnings or economic releases, commenting on those, and highlighting any opportunities or surprises in the news and numbers.
Once Wall Street opens, I have a look to see what's moving and what’s trading good volume. I also take a look at the performance stocks that I’ve noted or short-listed in recent days especially if they have triggered an alert
There is often quite a bit of activity and idea swapping on the trading chats and discords in the first hour of US trading, though that tends to quieten down as we approach the UK and European close.
Once or twice a week I am asked to appear on business TV to discuss various aspects of the market, so I need to make sure that I am well-prepped for that
I officially sign off around the UK close, but I do dip in and out throughout the evening, taking a last look at the markets around 10.30 pm before turning in for the night.
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