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Trading for Beginners Part 4: How to create your daily trading routine in 4 steps

July 7, 2018

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The importance of a daily routine

In this article, you are going to learn how to create your daily trading routine in only 4 steps and how Tackle Trading is the best platform to perform your trading routine.

Doing the little things the right way is what we want to instill in traders because we firmly believe that the secret of success can be found in the daily routine.

Watch the video: How to create your daily trading routine in 4 steps

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In this video, you are going to learn how to create your Daily Trading Routine in only 4 STEPS. Plus: How Tackle Trading is the best platform to perform your trading routine.

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Tackle Trading Daily Routine

Your average person gets up, makes a morning cup of coffee, pours a bowl of cereal, and makes some eggs—or some variation thereof. Depending on their routine, they will then turn on the morning news, read the newspaper, or surf the internet. Before, during or after all of this will include showering, shaving, feeding the dog, and other activities that are needed to be done daily before heading off to work, school, or even for those who stay at home during the day.

Depending on the individual, the order and type of activity will change but it is common for some type of morning routine to set in for all individuals. Seldom are these developed routines conscious choices as people often simply fall into certain patterns depending on the interests, needs, strengths, and weaknesses. There is nothing inherently good or bad about routines, as they can be a wonderful addition to someone’s life, or they can include negative aspects that are a continual hindrance.

Since you are likely to fall into some sort of routine, you might as well do all you can to maximize the routine you fall into. For those that trade in the financial markets a solid routine can help someone who still works full time to maximize their time spent trading. For those that trade full time a solid routine can allow more time to analyze new stocks, spend time with their family, or enjoy whatever other activities that catch their interest.

Whatever you include in your routine, the key to making it stick is repetition. Over the years I have heard many numbers thrown out to state how many days in a row you need to do something for it to become a habit. Whether it is 15, 25, 30, or 45, there are two things for sure: first, the number of days undoubtedly varies based on the activity and individual and, second, if you do a certain activity long enough it will eventually become a habit so stick with whatever routine you establish religiously.

Since a person starting a new routine is likely going to have to break an old routine, your new routine will hardly be second nature at the start. Whether you go through your financial market activities in the morning or at night, there are likely to be some old habits you will have to break in order to establish your new, more productive habits. One thing that will likely help in this transition is to write down the exact order in how you want your routine to go and then to follow it each day until it is no longer needed. This may seem very simple, but it is quite easy to forget something that is not a habit to us already.

The items below are just a few of the areas that you could concentrate on in your financial market’s routine. Some people will establish this routine at night and others in the morning depending on their other activities going on in life. Both can be successful, and both can maximize their remaining time if their routine is systematically followed.

Market Analysis

Before we jump into the portfolio and start managing trades, making decisions, placing new trades, we need to understand what is driving the market today. In this portion of the daily routine we are going to focus on four specific things:

To do this, it’s best to start in the Trade Center and/or watch the Halftime Report from the coaches.

Check the news

Markets move on the information. Information is constantly flowing in this world we live in. If you live in America, markets are open and trading around the world while you sleep. Reviewing the news for a few minutes in the morning will give you a good starting point to move into your other steps in your daily routine. You shouldn’t read the news for hours. Spend a few minutes, get the headlines, find the key bullet points, get a feel for what is happening so you can move forward into your overall market analysis with confidence. Here are some resources (click on each link to access the website):

Can we predict the reaction the market will have? No. That’s not what you’re trying to do at this step in your day. Your sole job while reading the news is to get the information and try to process it. Try to understand it. Over time, you’ll develop a market posture, an opinion on where markets should be heading, based on the news flow and reaction markets have to it. At this stage of the game, just try to listen in. 

Over time, if you check the news daily, you’ll become a smarter trader, a more informed person, and you’ll have a better understanding of how the economy is part of everything. Spend five to 10 minutes, get to the core of the information, and move to the next step. There are many good news publications that are all very similar. It’s important to scan the wire to ensure that you understand what the market is focused on. Don’t spend too much time scanning the wire or checking the news as it can get very overwhelming very quickly. Simply read a few articles that are market-related. If you are investing in certain companies, you should also read any news that is relevant to your investments.

Check the Economic Calendar and Analyze Broad Market Indices

Economic reports and policy decisions may have been released in China which in turn triggered a rally in London. By the time a trader in the U.S. gets the news and interprets it, he’ll already be seeing an impact on markets. Almost every day there are reports (The Unemployment Report, The Consumer Price Index, The Producer Price Index, and many others) that are released from government institutions and agencies that can have an impact on markets. Here are some resources (click on each link to access the website):

Analyzing the Economic Calendar

Here’s a screenshot of a list of economic reports at Forex Factory. Learn to filter for the events you need to review, filter for the currencies that are important to you. If you trade the US markets only, consider filtering out other currencies and any events that are not ‘red’ impact events.

