The Perfect Trading Routine - Our Complete Step By Step Guide [Updated] - (2024)

One of the biggest differences between the professional and the amateur traders is the general approach to their daily trading. While the professionals follow a well laid out routine that allows them to find the best trades every week, the amateurs just stumble from one bad trade to the next bad trade and making is pure luck.

An effective trading routine will help any trader improve his results while allowing him to reduce his trading time significantly. I, for example, rarely spend more than 1 hour per weekday on my trading and I will show you how you can become more effective and efficient in your daily trading as well.

The secret of your future is hidden in your daily routine. – Mike Murdock

Being an efficient trader means automating as many tasks as possible and eliminating redundant processes and unnecessary tasks.

I show you how to set up your workstation and computer so that you are best prepared for your daily trading.

1.1 Charting vs. trade execution

We have said it often and we will repeat it many more times: we highly recommend separating trading and charting. For charting, we use tradingview.com and only when we want to execute a trade we go to our broker’s trading platform and then close it again right after.

The reason is simple: traders who chart and trade from the same platform are always just one mouse click away from entering a new trade and they also always see their orders in front of them once in a trade which can easily cause impulsive decision. It creates a sense of urgency and makes messing up trades much, much more likely. By separating trading from charting, you add a layer of friction and it’s not as easy to follow your impulsive trading ideas.

1.2 Setting up Tradingview I – templates

In Tradingview, I use different templates and profiles with pre-defined chart setups for different types of analyses. You can follow our Tradingview profile here: Tradeciety on Tradingview.

To save a template and/or create a new one, you have to click on the template name in the top right corner as shown in the screenshot below. By clicking on “Load”, a list with all your templates pops up and you can create and save your set up.

Here is how I organize my charts within the profiles and the templates I use:

• Indices: here I use a 4-split screen with the major indexes I pay attention to (the S&P 500, the DAX, the Hang Seng and the Nikkei 225).
• Commodities: Again, I use a 4-split setup and track Gold, Crude Oil, Silver and the DJ Commodity Index. Although I don’t trade Commodities, it is important for me to see how certain commodities behave.

Those two profiles are only used for the broader market analysis.

I then have a regular template as well with all my other Forex pairs and different timeframes. I recommend that you test a bit around and see what works for you.

1.3 Using templates for more efficiency

To make charting more efficient, you can create individual templates for your drawing tools. For example, if you use different color coding techniques for your support and resistance levels or other tools, just create a new template and the next time you draw on your charts, just select it from the dropdown.

After you drew your first trendline, you can see the dialogue box on your screen. Under “Template” you can create new templates or apply a specific template to a drawing tool. It really helps make your live much easier and charting more efficient. This works with all other charting tools as well – not only trendlines.

Here I also quickly want to mention the shortcut feature in Tradingview. I use usually the same charting tools over and over again and I have created a shortcut bar which allows me to access certain features with just one click from my charts:

1.4 Create alerts

Not every trader uses multiple screens and to make sure that you don’t miss any important price behavior, you can and should use the alerts function in Tradingview.

You can see the general alert settings on the left. Again, you can fully customize the alerts to your needs. You are not limited to price alerts only, but you can also create alerts based on moving averages, price channels, trendlines or %-price movements within specific time intervals.

If you use support and resistance levels, you can simply click on the level on your chart and by clicking the alarm clock in the dialogue box you can create an alert for that level.

I highly encourage you to use alerts as often as you can to make sure you don’t miss price moves.

After you are done setting up your charting and organizing yourself, let’s now take a look at the daily trading routine.

I find that a surprising portion of what sets up traders for success during the day is what has happened the previous night. – Dr. Brett Steenbarger

Especially if you are not a full-time trader yet, it is important to use your free time effectively. Preparing your next trading day in advance is one of the best things you can do for yourself.

2.1 The weekend

The weekend is for me the most important time as a trader and I can plan my whole trading week ahead without having the stress of the moving markets.

I need roughly 3-4 hours to go through all my 30 Forex pairs, update my charts, re-draw my levels, set price alerts and scan for important patterns. I will go through the Daily, the 4H and the 1H timeframe for each pair.

Is it worth it to you to spend a little less time on the couch watching TV, sleeping a little less and putting in a few hours into your trading to move closer to your goals?

2.2 The trading plan

Then, I write a trading plan for everything that caught my eye and that could lead to a trade in the next days. The trading plan includes your price observations, the most important price levels and why you have them on your charts. In it you also create if-then scenarios that show what has to happen on a chart before you can enter the trade. You can either download the trading plan template from below, or write your trading plans directly on your charts in Tradingview.

3.1 Your daily dose of news

Although I am a technical trader, I must know what is going on in the world. Fundamentals set the tone and they provide a lot of information that is necessary to know about.

I don’t spend a lot of time on my fundamental briefing and I just want to get a general idea where the market is and what traders and investors are looking at right now.

