What does your general trading routine look like?

After talking to hundreds of traders, we noticed that the vast majority just fires up their trading platform and then starts hunting for signals and trades without a structure or a process. We probably don’t have to tell you that there are better ways to trade.

Yesterday’s trading results, the trades you took and how you managed them and how you think about your trading behavior impacts your trading performance today. That is why it’s so important to start your trading day right to make sure that you become aware of flaws and potential threats before it can harm your trading performance.

In this lesson, we will introduce a quick morning and pre-trading routine that will help you start the day effectively and help you avoid the biggest issues traders have.

Update: The trade management graph can now be found in the Chart Lab main tab. The session tab is in the Trade Process main tab.

Before you start your trading, go back to your Edgewonk trading journal and revisit your last 10/15 trades and pay close attention to the following 5 points:

1. The outcome: over-confidence, ego problems and being afraid.

Are you coming from a series of losers or winners? A recent losing streak often causes confidence issues or it can lead to excessive risk-taking because traders want to make up for their losses faster. A recent winning streak, on the other hand, can lead to sloppy trading and too much confidence.

It is essential to know where you currently are with your trading so that you can avoid pitfalls and emotionally caused trading mistakes. A quick look at your running weekly stats is a great way to start your trading day.

2. Trading mistakes and mindset. Not all wins are good and not all losses are bad.

Not all winning trades are good and not all losers are bad; it is important to understand how you make your trading decisions. Therefore, take a look at your Tiltmeter: is your current Tiltmeter trending red or green?

Remember the Tiltmeter challenge and always keep it green.

A job of a trader is it to make the best trades possible. Money is then a byproduct of making the best trades.

3. Trade management I – PCP / PCR

The reward:risk traffic lights analyze the expectancy of your trades. A green light signals that your trades were large enough to provide a positive expectancy. Well done!

A red light indicates that the reward:risk was too small and that you should avoid such trades or aim for a larger reward:risk ratio if possible.

More on that later.

4. Trade management II – Trade Management graph

The  Trade Management tab in Edgewonk analyzes if you manage your trades well or mismanage them.

Cutting winners too early or letting losses run too long is a big problem for most traders and the Trade Management tab in Edgewonk analyzes how you manage your trades.

A potential performance that is significantly higher than the actual performance signals problems in your trade management. We’ll cover the Trade Management tab later in more detail but if you see a mismatch here, you should start looking into your active trade management.

5. Utilizing the Edgewonk Sessions

Do you remember your last 5 or even 10 trades? Probably not and almost all traders will quickly forget their past trades after closing them.

It is, therefore, important that you have a way of remembering lessons, mistakes and other things that stand out during your trading days so that you can actually work on them and overcome your problems.

We recommend that you create a new session at the end of each trading day where you capture your thoughts and make notes about important observations. In the morning, it just takes a quick glance to remind yourself of what to avoid.

Keep it simple

We urge you to keep the pre-trading checklist simple. It is important to have a routine that you can easily and efficiently repeat every day without getting stressed out or looking for excuses.