Lessons from the Pros

The Power of Habits

Routines are powerful habit formers and if you identify a routine for the beginning of your trading session, you will create a support mechanism for optimal ability to perceive the reality of the market order flow.  Of course, some of you might say, "I’m not willing to do all that. I’m ready to trade."  Well, my question to you would be, how important is your trading to you?  Is it only for excitement and entertainment?  If so, then why not just go to the casino because in all likelihood you are gambling.  Or, are you serious about being successful?  That doesn’t mean that you don’t or cannot enjoy the art of trading; it just means that in large measure your enjoyment comes from doing it masterfully and going as far as you can with all the tools and expertise that you’ve got.  Here is a powerful regimen that will benefit your entire system (mind, body and spirit).  And, anything that supports your entire system will support your capacity and ability to accurately read what the market is saying.

• Start your day with exercise. Energize your system, oxygenate your bloodstream and get the cobwebs out of your brain and body. This does not have to be strenuous and in fact it can be just 10 to 20 minutes of calisthenics and stretching.  Believe me; if you haven’t experienced the natural high that comes from a consistent period of first-thing-in-the-morning bodywork, then you’re in for a treat.  It is a thriving and revitalizing experience that leaves you glowing and confident for the day, ready to take on the challenges that await you.
• Try a meditative session to ground you in a relaxed and aligned state in order to be available, patient and focused with intention.  By sitting still and focusing on your breath, you can ease any residual tension and center your system by focusing on being proactive, resolute and attentive to what matters most.
• Eat a light breakfast of nutritious food, and drink juices and/or tea to maintain focus and mental strength.  Eating is very important to incorporate and maintain proper minerals, vitamins and nutrients in the bloodstream for sugar balance, and brain function.  Your energy level needs to be high for prolonged and intense mental work, whether for an hour or several hours of market participation.
• Review your Plan and Trading Rules to keep them fresh in your mind.  Keep them posted for easy reference while in the trading trenches.  It is vital that you are familiar with your trading plan and rules intimately.  You can’t follow a rule you have forgotten.
• Do your homework, whatever supports your style and trading strategy.  The point is to "do it."
• Go through your daily trading strategy "out loud."  This has a way of flushing out distortions.  Look at the charts you are planning to use.  Identify the play you are going to make, and describe the rationale with entry, target, time frame and exit.  You will be surprised at how the trade "sounds," and in fact, new perceptions of the trade may present themselves to either clarify and strengthen your confidence or shake you out of the dream that caused you to see something that wasn’t really there.
• Then take a deep breath and enjoy becoming one with the price action and order flow.  Remember, patience is a key ingredient to both seeing things as they are and waiting until the trade comes to you…so, don’t chase the trades.

Routines and habits are an important cog in the machinery of managing emotions and making consistently successful trades. In Mastering the Mental Game (both the 2-Day Course and the Extended Learning Track (XLT) ) we discuss these and many other mental tools for your tool box.  They are available now.

- Woody Johnson (wjohnson@tradingacademy.com)