Textbook Trading – Notes and Review of Chapter 10 – Daily Routine & Goals by @investorslive

Table of contents:

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Summary:

For sure my favorite chapter so far! While I gained a lot from the “how to trade” and “how to find setups and entries” that were the focus of many of the earlier chapters. I really liked this “hodge podge” of trading related topics.

Intro

There is a TON of content in this chapter and all of it useful. See below for the play by play. There are so many topics that I’m not really going to hit them one by one in this recap. Just skim below and you’ll see all the main bullets.

I really think this chapter is useful for any and all traders. I don’t care if you are a newb or some salty old whore of a veteran. Nate goes over everything from a daily routine (which I’ll admit, daily routines of successful people border on a fetish for me), to defining your style and great commentary on the Ego.

psycology

Nate wraps up with describing and detailing the basic four times of the day.

  • Pre Market
  • Trading day
  • Mid Day Lull
  • After Hours

And goes into detailed discussion on how to trade or even more important NOT trade these time periods.

summary

One of the great parts about this chapter is everything in it is timeless and evergreen. This chapter would be useful for a trader today or ten years from now.

VERY GOOD STUFF, really liked this chapter!

Notes:

Daily routine

7AM – getting up early?? 🙂
-Looking for early big movers, up and down

8:00 – Look sharp – trade sharp
-Start working on borrows, pre borrow, check inventory etc
-Match up scan/plan to what is happening pre market

8:45-9:15
-check back into gappers
-again match up market plan

9:15-9:30
-Condense scan down to a trade plan 3-5 main watches
-Main screen is these 3-5 tickers on main monitor

Eat lunch, step away from monitors
If you traded well and in cash, take a walk – THIS IS HUGE!! Saves crappy trades during lull

4:00 Hit the gym, non negotiable, either early in the morning or after hours

Do a scan/watch then be done for the day.

CLOSE THE LID

Things to be a aware of
Trade tickers not companies
volume/range
check news FDA etc
Earnings calendar
buyout chatter
avoid on the short side especially, don’t fight/battle

Ego
-Market is always right
-Hope is not a strategy
-“Its easier to be patient when wrong than right.”

Psychology
-Prepare/Plan/Patience
-So much less work when you trade the plan
-Clean slate every day if possible

Adaptability
– Have a plan but be prepared to adapt to what is happening real time
-Flexibility and an open mind

Define your style
-What is your goal?
-Swinging or day trading?
-Write down your plan.

Paper trading
-If you understand what is going on, you can make money

Building your account
Be patient/grind
Do not compare to others
Don’t make changes trying to push

Multiple accounts is good, especially for swings vs. daytrades

-Trading account is in cash every day.
-Back burner swing account, add alerts for stops, but don’t stare at it trade the plan
-Don’t turn day trades into swings

Calculating Risk discussion
-Size discussion

Taking Profits
-Surprising how quickly profits add up.
-Paycheck mentality
-Size discussion, take profits scale back and let it ride

Only trade liquid stocks

Good scaling discussion

Cash is a position too – don’t overtrade

After Hours
-Basically a casino
-Can ruin a good day
-If you do trade after hours, use small size
-Be especially quick taking profits

Pre Market
-More consistent than after hours, less gambling/crapshoot
-8AM Shakeout/shuffle

Earnings
-Avoid- don’t anticipate
-Wait for the news to come out, then trade your plan
-No edge/gambling
-Same with FDA news, trade it after not before

Mid Day Lull
-Trade your plan, but not out of boredom
-If stuff isn’t working don’t wait out the lull, ditch it and move on.
-Sideways action will burn you almost every time

Importance of stopping out
-If your stop slips you HAVE TO HAVE THE OH SHIT HANDLE
-Loss is $300-500 – have your number

Focus on what you are good at

Always have a plan – set risk

Attention whores
-Good discussion
-miss good trades

Sector Sympathy Plays
– What they are.
-Kind of like former runners, need to be in it to know what they are
-Sector rotation, cycles repeat

Be Prepared
-LESS IS MORE

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