Achieving trading success requires discipline, and establishing a daily routine is a crucial element in developing this discipline as a Forex trader. Emotional errors can easily derail a trader’s progress, making it essential to consciously avoid them by adhering to a daily routine. Such a routine brings order and stability to your trading, which is essential for your mindset and, ultimately, your long-term profitability. If you haven’t yet established a regular routine for your trading activities, it’s imperative that you do so since trading cannot be a random or chaotic endeavor. The more you can objectify every aspect of your interaction with the market, the less likely you are to make emotional trading errors.
Restrict your screen time to a designated time-frame and specific time of day
The initial step in establishing a daily trading routine is to determine the times during the day when you will examine the market. You will need to work around other commitments, such as your current job and family responsibilities. If you only have an hour before bedtime to check the market, you must utilize that period. The optimal times to analyze the market are around the New York closing at 4-5pm EST and just before the European opening at 1-2am EST. However, if you cannot stay up until 1 or 2am EST, don’t worry; just ensure that you analyze the market at the same time each day.
Once you have identified the available time for market analysis, you must determine how much time you want to spend scanning for trade setups and/or monitoring any open positions. Limiting your screen time to a specific allotment is critical to your mindset and trading success.
Trading off the daily charts is the best time frame because it filters out the noise of the lower time frames while still offering high-quality trade setups each week. Once you become skilled in analysis, you can scan each currency pair you trade during your designated time each day. If no setup presents itself, move on to the next pair, and if no setups appear in any pairs, you’re done for the day! Further analysis at this point will only hurt your chances of success in Forex trading. Over-analyzing the market and entering low-probability trades will cause you to lose money over time.
Adhere to a Trading Plan
As a trader, you are aware of the setups you seek each day in the market. Therefore, you should have a clearly defined, written trading plan detailing what you are looking for during your allotted time and period. If you don’t have a tangible and well-defined trading plan, you must start working on one immediately. Keeping your trading plan solely in your head is insufficient; you must read it daily. Your Forex trading plan should include entry signals, exit strategies, risk management plans, and long-term objectives at a minimum.
Following an objective trading plan provides you with precise setups to look for each day, allowing you to concentrate more intently and providing a guide to follow while analyzing the market. Market analysis must be structured, but most traders lack structure in their daily routines because they lack a trading plan. How can you become a structured and disciplined Forex trader if you don’t even have a plan for what you’re doing? Almost everyone who tries to become a Forex trader approaches the market without a trading plan or understanding of why it’s necessary. Operating in a structured manner in the uncontrollable Forex market is essential to earning money consistently.
Maintain a Trading Journal
Keeping a daily trading journal is crucial for several reasons. While many trading resources suggest recording the details of each trade you take to evaluate your performance, I believe that this overlooks the most critical aspect of trading success: managing emotions. Therefore, the primary benefit of a trading journal is to provide you with feedback on how you feel about your trading activity and your day-to-day emotional state.
It is vital to note down your emotions before and after each trade, including whether you won or lost. This will help you calm down from a big win or loss and prevent you from impulsively jumping back into the market. Additionally, it will help you understand the connection between emotions and trading performance. If you’re truthful in your trading journal about how you genuinely feel before and after a trade, you’ll start to see a clear correlation between your emotions and your profitability.
Keeping a daily trading journal also allows you to write your own Forex market commentary. This is a useful tool for keeping track of market conditions and making you more aware of what’s happening in the market. Staying connected to Forex price movement every day and placing it in the broader market context is beneficial. If you plan to be away from the market for a few weeks, don’t jump straight into a trade when you return. Instead, record daily market commentaries for a week or so to get a sense of the current ebb and flow of price movement. It’s critical to stay in tune with the Forex market.
Focus on cleansing your mind and body rather than obsessing over market analysis
As previously mentioned, spending too much time analyzing the Forex market beyond your predetermined schedule can often be counterproductive. If you find yourself with free time, it’s important to find activities that will help cleanse both your mind and body. Regular exercise, for example, can greatly improve your ability to focus on daily tasks, as well as boost your mental and physical well-being. Rather than spending additional time analyzing the market, invest your time in activities that benefit your health and well-being.
If you still have extra time after exercising, consider reading a book on a topic that interests you. It doesn’t need to be related to trading; expanding your knowledge on any subject can help keep your mind sharp and active. Remember, a successful Forex trader must treat trading as a business, and every successful business operates under a strict routine. Your daily routine is crucial to achieving long-term success in the market, so be sure not to underestimate its importance.