A swing trader’s daily routine

Spark Global Limited Reports:

As a volatility trader, or any active trader/investor, you should have a daily routine where your performance is consistent.

The amount of market analysis a technical trader does per day should be roughly proportional to the trading time frame.

In other words, if you’re trading on a weekly chart, it doesn’t make sense to look at each intraday time point, because that’s all noise relative to your time frame.

For active day traders, on the other hand, it makes sense to stay at the terminal throughout the trading session, scanning and executing trading ideas.

While many people pay lip service to screen time (mostly staring at charts, thinking and executing trades), it has to make sense for your trading time frame.

It is not uncommon for traders to hold a stock based on a weekly chart pattern, but close the position intraday because a support or resistance level on the 5-minute chart has been broken. It makes no sense.

Further exacerbating the problem is the social aspect of the transaction.

It’s the 10,000th time FOMO has been discussed in cliches trading articles, but water-cooler and social-media-driven FOMO is at an all-time high in this market.

Everyone is talking about the gains they made in dogecoin, the next hot short squeeze or the options dealer-driven Gamma squeeze. If you’re listening to all this while sitting in some boring insurance company because of the daily chart pattern, it’s hard to resist style drift.

One way to guard against fOMO and the next Big thing is to have a specific trading program. Once you get into a routine, it’s yours.

Your personal attitude toward the market gives you the confidence to ignore rumors and noise and execute your plan, whether or not you see similar gains trending on Reddit. It’s hard to overstate the importance of establishing and taking on this routine, because the alternative is chaotic and random.

If you accidentally search for trading ideas on platforms like FinTwit, Screeners and Scanners, Reddit, and simply type in the most recent stock moves into your charting platform, you’ll see anything that day.

Many times you will find great patterns, but notice that you are late because you found them from outside sources.

Let’s review a volatility trader’s daily routine template.

Everyone’s routine is different, depending on your strategy, but for technical traders who don’t have a routine, this is a “vanilla” approach.

Beginning: After the end
If your schedule allows, you should prepare the night before the opening.

You don’t have to compete against the clock or rush to your computer in the morning to make sure you have enough time to get ready for the opening. Of course, this only applies to people in a similar time zone to New York.

By doing all or part of your preparation the night before, you can give yourself more options in the morning — sleeping in, getting stuck in traffic, extending your morning schedule, etc.

Linda Raschke, the legendary “market wizard,” is a big advocate of prep the night before. She prefers to enter the trading day with a clear head, rather than the analytical thinking needed to find trading ideas, and trades “on the spot” when the market opens.

Step 1: Manage open trades
Manage what you have first.

For some, trade regulation is done as soon as it is implemented. Stop loss and profit targets set and forget and let the market do what it does. But most swing traders are more tactical.

We tighten stop-loss or profit targets, add or close some positions, and even hedge with options or related securities to manage event risk.

This part is easy and very personal to you.

But if there is a specific thing to do, take a close look at your position within your trading time frame and assess whether the position needs to be managed. You may have been looking at positions on the day chart, and you need to make sure you’re still looking at the big picture.

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