There are few more stressful and demanding careers than day trading — especially if you're on a losing streak. From Buffet to Dalio, successful traders have a mindset and routine that sets them apart from the rest.
This examination takes inspiration from the daily routines of the world's top traders, which I hope you can learn from to improve your trading game.
Inside a day in the life of a trader
Key takeaways
- A consistent daily routine is key to successful trading, providing focus and reducing decision fatigue.
- Beginning the day with a clear mindset is critical for traders. This could involve meditation, exercise, and reviewing personal trading goals.
- Planning trades, including reviewing market news, creating a watchlist, and identifying key levels and price points, is an essential part of a trader's routine.
- Sticking to your plan, maintaining a trading journal, and managing risk is crucial for successful execution.
Importance of a daily routine when trading
Trading is often portrayed as a non-stop whirl of hard work and even harder play. But that's most certainly not how consistently successful traders live their lives.
A daily routine helps you stay focused and organized. It's what everything is built around.
And it's not always a scripted routine of cold baths, saunas, journals, reading, exercise, and fasting. Take Buffett, for example. He opted for a McDonald's breakfast and the morning papers. But the point is, Buffett did the same thing every day... for years. And look how that paid off.
The power of routine is subtle. It eliminates decision fatigue. When you know what to do and when to do it, you're less likely to waste time on unproductive tasks. A clearer and less stressed mind is essential to making trading decisions since they are often marginal.
Starting your day with a clear mindset
Successful traders know that a clear mind leads to profitable trades. That's why they start their day with a few rituals to clear their minds and get focused.
Sleep
Today's success is dependent on last night's sleep. Overlook this at your peril. There are only so many magic roundabouts your body can tolerate before you make a bad decision.
Money is made by sitting, not trading. ~Jesse Livermore
Meditate
Meditation is a powerful tool to calm the mind and improve focus. Before you start trading for the day, take some time to meditate. Even just a few minutes can help you feel more focused and centered.
Exercise
Exercise is an important part of a trader's daily routine. It keeps you physically fit and improves mental health and well-being.
Going for a run, hitting the gym, or practicing yoga are all great ways to get your body moving and clear your mind.
Review your goals
Before you start trading, review your trading goals for a few minutes. Knowing your goals can help you stay focused and motivated throughout the day.
Write down your goals and keep them somewhere visible to remind yourself of what you're working towards.
Without dreams and goals, there is no living, only merely existing, and that is not why we are here. ~Mark Twain
Planning your trades
With a clear mind, it's time to plan your trades for the day. Successful traders adopt a structured, planned approach, leaving nothing — or as little as possible — to chance.
Market analysis and news review
Trades must be placed in context. Knowing what's happening in the market is critically important.
Review the latest news and analysis to get an idea of what to expect for the day. This will help you identify potential trading opportunities and threats best avoided.
Create a watchlist
Your watchlist should include stocks, currencies, or commodities you're interested in trading.
To maintain clarity of mind, focus on a few key assets rather than trying to keep track of everything.
Identify key levels and price points
As you create your watchlist, identify each asset's key levels and price points. This will help you set entry and exit points for trades and manage risk.
The goal of a successful trader is to make the best trades. Money is secondary. ~Alexander Elder
Executing your trades
With your trade plan in place, it's time to execute your trades. Successful traders follow a few key principles when trading.
Stick. To. Your. Plan.
Avoid chasing trades or making emotional decisions. Stick to your plan and trade only when the conditions are favorable.
It does not matter how slowly you go as long as you do not stop. ~Confucius
Use a trading journal
Keeping a trading journal is an important part of a trader's routine. Use it to track trade performance, identify patterns — like when you make poor decisions — and improve your strategy over time.
Manage risk
Managing risk is crucial to successful trading. Use stop-loss orders to limit your losses and avoid taking on too much leverage.
Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you. ~Larry Hite
