How to prepare for a trading day
Wake up and have a nice healthy breakfast.
Each morning being that you are a daytrader or swing trader, that you trade stocks, options, forex
or crypto you must have a plan. A plan takes off all the confusion and gives you an edge. I call my
plan “diligent job”.
The majority of retail traders don’t make a plan, they just start looking charts late in the morning
without doing any research. Research is important, you cannot trade without a good plan as you cannot go to war without research and study of the enemy.
The first thing I do every morning is to read the news. News of macroeconomics, news of
deals/contracts, news of upgrades/downgrades, news of stages of biotech stocks. This gives me a
general sentiment of what is going on.
If for example, today I have news on blockchain stocks or on certain currencies then I will be playing
Read and reread the news, this will give you an edge and I suggest you track news.
Learn which news is moving the stocks up and which news is moving the stocks down. Track.
From scanners, I start filtering the noise and I basically start making a watchlist. For those who trade stocks start looking at stocks in PM up more than 10% from the previous close with at least 150-200k volume. I personally focus on both small and big caps.
The gaps with PM volume that fits my criteria will be often the most traded and volatile stocks of the day.
Focus on 1-2 stocks and start following them. Various scanners out there, don’t spend too much money for a scanner, just jump into https://jtrader.co/ and each morning in the room you will receive the list of the best movers.
STATS & FILINGS
As a 3rd key factor, I start looking at stats for stocks and this gives me an idea if the company is healthy or not.
I look at the market cap, the deficit, the cash burning ratio, the float and the average volume traded.
For example, if a stock has a daily average volume of 500k but today in PM we have already 400k traded, surely we’ll have volatility on the stock. Remember that ” Volatility” means the possibility of making money and range to trade, traders must always look to trade volatility.
As a technical trader, I tend to rely on charts for my final decision. I start looking at a daily chart then a 30minutes or 1hr chart and an intraday small timeframe like a 1-5 minute chart.
I analyze which levels are the most important, the volume and I start making my forecast (a procedure that I teach in private 1on1 mentoring sessions).
Knowing the basic of technical analysis is key important for this 4th step so start learning technical analysis, candlestick charts and volume.
Now you have a total picture of your stock/currency/crypto/future that you are going to trade.
Remember to repeat each day this procedure and know that plan is the most important thing you should prepare each morning.
Good luck and see you in the room