The first month analyzing economic reports is overwhelming and confusing. The second month gets much easier. The Market Report will identify all economic reports daily.

Economic Calendar from ForexFactory.com

When checking the economic calendar remember there are three primary reasons the markets move. 

The first is the behavioral analysis of the emotions of the market. 

Second, technical analysis of trends, patterns, and support & resistance. 

The third is the most important: an economic analysis. 

We study economic analysis through the economic reporting system. Reports such as FOMC events, unemployment, manufacturing, retail, housing, consumer spending and confidence, and gross domestic product (GDP) are reports we receive almost every month. These reports drive market behavior. 

The trader needs to identify the report daily (sometimes there are none) and assess how the report impacted the market.

Analyzing the Broad Market Indices

After you’ve reviewed the economic calendar you need to analyze the market Indices. This includes analyzing the /ES and /DX, which are the S&P 500 and US Dollar indexes. 

There are dozens of indices. An index is simply a basket of a certain kind of stocks that are measured as one unit. The Dow Jones Industrial Average is the accumulation of 30 of the top industrial stocks. The Standard and Poor’s 500 is simply 500 of the largest US companies measured through one chart. Locate the symbols ($INDU and $SPX for stock software users) and pull up a daily chart for each of these indices each day. 

What are we trying to see? In general, you’re trying to get locked into the current trend, volatility, and action in the markets. It will help you make trading decisions. Spend five to 10 minutes and move to the next step. There are many other indices. For a beginner trader, simply look at the big ones as they will give you a good read on the entire market.

Scan the Heat Map

As a trader, your time is valuable. One of the tools that we love to use is the Heat Map. Using a Heat Map will give you the ability to get a quick picture of what the market is doing.

The Heat Map measures many things, but the default measurement and primary use of the tool are to gauge the daily performance of different stocks, different sectors, and the entire market. Click on the link below access the Heat Map on Tackle’s Trade Center.

Within the heat map, the primary setting to use is to measure the daily performance of the S&P 500. Each box in the picture represents each of the companies in the S&P 500. If the box is colored in red, the stock is down in price. If the box is colored in green, the stock is up in price. The brighter the color—both red and green—generally indicates how much the price has moved during a given day. If you see more red boxes, the market is down. If you see more green boxes, the market is up. If the red or green is inconsistent, then you have a mixed market, and potentially some areas of the market are up and others are down. This visual representation gives you the ability to understand price behavior very quickly. A picture is truly worth a thousand words (click on the thumbnails below to enlarge each image).

Heat maps can be customized to measure all kinds of things—like weekly performance, year to date performance, fundamental data like the P/E ratios of different stocks and even earnings dates. Start by using the heat map to gauge the price performance of the market and then learn to use the Heat Map in other ways. If you do, it will become an invaluable tool in your daily routine.

Portfolio Management

Every trade must have a plan. If you buy stock as a long-term investment, you may not have much daily management. You might just look at the current profit and loss in the position, make sure the trend and pattern are intact, and move on. 

If you are trading, buying with the intent to sell back to the market short-term, you’ll undoubtedly have more daily checklists to follow. You may need to adjust your stop loss, check the news on the company, and make your judgment call. 

The details of this step will be dependent on what strategies you are using. Over time, as you use other products such as options, futures, or forex, you may have individual rules set up for each product and strategy. It is important to have a design, rules, and to follow them. Each day, before you go look for that next moneymaker, take some time to make sure the positions you have are being traded according to your rules and money management.

Below you will find valuable resources regarding portfolio management.

Delta Weighting (article). In this article, Coach Matt Justice dissects the process of determining portfolio bias based on Delta.
Theta Targeting (video). In this video, Coach Tyler teaches what Theta Targeting is, and how it impacts a portfolio.
Manage individual trades (course). S.T.E.P. System is a trading system designed to help you execute your directional strategies.

Here are some items to remember when managing your portfolio Greeks:

In the example above, you see a trader’s portfolio Greeks. This trader is carrying a -153 delta (bearish) and a -27 theta (negative cash flow and speculative). If the trader is bullish, they need to add positive delta trades to adjust their delta. If the trader is bearish, they should simply manage each position according to their rules. If the trader is a cash flow trader, they need to add positive theta to offset their negative numbers. Cash flow traders must have positive theta in their portfolio. Use the options Greeks to better understand your portfolio design.

