What Are Your Best Trading Practices?

 

When we study our successful trades--and especially the processes that are part of our most successful trading--we gain insight into what we do well in markets.  No amount of work on our emotions can ground us in our strengths.  If we are not explicitly focused on our best practices, we cannot possibly trade at our best.

In this post and subsequent follow-ups, I'll share a few of my best trading practices.  Together, these form a template that not only guide my trading, but also anchor my efforts to be my best self.

The first best practice is to be extremely explicit with what is going on in the market across multiple time frames.  I watch very short-term market behavior and minute-to-minute indicators such as NYSE TICK, and I watch what has been happening through the day and last few days, and I observe how the market has been trading longer term (changes in volume, breadth, etc.)  The best trade ideas and trades come from seeing clearly across these time periods.  When what is happening shorter-term makes good sense with respect to what is happening medium-term, and when that is making sense with the bigger picture, the result is a sense of clarity.  My best trades come from seeing clearly, having a scenario in mind, and knowing--explicitly--what I need to see to validate or contradict what I'm seeing.

That strong degree of clarity only comes occasionally during a day or week.  The willingness to wait and wait and wait for everything to line up and everything to make sense is perhaps the best practice of all.  If I need to trade, I'll trade my needs, not the market.

More to come--