Posted on: 11 Nov, 2019
Journaling trades, backtesting strategies, writing a trading plan, healthy lifestyle, good sleep, etc are all factors that make up the formula to have a chance at this game. Making money for a certain period of time is not the hardest part, consistency to keep making it and constantly be on the lookout to keep improving your craft is. Your routines can come a long way to help you in this journey. In this article, I will walk you through the routines that I personally follow, so that if I can help to turning your daily trading process into a serious endeavor, my aim will be accomplished.
To our Market Insights
My name is Ivan Delgado, Market Insights Commentator at Global Prime and veteran Forex trader. I am based in Bali (Indonesia) and these are the views from where I live.
Those that know me well won’t hesitate to think of me as a diligent person when it comes to the affairs that matter most to me and I am deeply passionate about. Besides the departments of family and health, trading also comes very high on that list. I like the intellectual challenge and the means it offers to an end goal of location-independent.
It’s no wonder that when our Discord user @Gideon asked me to elaborate on my daily process to trade the markets and what this routine looks like, I was immediately pumped into action.
Note, this article intends to be a framework of reference, a collection of tips if you'd like, to spark the interest of the aspiring trader. If I can help to turning your daily trading routines into a serious endeavor, my aim will be accomplished.
That said, each trader must go through a personal self-exploratory journey. Mine is a journey that from day one, I've never perished, hence you should interpret my routines as a template of someone who treated trading with the importance I perceived it deserved.
Here is what I can say with confidence. What's going to pay off in the long run as you define your routines, if my experience serves as an indication, is to accommodate, within an established lifestyle that you already enjoy, a set of habits that can enhance your preparation ahead of tackling the markets every single day.
You must be the ultimate decision-maker based on the activities you are involved in (work, family, commute, social, etc). If you don’t, sooner or later, that will be reflected in your results.
As part of my desire to progress as a trader, I am in a constant state of surgical introspective flow, in a chronic feedback-loop if you'd like, on how these routines assist me in becoming as efficient as possible in my time invested in the markets when trading, always with an open mind.
There will always be things to polish off or improve as part of one’s routines, just don’t despair. As a serious trader, I am constantly inclined to look for new hacks to improve my processes, that’s our default mode. Just make sure that the routines don’t burn you out, hence why I mention that lifestyle must come first.
You must reach a personal compromise with yourself by being committed to a regular routine that adapts to your life style. If you go down the rabbit hole of force-fitting a schedule to trade that is excessively demanding and you can hardly cope with it, it will manifest in cracks via physical exhaustion, issues at work, not enough time spent with your family, no social interactions, etc. Each person will face a set of unique circumstances, but blending trading into an existing lifestyle is a great start.
Alright, with the first vital and much-needed sermon out of the way, let’s dive into what my typical day looks like from the start until the finishing line when I hit the sack.
My alarm goes off anywhere from 5 am to 5.30 am Mon to Fri. I really aim to get a 7h sleep and I must say, even with 2 young kids, I’ve been blessed with some good sleepers.
Barely ever I have setbacks that may be distorting my sleep, and even when things go awry, my wife tends to do the heavy lifting by taming the beasts, not something that I tend to notice anyway as that tends to occur during my ‘alpha’ sleep state, so I won’t realize until the next day when she gives me the ‘eyes of the tiger'.
Moving on. Unless some force majeure, I am never in my office later than 6am, with or without threatened by the eyes of the tiger...
An early lesson I learnt as a father is that I cannot be too strict and pretend I can respect each activity as part of my daily routine to the minute with Swiss clock precision.
What I do instead is to slice these routines out into time slots. The 5am to 6am is the window to wake up, pop into a cold shower, quick coffee (no sugar), fill up a 1L bottle of water - hydration key - a 5m stretching protocol to spike my heart rate - blood flowing - , 10m samatha meditation, before sitting down in my office.
Without a doubt, it is in the first few hours of the morning that focus becomes my best weapon to produce the best possible results. The bulk of my daily trading decisions, unless I catch some intraday trades in Europe or the US, will be made in the first 30 to 60m from sitting down.
My performance hinges on my ability to be as humanly concentrated as possible while I scan through the charts looking to exploit opportunities.
