20 Habits that are essential to becoming a Highly Profitable Trader (assuming you don’t want to fail)
There is a lot of advice out there on how to be a better trader. This is one of the highest quality lists we’ve seen. Most of trading is about getting your process right. The below list provides an excellent foundation that you can use to build the right processes into your trading career routines. Enjoy and let us know what is missing.
Use a Journal:
- Add to it daily
- Archive a setup that makes the most sense to you
- Reverse engineer the best trades of the day
- Keep notes on your trades, good and bad, what mistakes you made, what you did well, etc.
- Write down notes big picture, trade strategy, intraday fundamentals, technical analysis, reading the tape, trade management
- Review the journal weekly and monthly
Record your trading screens:
- Take notes of important moments for the stocks you are trading
- Re-watch the important moments of your month and news
- Watch screens to improve your tape reading skills
- Intimately watching your market is one of the best ways to learn how to trade
Train yourself to be mindful:
- Your mind can be a source of edge
- Be aware of how you feel: angry, sad, happy. Different emotions can trigger good and bad trading.
- A lot of traders use yoga and other mind training exercises to settle their minds and increase their focus
Regulate your sleep schedule:
- If you are tired, you will trade poorly
- Develop optimal sleep routine
- Go to bed at the same time
- Measure your sleep and connect its correlations with performance
- Decrease risk when you have sleep poorly
Put Charts in Your Journal:
- Find the chart(s) of day, week, month: print them out.
- Write down notes on them on what you saw, times, prices, etc.
- Over the weekend and at month end review your book of charts
- Memorize and internalize the most powerful chart setups
Have an Exercise Routine:
- Develop weekly exercise routine
- Hiring a personal trainer one of my best decisions
- Fitness can be a source of edge
Mind Your Diet:
- Develop an eating routine that works best for you
- Some foods slow you down. Some foods keep you focused. Carbs and sugar midday do not work for me
- Everybody is different
- If you are not disciplined with what you eat, how can you expect to be disciplined when you trade?
Have a Mentor:
- If you have a mentor, you are lucky, most people don’t. Take full advantage of the opportunity.
- If you don’t have one, seek one out that is both a good trader and good mentor. Some traders aren’t good mentors. Some mentors aren’t good traders.
- Be present and prepared in each session.
- Ask good questions
- Win each mentoring session
- Improve your technology skills daily: alerts, scripts, models, excel, programming
- If you spot a great trade, can you build a filter to spot a trade like it?
- Prepare for 30 min before the open: news, levels, spreads, leading indicators
- Build your stock/product selection skills: what product is in play?
- What you trade is more important than how you trade
Daily report card:
- Pick One Goal
- Work intensively on this one goal
- Develop solutions to achieve this one goal
- Complete report card at the end of each trading session on progress for that one goal
Talk to traders:
- Learn from junior traders
- Learn from senior traders
- They will see things that you missed and from which you can learn
- Gain trading experience by reviewing trades through discussion with others in the same name
Game plan big trades:
- What is the next big trade?
- How will you react
- Trade plan? So if trump was to walk away from china deal, what would you buy and what would you sell?
- Before the AM meeting
- Great longs and shorts in the names you are covering
- What is your top idea?
- What stocks will receive the most focus?
- What will you set alerts for and trade only if?
- It is easy to lose sight of where you can make the most money when the markets open
Daily gratitude exercise:
- Write down three things you are grateful for each day?
Train your brain:
- com – games for trades, what Mike B plays before the open
- Tom Brady incorporates this into his training
- Plan time to excel in your friendships
- Plan time to excel with your significant others(s) and kids
- Happiness improves performance says the science
- Read books
- Listen to audio books
- Sign up for a class
Rip through charts:
- Develop a daily system to look through charts
- Daily and weekly charts
- Longer term breakouts and breakdowns
- Create a daily routine filled with effective habits
- Make it your own
- What you do determines who you will become as a trader!
If you don’t do any of these, it will be hard to implement all of these habits and routines at the same time. Start doing 2 or 3 of them and once you have these down, start adding additional 2 or 3, and so on until you have a rock solid daily routine. Having a successful process and routine is all about putting yourself on the right path to trading success.
You experienced traders, are we missing anything? Do you do anything differently in your routine. Share your thoughts in the comments.
This list comes from an SMB video with additional insight from our Head Trader Jason Berry.