Time Management in Trading
Time is the scarcest resource and unless it is managed properly nothing can be managed.
– Peter Drucker
September proved to be such an awesome month for many of our traders and it brings my attention to applying some of the time management principles that are still easy to execute and produce magical results. Here is where I would start this month.
Top 2 questions to ask to make the most of your available time to trade profitably
- Does this activity promise to multiply my overall effectiveness
- Does this trade satisfy my top 3 entry rules
Let us dedicate October to keeping things simple and succinct in our Trading analysis. This will help you focus on simple Prop rules and execute. This will also help you internally motivate yourself. Before each trading session ask these 4 questions (closed eyes process and internalize the trade).
- Why not?
- Why not later?
- Why not now?
Initially when I started to trade every time I asked myself these critical questions I was able to hold off certain spontaneous trading decisions – Now being an intra-day mindset trader this was one area I had to master ie instinctual trading. As a beginner it is easy because all the rules helped me track each of my trade but after sometime cleverness set in. Then tracking my trade journal back it was easy to discover that I was not asking any more questions but just entering trades as they showed up and had noticed that the trend lines were even all over the place.
Effective productive people start themselves on the most productive and important task first:
Please identify which is your most important task (the first step) when you open up your screen and start analysing your charts.
After you have identified it go to the next step.
Successful people have a clear future orientation:
How would you apply this to your trading. The way I do it now is that I see the result of my trade on the time frame I have decided the trade. Let us say I have taken a trade on a 4 hour chart. I will have a target in mind (a clear precise target based on my strategy specific criteria) then I will ONLY move from this target if I have a significant reason to do so. As a trader I have my reasons also written out precisely – when/ why to move out of a target position either to move the target further in profit and move the stop loss or take profit. Either way this EXIT is decided before my entry. It is essential that I have done this prior to placing my trade. i suggest if you don’t do this as a habit just for this month do it on every trade and don’t chop and change. Just do exactly the same trade every day.
Successful people have a long time perspective:
A Harvard university study by Dr Edward Banfield clearly shows that after more than 40 years of research “long time perspective” is the most accurate single predictor of upward social and economic mobility in USA. It turned out to be more important than education, race, intelligence and connections. This concludes that your attitude towards time has an enormous impact on your behaviour and in turn your choices. Your choices determine your destiny. People who take the long- time view of their lives and careers generally make much better decisions about their current investment of time in any activities. Apply this concept to trading and every day as a first step start with analysing your daily cahrt and support and resistance levels before taking any short time view. See your trading strategy evolving over the next 6 -12 months. Each day see progress. And surely you will be a profitable.
Till next time
Enjoy a super profitable October like September has been for so many of our students. Congratulations everyone on a marvellous trading month.