Enter New Positions

Traders will base the decisions of new trades based on what their portfolio needs. If the portfolio is too bullish, they’ll look for bearish trades, while if it’s too bearish, they’ll look for neutral trades. They’ll also base this on their theta target. If the theta target is not being hit, the trader will look at strategies that add positive theta. Only after you have checked the news, read the markets, and manage your positions should you go find new trades. 

Researching, decision-making, and entering orders can be exciting and a lot of fun. You should approach it strategically. What has the market been doing lately? What patterns are most prevalent? What scans can you run to find candidates to trade? What do you expect in markets next? You’ll get a better feel for this as your trade, but for now, try to find new trades and enter orders frequently.

Below you will find valuable resources regarding entering new positions.

Scouting Reports. For swing trades and volatility trades.
Tackle 25. For cash flow (Theta) trading with Covered Calls.

You may not see anything specific in the market and thus may not make a trade every single day. On the days you see a pattern to take advantage of, though, then this step is where you go to work to find trades. One mindset that can work well is to think of researching candidates as a process of elimination. Work through the entire list and try to narrow that down to a handful that you like the best.

Personal study and continued education

It’s cliché, but life is a journey. You’ll never know everything there is to know about markets. You’re a committed student, so always keep that in mind and approach education with passion. However, as a trader, don’t make it the first thing you do. Try to conduct your trading business (see above) before you crack your book and read up on the next set of strategies or ideas. You’ll be exposed to plenty of ideas, classes, trading strategies, and new content. Make sure that you are trading while you learn. The reason this step is last is to remind you to focus on trading first and then study after you’ve done your daily job. The skillsets you desire will come faster if you practice.

Below you will find valuable resources regarding personal study and continued education.

Traders Lounge (Mon – Fri 11 AM EST). Pro-member product designed to provide a daily relaxed atmosphere where students can join with coaches to talk the markets and get their questions answered.
Halftime Report (Mon – Fri 12:30 PM EST on YouTube). Dynamic, fun, informative and energetic show hosted by Coaches Matt and Tim Justice of Tackle Trading. Come join us for a market perspective that you will find nowhere else.
Tackle Today (Mon – Fri 10 AM EST). Trading insights in five minutes. Everyday. In this blog, you’ll find out what is happening at Tackle Trading along with our market thoughts, a chart of the day and other inspirational items.

We have webinars, blogs, and live shows regularly. Daily, your destination is the Tackle Today blog. The Traders Lounge is a great resource if you’re in front of the market and want to get online with a coach and fellow traders to discuss the markets. Attend it regularly. The Halftime Report is a live daily show on our YouTube channel. We hold it live at 12:30 pm EST, and it is recorded on YouTube so you can review it at your convenience.

All other content will be highlighted in our Tackle Today blog. Read it, identify what is important for you to review and then go to that content and dive in.

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14 Replies to “Trading for Beginners Part 4: How to create your daily trading routine in 4 steps”

  1. Khurshed Birdie says:

    Thanks Matt, Makes a lot of sense. I just need to get disciplined to do this first thing every day.

  2. Thomas Hammonds says:

    Well said! Routine is definitely key to being successful.

  3. StacyBell says:

    Thank you! Exactly what I needed.

  4. KatarinaSimons says:

    I love this broadcast. Amazing. I am a roockie and this gives me a daily plan to start diving into stock trading. Thank you Matt and the entire Tackletrading.com team

  5. AMISHSHAH says:

    Thanks Coach Matt. Great info. I will work towards learning the way you have suggested.

  6. JUANTORRES says:

    Thanks Matt excellent article , seems symple but takes time to get use to follow the daily routine


    Thank you, Matt! You make everything so much less complicated than I’ve built up in my head – it’s just like being in your class!

  8. VICTORDANG says:

    Thank you for giving us this detailed list that we as traders, especially newcomers, can follow to get into the habit of doing daily.

  9. Dennis Del Toro says:

    This is a very nice and refreshing update to the original post. Thanks Coach!

  10. Xochitl GuadalupeAdame Gorduno says:

    Hi Matt!
    Today I woke up decided to do the Step-By-Step Routine you gave us, only to find out I cannot find the Morning Market Report further than July 11th ¿did anything change?
    Thanks in advance!

    1. Tim Justice says:

      We’re doing a routine live each day on YouTube: https://www.youtube.com/playlist?list=PL-6LZY6du8kvEGx6qmY6efXgjLSfQOKse

      Also, you can do your analysis you were looking for from the MMR here on the Skyline page: https://tackletrading.com/trade-center/market-skyline/

  11. JIGARPATEL says:

    what a fantastic guide..love it….
    doing little things right way ..everyday .

  12. JIGARPATEL says:

    Can I get this report in pdf ??..

    1. Tim Justice says:

      Great idea, Jigar!

      Send an email to team@tackletrading.com for this request.

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