In ancient times Aristotle said that quality is not an act but rather a habit. In the modern era Warren Buffett said that chains of habit are too light to be felt until they are too heavy to be broken. While day trading involves numbers and charts, it is carried out by living, breathing humans. The point of this for a day trader is that there are things in trading that routinely work and things that generally fail. The trick is to create habits of the things that work. The road to success is paved with discipline in creating and then employing those winning habits for a successful day trading routine.

Morning Preparation

A day trader routinely closes all positions before the end of the trading day. If this was not the case, and you have open positions you need to review them and make adjustments as necessary. Then the disciplined trader always reviews the previous day’s trades. They are constantly aware of what is working and what approaches need to be adjusted. Only then does the seasoned day trader check to see what today’s market is doing. Now is when the day trader checks news feeds to see where market volatility may occur.

Trading Plan

Day trading profits come from successful use of technical indicators and charts. Ideal day trading profits come from applying one’s skills to the most profitable trading prospects. Then each and every trade needs to involve risk management rules such as stop-loss and take profit targets. Each day’s trading plan needs to be based on a tested strategy applied with discipline in entering, managing, and exiting each and every trade. The day’s trading plan may need to be changed as market events dictate. However, risk management and discipline should never take a back seat to the excitement of a trade prospect.

Execution Timing

Markets go up and they go down. Day trading profits come from picking the optimal times of the day to trade as well as the optimal market and assets. For day trading stocks the most profitable time is commonly the first hour of trading each day. For commodity futures the best times will vary according to the commodity. The easiest way to control when your trades are executed is to only place market orders. However, the most profitable trades commonly use limit orders in order to get the best prices both on trade entry and exit.

Review and Reflection

Albert Einstein is typically credited with the saying, “insanity is doing the same thing over and over again and expecting different results.” The point for the day trader is that you need to routinely review your trading results, identify your problems, and then learn from your mistakes. It is wise to review every day’s results if you are having too many losing trades. If you have to adopt new strategies there is nothing wrong with not trading live until you have things sorted out. When you do this, testing any new approach in simulation trading before you put it into full use is the practical thing to do.

Physical and Mental Well-Being

Every hour of every day there are markets trading across the world. Thus, potential profit beacons continually. Humans, on the other hand, run on a diurnal cycle. We need sleep, food, exercise, and rest. Humans are also prone to greed and fear which happen to be the eternal enemies of investors and traders. The best day trading results over the long run come from a solid strategy continually applied with discipline. The best trading results can fall apart when you get worried, wired, or exhausted. Setting strict trading hours, avoiding trading when ill, exhausted, or simply confused is an excellent approach. Because the only exercise you get while trading is by moving your mouse and typing on a keyboard, you need to schedule times to rest your eyes and use your muscles. Daily walks, trips to the gym, or group endeavors like yoga all help to keep the day trader in good physical and mental health. Most commonly a balance of exercise, relaxation, and outside activities along with your day trading benefits both you as a person and you as a successful day trader.