This process has become much more mechanical these days, which I’d say is a very positive sign, as there tends to be a strong correlation between seeking excitement and poor results vs setting up a routine borderline boring at times that pays much better dividends.
As I sit to my desk, the first thing I’d do is to always read my trading plan, where I stipulate all the rules I abide by when trading.
After I’ve checked the news for the day, market drivers, conditions I am facing, areas of interest to trade, it’s time to ask myself, is there a trade available for the day ahead?
A distinction that must be made is that, as part of seeking out trading setups, I will first scan through my prop script in the crypto market. It helps to scout the whole crypto market (nearly 200 pairs Alts vs BTC and Alts vs USD) in under 10m thanks to a script I came up with which makes my life much easier. I literally saved easily 30m every morning.
If all the pre-conditions are met and my crypto model gives the go ahead, I flag the markets I wish to trade, so that orders can be entered via www.3commas.io at the close.
Once I’ve identified if any crypto makes it into my basket of tradable instruments, I swiftly move into the forex charts, where I will be looking to find exploitable setups based on the notion of trapped traders off the hourlY, 4h chart and daily charts. The concept of trading against trapped players can be watched in this video.
A study of the context in every market, which involves the analysis of nearby areas of demand or supply, is also a key component to account for. Once I spot trades to take by the NY close, I will enter limit orders, will define my stop, set my profit target for a minimal reward of 2:1 and let the market do its thing.
Below is an example of what a typical setup off the hourly will look like based on the concept of trapped-traders and shift in market structure:
Note, behind every decision, I go through a meticulous and laborious process to make sure that I am not ignoring my trading rules. There is no worse feeling that replicate past trading mistakes. For that, I have a couple of cheat sheets in my screens via a little app called stickies, which can be visible in your screen at all times.
It looks like this…
The time that goes from reading my trading plan, looking for trades and putting in the orders, takes anywhere from 45m to 60m. By 7am, I am done with all the decisions and that’s when I dive into the write up for Global Prime clients (The Daily Edge). It's a great exercise to keep me on top of the news while spreading out education to traders.
By the way, stay tuned, because all the trades that I’d be spotting as part of my daily process will soon be able to be shared with you all via the website we’ve built called https://www.pipculture.com/
During the course of the day, since I am interested to catch some of the forex intraday moves whenever possible, I will have another quick glance at two specific times. Firstly, ahead of the European session to bank on any moves seen in Asia, while I’d briefly come back to my desk around the US open to find setups before heading to bed.
What I do is to setup an alarm in my phone that goes off every week day at 1 pm and 8 pm my local time. This way, I make sure that I am always reminded to check the latest movements in the chart and avoid any possible distraction, which can easily happen as I tend to be deep in the weeds of other tasks.
As the European market open and volatility kicks in, ironically, that's when I step out of my PC as the other departments of my life (family and health) take over. I must say, one of my personal bedrocks that sustains my drive to put obscene hours of work so passionately in the Forex industry is exercising at Crossfit Wanderlust.
This is a picture of me and my wife. As you can tell by the video below, I kind of outgrew the ultra-tight shorts I used to wear, so had to be inevitably retired.
I cannot tell you how beneficial crossfit is for the stimulation of my brain, make social connections, and just get fitter. If one exercises systematically, the parts of your brain responsible for improved memory retention, intellectual capabilities, and thinking activate.
Sweating it out releases specific chemicals inside your brain, which leads to improved sleeping patterns, mood and stress. Besides, regular exercise also increases my level of endorphins in the blood, reinforcing the good habits of happiness, calmness and confidence, all critical when trading the markets. Helps keeping impulsive emotions in check.
Being fitter means you build a greater immune system as a defense wall against diseases, which means your improved health leads to fewer days at risk of being sick. What’s more, by working out regularly, you become a more disciplined individual, which translates into how organized and committed you are in other areas of your life like trading.
Not only I love how working out it’s helping me to stimulate my brain and take a much needed cognitive break outside the screens, but it’s a great personal challenge knowing that every day I look to push myself into new limits (weight-lifting, cardio, range of body motion, etc).
This is a video of me working out at Crossfit Wanderlust in Bali.
After I return from the crossfit box, it's all about spending quality time with my kids. This is our 'afternoon' train, a ritual I absolutely love. We usually spend time at the beach, where the kids and my dog (golden retriever) have an absolutely blast, while I too enjoy disconnecting after a long day.