Here is my list of sites I visit every day in the same order. You’ll see that news often overlap since there is only so much going on in the world. I read a mix of broad market news and some independent market analyses:

• Bloomberg
• Reuters markets
• Market Pulse

Of course, we keep track of the news for that day and I use the Forexfactory news calendar

Here I mostly pay attention to the high and medium impact news items (red and orange) and do not follow the yellow ones usually. Since I am a swing trader on the higher timeframes, the yellow items do not impact price too much most of the time and, thus, I tend to ignore them.

To make the process more effective, I bookmarked all sites and display the menu in my browser so that I can just skip through the individual sites. To give you an idea, 30 – 45 minutes is really all you need to get a good enough picture of what is going on.

3.2 Overnight international trading activity

Although the news check often gives you a pretty good idea of what has been going in, I now briefly scan some of the indices and other markets that provide important information for my trading day with the profiles I set up on Tradingview.

Indices

Often, risk appetite is carried from one trading session to the next. And, furthermore, there is usually one dominant market theme most investors are paying attention to at any given moment. A negative performance during the Asian session often leads to uncertainty during the Europe and the US session as well. Thus, pull up your Tradingview profile for market indices and scan the markets. As we have said above we watch the S&P 500, the DAX, the Hang Seng and the Nikkei 225.

Commodities

Depending on the markets you trade, it is usually necessary to analyze the commodity markets as well. The most important commodities are typically:

• Gold – Gold is a good risk-barometer and quickly shows investors’ sentiment. Gold is also highly correlated to the AUD.
• Crude – Crude is an important commodity for traders in almost all markets. Commodity currencies (mainly AUD and CAD) have a high correlation to crude; energy stocks are even more correlated to crude; consumer spending, inflation and other macro variables are affected by oil prices as well

Now that we have a good understanding of what is going on in the world, we can start digging into our own charts and look for trades.

4.1 Update your trading plan

There are three things that can usually happen here and this is what I do every morning:

• I pull up the trading plans I did on the weekend and cross-check if anything happened that would cancel my trade idea.
• If I see that a trading plan is unfolding just as laid out, I will go to my checklist, validate that I have all my signals that I need for my system and then enter the trade.
• And if I see any new developments on any other market, create a new trading plan and set new price alerts.

This step usually takes 20 – 30 minutes because I have already done all the work during the weekend and just need to check the trading plans and my price alerts.

4.2 Reviewing my past 10 trades

Every trading session should start with a brief review of your previous trading day.

It’s not necessary to get too much into the details at this point, but you want to get an idea of where you are with your current trading. Look at your past trades and analyze the following:

• Am I in a losing streak and is it influencing my behavior and thinking?
• Am I in a winning streak and should be cautious of over-confidence?
• Have I been over-trading lately?
• Am I breaking my rules or am I disciplined enough?
• Do I miss trades?
• Do I need to adjust my risk?

Again, this step shouldn’t take longer than 5-10 minutes and you just want to see where you are with your trading right now and be aware of any potential dangers or bad behavioral patterns.

The good news is, there is almost nothing to do here since we have already created our trading plans, checked the charts in the morning and made sure that we are aware of the most important things.

The problem with sitting at a desk all day watching the markets is that sometimes you do things you don’t really want to do simply out of boredom. – John Porter

The myth of screen time

Many traders still buy into this belief that you just need to be long enough in front of your charts and you will become a better trader. This is total BS and the exact opposite is true: the longer you look at charts, the worse you become and the more bad trading decisions you will make.

With the help of my price alarms I do not need to check my charts at all for the most part. Every 4 hours, once a new candle is closing, I take a brief look to see whether one of my setups is giving a signal or not.

That’s really it and that’s why such an approach is ideal for traders with a regular day job!

To conclude, here are a few tips and things that I do during the evening to end my trading day the best possible way:

6.1 Journal your trades taken

When I have taken trades during the day, I enter them in my trading journal so that I can use that information during the next day for my preparation.

6.2 Managing trades

When I am in trades, I ask myself the following:

• Are there important news scheduled during the night and how do I need to adjust my trades?
• Do I need to move my Stop loss, exit partially or add to an existing trade?
• Then I go through each of my open trades and manage them based on my trading strategy.

6.3 Prepare your next day’s trading plan

Here I spend another 30 minutes per night updating my trading plans. I checked what has happened during the day, re-draw my levels, set new price alerts and look for interesting new patterns.

You probably say that this sounds like a lot of work. But just think where your current trading approach has led you and are you approaching trading with the seriousness it requires?

Most traders just don’t deserve to make money because they are not putting in the time and just hope to get lucky.

The problem we see with amateur traders every day is that they lack guidance and consistency in their approach. Instead of straying around, do yourself a favor and start following a serious routine. You’ll see the benefits within a few weeks.

“Discipline is the bridge between goals and accomplishment.” – Jim Rohn