Background
Like most traders, I have probably spent far too long chopping and changing my trading strategies, screen setup, position sizes and information sources. We call this “Style Drift” From learning to read the tape, to digging through financial statements and broker reports. There are thousands of ways to make money in the markets yet so many people fail. I have come full circle in my trading journey. It was 4 or 5 years ago when a new friend showed me how easy it was to just buy when a moving average crossed another moving average and sell when they reverse. In hindsight, this strategy on a 4 hour timeframe probably would have made me a millionaire over this last Crypto Bull run. But after getting chopped up in a sideways market, I went on a 2-3 year quest for more knowledge on this game of trading. After reading countless books and following different trading experts, I now follow a pretty simple process of pre and post market analysis, as well as simple trading rules and setups. Here, I will break down the process..Pre Market Process
5-8am – Mind & Body- First thing I like to do is get my blood flowing by either a Sunrise walk or morning Gym session. I also put on a podcast to wake my brain up (I’m not naturally a morning person)
- Small breakfast and Coffee (I have recently been trying to transition to Yerba Mate tea)
- Sit out on my balcony couch, take in the sunrise and morning fresh air
- Whilst out on the balcony couch, I check my Emails. I am always trying to make sure my Emails are relevant so I Unsubscribe to anything I notice that isn’t read. The main Emails I check are snapshots of todays news
- After Emails, I like to check what has happened over night in other markets. As I trade the ASX, a Commodity dominated exchange, I check the commodity prices first at Investopedia.
- Next I check my Pre Market watchlist on Trading View. This watchlist has some commodity futures, sector ETFs and other Indeces and large cap stocks I like to keep track of. I usually just look for big moves and outliers, but also have some charts drawn up if there is a flag or some sort of consolidation forming.
- Whilst on Trading View, I usually take a quick look through the Alerts I have set. Some of them are way off, but others might look like they are just about ready to move. I will also pull up the relevant watchlist to a commodity that has had an outsized move (for example: The Uranium ETF recently broke out, So I would check my pre made watchlist of Uranium names and look for setups.)
- After this, I will check for individual stock breaking news. Admittingly, this is the part I still need to improve. Currently I check The AFR, The Market Herald and sometimes listen to Ausbiz TV As my trading style is breakout swing trading, I try not to let the news have too much influence on me. We all struggle from conformation bias and I have had my biggest losers when I feel like the market move in a stock is wrong. The market is never wrong.
- Then I check in with my Discord group. The group is full of smarter people trading far bigger accounts with all different styles. It is good to learn from these people but I do try to avoid getting swayed into trading other styles. (This tests your discipline big time!)
- I check over my open positions and make sure the stop losses are correct.
- Zone in on stocks in play for the day (I still struggle with finding the best stocks to trade in the opening hour, but this is how I have found my favorite trading style. Multi day and week moves don’t necessarily need you to fully anticipate the move, I try to let the price action confirm or deny my ideas)
- In the final 20 minutes before open, I like to set any last minute alerts. Get my screens set up correctly, add some tickers to my broker watchlist and have a quick look at some of the pre market auctions.
Trading
As mentioned earlier, I try to stick to a simple trading strategy. I will save this for another post but I would imagine it would be a much shorter post than this.Daily Post Market
As I do not trade full time, sometimes I am not even at the screens when the market closes. In an ideal world, I would be watching the market intensely in the closing hour as I find anything that finishes strong usually opens up the next morning. But if I do miss the close, I will still come back to my computer to check on my open positions and any alerts I may have missed. In the future I will experiment with more stop buy orders with alerts that are close, but for now my post market analysis is just about checking that my positions are correct.- Check positions, if any scale out targets have triggered, I will adjust the remaining position stop loss
- Check Alerts. Did I miss any good breakouts that might still be worth getting on the next day?
End of Week Analysis
My most recent and biggest game changer has been changing from updating my trading journal every day, to updating it at the end of the week. Usually I am too mentally exhausted to do an effective analysis of my performance each day. Also, my trades are multi day and multi week, so it actually doesn’t make sense to check performance daily. I might even experiment with doing it fortnightly as I am still noticing I do hold my winners much longer than my losers so some weeks figures look terrible.- Upload my trading data from my broker Iress to my trading journal
- Crosscheck the trades and input the data. This is something I wish I could automate a little better, because sometimes I can be a little bit lazy with my trade documenting either when I put the trade on, or when I put it into the journal.
- Trade Review. One of the reasons for creating this Blog, was to hold myself accountable and create better trade reviews. You can’t improve what you don’t track. My trade review includes a brief overview of the trading week, what I did well and what I need to focus on over the next week. I try to focus on my process as apposed to the actual outcome.
