Take Your Trading To The Next Level

So you want to take your day trading to the next level? Excellent, you have come to the right place. Many aspiring traders have a difficult time reaching consistent profits while others have a hard time pushing themselves to the next level. Below I’ll go over some of the techniques that have helped me push my trading to where I am today.

Develop A Process for Your Trading Days

Aspiring traders need to develop a trading process or routine that they can use on trading days to help them focus on executing their trading plan when the markets are open and there are a lot things going on. By following a strict routine you are programming yourself to follow the same steps everyday built for the purpose of success.

Your routine should start an hour before the market opens where you can scan the markets for stocks with news and favorable day trading setups. Once you have your watch list for the day, come up with a game plan that you will use as guideline. This is an important step because once the market opens and stocks are moving it’s easy to get caught up in the moment. If you already have a plan then it will be easier for you to focus on price action and executing your trading plan.

Be specific with your game plan. Come up with if/then statements and use them as a way to initiate your trades. For example, IF XYZ stock breaks pre-market highs on high relative volume and holds THEN I will look to go long. IF XYZ breaks pre-market highs and closes back below, THEN I will look to go short on a busted breakout play. These are just some simple examples but something new traders should practice doing.

Once you are done trading for the day and the market slows down then it is a good time to journal and review the trades you took versus the game plan you had in mind before the market opened. Grade yourself on how well you traded your plan and look for ways to improve.

Once you have developed a process that works for you, then you can work on fine tuning it and practicing it everyday till it becomes second nature.

Reflect on Your Performance

Sometimes it really pays off to take a step back and look at yourself from a different angle. By taking the time to do a self-evaluation on your trading performance, you can learn a lot of things. What you will be looking for are your strengths and your weaknesses. By finding out more about yourself, you will better understand where there is room to improve. First, start with your strengths. Find out what you do best and try and expand on that. This will give you a solid foundation to build your trading strategy.

Second, take a look at your weakness. By finding out your weaknesses, you can learn how to improve them and/or remove them from your trading all together. Weaknesses such as over trading, revenge trading, not taking enough size on your best set ups or not following your risk parameters will hurt your trading and burn your account out.

Journaling is such an important part of trading, so make sure to dedicate some time each day to reflect on your trading and what the best course of action is going forward.

Focus on Consistency

After you have developed your daily routine, make sure that you focus your efforts on consistency. Avoid making moves on a whim because this is how traders lose money but instead, stick to your trading plan and trade only when you are confident the setup is one that has edge. Remember, it only takes one good trade to hit your daily goal so make your trades count and be very selective!

Being selective and patiently waiting for your setups will help you avoid over trading and taking unfavorable setups. This will also help improve your consistency which is one of the hardest things for new traders to do. Remember, trade the best and leave the rest!

Size Up on Your Favorite Setups

Every seasoned trader has their bread and butter setup because they know it has edge and odds are in their favor. So what do you do when see a setup developing that is your go to trade? You size up. You put more risk on because you know more times than not, you’re going to get paid.

However, one important caveat is that new traders who are putting on more size than normal tend to trade differently which can have a negative impact on the trade. Size up in small increments and take notes after the trade to document your thoughts and feelings. See how this compares to your trading when taking on normal size.

Putting on more size can be stressful and cloud your judgement, but if you aren’t pushing yourself to get bigger and better then your trading isn’t going to reach its full potential. You want to balance your sizing so you’re pushing yourself but at the same time not getting to the point where you are making bad decisions because you don’t feel comfortable.

Eventually trading with more size will become easier to do as you develop your skills but don’t become complacent. Always be pushing yourself and protecting your positions according to your risk parameters.

Final Thought

I love trading. It is one of the most rewarding and challenging careers I could have chosen but success didn’t come easily. I’ll be the first one to tell you that trading will test your patience and your will, but once you make it as a successful trader, you will have a hard time finding a career that can compete with the freedom you will have and the income you can bring in.

These are some tips that have helped push my trading to the next level and I believe it will help you as well. Let me know if you have any questions in the comments below!