Are You Really Prepared Before You Enter Each Trade?

I find my greatest pleasure, and so my reward, in the work that precedes what that world calls success. — Thomas Edison

Are you really prepared—in every way—before you enter a trade?  First of all, when you sit down at your desk before trading, how (not what) are you thinking?  Is your mind clear?  Do you feel calm and confident?  Your mindset is your foundation for making successful trades. If you are feeling stressed, tired, or generally negative, those emotions will be detrimental to your trading choices.

Once you confirm that you are thinking clearly and positively, you can look at the market objectively.  Check the news, and the European and Asian market levels, because the U.S. market tends to take its direction from those markets. Establish your overall bias, then establish your bias for the morning.  Which sectors are strong and which are weak?  Where are your open positions?  If you have old losing positions that need to be exited, please consider doing so.  You’ll be amazed at how that action alone can free up your mind—and, of course, your account—to go onto better opportunities.

Next establish support/resistance levels for the major indices. You may want to write them down.  Then focus on your intended trades for the day.  Do they agree with the market environment?  If they don’t, you may want to save them for another day.

If it takes more time to become prepared, mentally and with the other steps it takes to begin the trading day appropriately—but you make more winning trades because of it—it’s certainly time well spent for profits well made!