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By definition speculative markets are chaotic and unpredictable. The very lure of reward that attracts you to trading carries the threat of risk that can wreak havoc with both your self worth and your net worth. That is why first and foremost trading requires you to develop an ironclad routine in on order to succeed in the markets.
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Last trade Long AUD/USD +70
My son, to whom I often refer to as an idiot savant ( please no outraged flames, its just family humor) for his ability to so perceptibly analyze human nature while completely failing to analyze even the most basic of problems in physics, was the one who pointed this out to me at a dinner this week.
“Dad,” he noted, “You know how in Millionaire Traders you wrote that an athletic mindset was one thing in common for all your interview subjects? Well what do all athletes do? They follow a routine day in and day out, week in and week out.”
He was indeed correct. Athletes in order hone their bodies follow a very rigorous schedule. I remember one bodybuilder who said that he associated the days of the week not by their name, but by the muscle group to be worked on. So Mondays were for legs, Tuesdays were for lats, Wednesday were for arms and so on.
Such monomaniacal devotion to your art may be well beyond all of us, but as retail traders we can still take some valuable lessons from this approach. Having a well regulated routine – a set time, on a set date, for a set task – is one of the best things you can do for your trading.
Typically, most retail traders review their charts and trades on the weekend in the quiet of their own study. But whatever time you choose, it’s critical that you allocate that 1 hour a week to thinking about what you did and what you plan to do. Those who day trade should create a set time each day to do the same.
Markets cannot be controlled, but your reaction to the markets can be. Trading is a much a game of controlling your own psyche as it is the art of reading the mind of the market. Without a routine you will never be prepared to conquer the challenges that speculation presents.