Day trading is a field that attracts a lot of new people every year, and for good reason.
The opportunities to make money are there for most people.
If it is done right, trading can prove to be extremely lucrative.
So why is it that over 94% of new traders fail during their first year?
It’s a good question, and one I hear often…
Many beginners usually enter trading after watching pretentious and extravagant displays of wealth by so-called “successful” traders.
I encourage you to take these displays with a pinch of salt because any trader worth their money would be spending their time helping you with techniques rather than showing off.
They would also make you familiar with the reality of day trading…
And that is that day trading is NOT easy.
What you see on Instagram is just the highly filtered version of a trader’s life.
What you don’t see are the countless hours spent gaining knowledge, practicing, making mistakes, and learning from them. What you don’t see are the tears shed over losses. What you don’t see are the difficult days.
Any trader who has “made it” has only got to that point after much struggle and now has a set of habits that they continually do to keep their success going.
Today, I’m sharing some of my habits that keep me productive and disciplined.
Try them out, fit them in your schedule, and see how things change for you.
I have always thought that how you trade each day is a reflection of who you are as a person (and what’s going on with you internally).
That’s why it’s so important to have good daily habits.
These habits may seem to be disconnected from trading but if you look at the bigger picture, they fit perfectly in the larger scheme of things.
To trade effectively, I have come to stick to the following habits:
Habit 1: Being A Morning Person
Many day traders forget that day trading means trading during a specific time period and not throughout the day.
Just because it’s called day trading doesn’t mean you have to trade all day long.
If you do that, you’ll buy and sell stocks too often, and end up exhausting your resources.
While one of the best things about trading is that you can pretty much set your own hours according to your flexibility, it has to be said that you should not just assume you can trade at any time of the day.
So of course, there are some preferred hours in the day to trade.
9:30 a.m. Eastern Time is the time period when stocks first start trading for the day.
Both the Nasdaq and the NYSE open at 9:30 a.m ET.
Depending on the timezone and part of the world you are in, you’ll be able to figure out what that opening time is for you.
9:30 a.m. Eastern Time is a good time to trade, but I prefer waiting until at least 9:45 a.m. or 10:00 a.m. to start making trades.
No matter what timezone you fall in, it’s a good idea to be a morning person.
In fact, even amongst my students, I have noticed that the ones who start their day early show higher rates of success.
Before I start to trade, I give myself some time. I wake up around 8 a.m., and sometimes around 7 when markets are hot. I utilize this time to borrow shares to potentially short them.
From there, I spend a few minutes choosing 2-3 stocks I’ll focus on for the day, where I look at the market cap, float, and price range to select a mix that keeps my risk management intact.
I then trade till about 11 a.m.
In order to do all this effectively, being a morning person helps a lot.
This is an important time of the day for trading so being alert and focused is good.
So if you’re currently in the habit of staying up late and waking up late, try and change this gradually so that your trading can benefit.
Habit 2: Have Routines That Keep Me Focused
As a trader, you’ll mostly be working from home.
You are your own boss and you work for yourself, so being disciplined and productive is on you.
There is no one else to manage you or your time!!
Day trading on a daily basis can be quite monotonous too, so it’s easy to lose focus.
Before you know it, you can spend your entire day scrolling social media if your day doesn’t have a routine.
Or you could spend your time trading and not taking a break if you don’t schedule one.
Having routines and rituals that you do every single day keeps you disciplined.
Add things around your trading hours that keep your day full so your mind doesn’t wander.
Whether it’s working out or meditation or any self-care routine that you love, giving yourself a structured set of things to do brings about a sense of focus and calmness to your days.
I have a set routine that dictates when I wake up and when I trade.
After I am done with my morning trading, I have a nutritious breakfast that I look forward to.
Then I get on with mentoring my students and taking webinars.
I have a fixed schedule for my workouts as well.
Exercise is extremely important to me and I am consistent with it. But I plan my workouts and get the best out of them. Just like I don’t spend hours trading, I do not spend hours at the gym. It’s all about balance. I make time for rest too as that is imperative for the body and mind.
Depending on your fitness levels and schedule, figure out an exercise routine for yourself to keep your mind fresh. As traders, we’re glued to our phones for so long tracking news and staying updated, that it’s important to give both your mind and body a break.
As much as I like to keep fixed schedules, some days will vary of course.
Some interviews will come up that I have to make time for.
Or some social obligation I would like to indulge in.
So I accommodate those and curate my day accordingly.
But more or less my days remain structured.
When you know what you are going to do next, you are less likely to steer off course.
Habit 3: Having Hobbies And Interests Outside Of Trading
What is it that you like to do apart from trading?
Do you find comfort in journaling?
Is yoga fun for you?
Does dancing make you happy?
What are the things that bring you joy?
Make a list of them and do them often.
It is a part of your world just like your friendships and your hobbies and your other talents are.
Sticking to a schedule and organizing my day so I have specific times to trade ensures I don’t trade all day long. It gives me the freedom to live my life and do the things I enjoy, such as playing Starcraft, hanging out with friends, driving my cars, and relaxing by the pool.
I read a lot of psychology books that not only bring me comfort but adds to my growth.
Becoming obsessed with trading can be detrimental, and sadly it happens to a lot of beginners.
The prospect of making money is exciting but it should not make you consumed by trading. If it consumes you, you will burn out.
Trading addiction is a real thing and it can take you down a scary path where you become preoccupied with it and lose other parts of your life. This will take you into an endless loop of losing money and trying to make it back constantly aka revenge trading.
To avoid this, give your other interests just as much attention.
Your Next Steps…
Although trading is all about numbers and getting access to the right data, most new and experienced traders tend to forget that your daily habits can make or break your trading career.
Your habits can be the difference between success and failure!
The secret ingredient to success in trading is finding lots of good daily habits.
Traders that are able to shift their habits to suit the field of trading will make a mark here.
Around 40% of what we do on a day is habitual.
So fill up your days with good habits… and make winning in day trading one of those habits.
Start the change today.
Need guidance on cultivating better habits?
You need a mentor to guide you through them. My students are dedicated professionals who commit to formulating good habits and practices with me on my course The Freedom Challenge, which I created to help beginners make a mark in the world of trading.
In order to help understand the basics and the best approach to trading, I would highly recommend you make reading this blog a habit…
I hope you’ve found this article valuable, and that you will now pay attention to your daily habits and fine-tune them. You don’t have to copy my routine or habits so do what works for you..
Eventually, it will become a part of who you are.