Right after, I will return to my office to be updated about my positions, look for any potential trading opportunities around the NY open, although with the primary analysis performed in the morning, this scan of the charts is solely focused on finding trades as part of the plan designed in the morning time.
Before I step out of my office, I make sure I shut off my computers, both the main tower PC with multi monitors (4 to be precise) and my laptop (extra 3 screens). If you wonder how I can manage my positions when my PCs is turned off, the answers lies in the VPS I use. The main purpose is to keep MT4 open so that trades can be moved to break even.
Every Saturday morning I will fill out my trading diary with the trades entered during the week that was. I can tell you from experience that if you are not tapping into the insights that a trading journal can provide, the extent to which you can improve as a trader by filtering out the wheat from the shaft is going to be quite limiting.
In any endeavor that involves entering a highly competitive field, the power of constantly being engaged in feedback-loop cannot be sufficiently emphasized. The repetition of common mistakes is a very costly business that you must address, which is only going to be possible if you work with the tools that allow you to quantify the impact it has.
Wouldn’t you find it tremendously valuable to identify under what set of circumstances you tend to make the most returns? A trading journal should be seen as a filtering mechanism that provides insights on what’s working and what isn’t as part of your strategy, while identifying behavioral patterns that you must remove and/or reinforce.
You must continue to tilt the balance towards actions that are going to be conducive in eliminating unnecessary losses while working on those that bring the most reward. A trading journal is an excellent tool to know yourself as it becomes the mirror to refer to, one that reveals a huge amount of valuable information when committed to keeping it up to date. Personally, the one I’ve used since its inception is called www.edgewonk.com.
When the markets are closed, the two activities that will pay off the most in the long run, in my own personal experience, include the continuous tracking of your actions through a trading journal but also the build up of more robust layers of confidence in a specific strategy.
I personally go through a rigorous process of backtesting my strategies to determine if it has proven to be profitable over a large enough sample of trades. If you are serious about trading, this process should be ongoing. The more repetitions the larger the sample size to back up the robustness of your statistical edge = increased conviction.
By backtesting a strategy, it also helps me to move away from the common pitfall of letting the short-term results to determine my level of commitment towards my strategy. In the past, way too often, I made the mistake of letting short-term results justify that it was time to seek out yet another way of trading with the elusive thinking that losing streaks could be avoided.
The way I overcame this seemingly vicious cycle with no end in sight for many aspiring traders involved the combination of finding a strategy that resonates with my personality, and running result simulations as far back as I possibly could, with the positive results acting as the bedrock to take as reference.
Journaling trades, backtesting strategies, writing a trading plan, healthy lifestyle, good sleep, dedication, passion, etc are all factors that make up the formula to have a chance at this game. Now, what all these elements have in common is that they come under the umbrella of a well-defined process.
One must absolutely love the process. If you don’t, sooner or later, cracks will happen. I personally had an ‘aha’ moment in the art of following my own process to the best of my ability after reading a book that changed my mentality, called the “The Power of Habit” by Charles Duhigg.
The more you respect your process while gradually detaching from monetary goals, the more you can concentrate on the task at hand without being influenced by external factors. What eventually you realize is that building an account becomes a by-product of your consistent actions and routines.
By dedicating all your energy to all the steps necessary to perform the process flawlessly, without trying to alter what’s uncontrollable and randomly-dictated, such as the distributions of trading outcomes, you are giving yourself the absolute best chance.
Having a process also keeps you accountable and hopefully doesn’t make you sleep in the laurels. Making money for a certain period of time is not the hardest part, consistency to keep making it and constantly be on the lookout to keep improving your craft is.
If you are not putting the same amount of effort as you used to, if you eventually let the focus slip away, let me tell you, someone else is, and your skill level will pay the consequences. I’ve fortunately always had a high ethical approach to trading, and I intend to keep it that way.
Just because you get to a level of trading that seems effortlessly, it doesn’t mean you stop. You need to develop a growth mentality. If you are in a ‘growth mindset’ mentality, that is reflected in every area of your trading, in your desire to improve and engineer your trading plan with constant observations to keep the edge, in your motivation to tackle new learnings, add another book to your collection, watch hours of video related content. The learning never stops.
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