The Habits and Routine of a Successful Price Action Trader
Trading success is a result of discipline, and having a daily routine is a key component to becoming a disciplined Forex trader. It is so easy to fall off track and start making emotional mistakes as a trader, and you really need to consciously stop this from happening by having a daily routine that you go through every day. A daily trading routine will add a degree of order and stability to your trading, which is very important to your mindset and thus to your long-term profitability. If you do not currently have a set daily routine for your trading activities than you need to start developing one, trading absolutely cannot be a haphazard endeavor. The more objective you can make every aspect of your interaction with the market, the less likely you will be to commit emotional trading mistakes.
Limit screen time to a certain period of time and time of day
The first task in developing a daily trading routine is to know what times during the day you will be analyzing the market. You will obviously need to work around other responsibilities such as your current job and your family duties. If you find that the only time you have for checking the market is an hour before you go to bed, than you must work with that time period. The best times to analyze the market are around 4-5pm EST (New York time), which is the New York closing, and then around 1-2am EST, which is just prior to the European opening. Now if you can’t stay up until 1 or 2am EST, that’s OK, just make sure you analyze the market at the same time each day.
Once you have decided on the time period you have available for market analysis you then will need to decide on how much time you want to devote to scanning for price action trade setups and(or) for monitoring any previous open positions you may have. Limiting your screen time to a specific time allotment is very important to your mindset and hence trading success. Trading off the daily charts is the best time frame to trade because it filters out the “noise” of the lower time frames while also providing you with some high-quality trade setups to trade each week. Once you become skilled in price action analysis you can scan each currency pair that you trade during your given time period each day. If there is no setup than you move on to the next pair, if you find no setups in any pairs than you are done for the day! Any further analysis beyond this point will only hurt your chances at Forex trading success. You will start to over-analyze the market and dig up reasons to enter a trade and enter low-probability trades; I promise you this will cause you to lose money over time.
Follow a Price Action Trading Plan
If you are a price action trader you know what setups you are looking for each day in the market. Since this is the case you should have a written out and clearly defined trading plan of what you are looking for each day during your given time period and allotted time. If you do not have a clearly defined and tangible trading plan than you need to get working on this right away. Keeping your trading plan “in your head” doesn’t cut it either, you need to read it, every day. A clearly defined trading plan should include entry signals, exit strategies, risk management plans, as well as long term goals; these are factors your forex trading plan needs to include at a minimum.
Following an objective trading plan will give you precise setups to look for each day, it will help you focus harder and give you a guide to follow each day while analyzing the market. Market analysis needs to be structured; most traders have no structure to their daily routine which is a result of not having a trading plan. How can you become a structured and disciplined Forex trader if you don’t even have a plan for what you are doing? Would a builder build a house without blueprints? No, of course not, it would fall apart, very fast. Yet, almost every person that attempts to become a forex trader approaches the market with no trading plan or sense of why one is necessary. Operating in a structured manner in the uncontrollable Forex market is simply a necessity to you making money on a regular basis. Luck will only reward you for so long before it punishes you, there is no room for luck in the consistently profitable trader’s vocabulary, simply put; professional traders do not need luck because they have a clearly defined trading plan.
Keep a trading journal
Keeping a daily trading journal is important for a number of reasons, but not for the reasons you might be expecting. Many trading books and other educational sources will mention trading journals briefly and say that you should write down the parameters of each trade you take so that you can analyze what you did right and what you did wrong. While there is some value in recording this information I feel that it misses the point. Forex trading success is almost entirely dependent on how well you manage your emotions. The real value that a daily trading journal can provide to you is feedback on how you are feeling each day about your trading activity as well as feedback on your day to day emotional state.
It is very important to right down how you feel before entering a trade and after wards. Write down if you won or lost on the trade and then write down how you are currently feeling. This will do two things; it will give you a task to do right after closing out a trade which will give you time to calm down from a big win or a loss so as to help keep you from jumping back into the market. Also, it will begin to paint a picture of how emotion is tied to trading success. If you are honest in this trading journal about how you are truly feeling before and after a trade, you will begin to see solid evidence that the degree to which you are emotional in the market is the degree to which you lose money.
The other helpful feature of keeping a daily trading journal is that you can write down (or type) your own daily forex market commentary. This will allow you to keep a running tab on market conditions and will generally just make you more aware of what is happening in the market. It is helpful to stay connected to Forex price movement each day and to have it take on some context in the broader market picture. If you are going to be away from the market for a few weeks don’t just come back and jump right into a trade. Give yourself a week or so to record daily market commentaries so that you can get a feel for the current ebb and flow of price movement, it’s important to stay in tune with the Forex market.
Cleanse your mind and body rather than putting extra time into market analysis
As I briefly stated earlier, too much time spent analyzing the Forex market beyond what you have previously allotted for yourself will usually work against you. A previous article I wrote called “Set and Forget Forex Trading” explains this concept in greater detail. If you find yourself with extra time on your hands and you start looking at charts or analyzing economic data outside of your allotted time slot than it’s time for a hobby. Starting working out regularly, any regular exercise will help you focus better on all of your daily life tasks; it will make you feel better both mentally and physically. Time spent exercising is much better than spending extra time analyzing the market; you can control your body and your mind but not the market. If you still have extra time after exercising, then read a book that expands your horizons on some topic, it doesn’t have to be trading related, it can be anything, reading exercises your brain and keeps your cognitive wheels greased. Remember that your daily routine is paramount to long term success in the market, don’t underestimate it. Forex trading is a business and should be treated as such, any successful business operates under strict routine, you should be no different as a Forex trader. For more information on the habits and routine of successful price action traders, checkout my price action trading course for more.
55 Comments Leave a Comment
Thanks Mr. Nial! For the fact that you put on the correct way to success!
What do you mean by “analyze the market”? looking for past setups ,present setups and/or?
Thank u for guiding us to think and act as serious forex traders, this will truly inspire us. Nial
Most important article for advanced trader !
That is true that overtrading can kill your account, and make your life miserable. I nearly blew out my account for a month of too much trading. Luckily I found Nial’s site, which now help me get back to my routine and learning to trade on my demo account. Thanks Nial for the great article!
Rightly said Nial,Trading is a business, and I agree.The earlier we understand that the better and profitable to our business.
Thanks, Good stuff, Been there done that… Am in a mess and look forward to getting it done right…
I am one of those who started trading before training, so I know its true!I blew up a fortune in the same month I started. Then I started training and went back.Thank God now.
Taiwo from Nigeria.
This is very good article. The fact due to which it impacted me because i thought all these things yesterday as i experienced variad emotions while trading. but being a new trader i was not sure whether what i am thinking (not overtrading, keeping journal to record feelings etc.) is right or wrong. But this article instill confidence in my thinking.
Great article Nial, I will keep refering to it if I find myself drifting back into bad habits. Cheers
This is a gr8 article.. It provides all the useful info in order to prevent haphazard situation which sometime arise in the forex market
Wow ! thank you for this fantastic article !!
I found it very useful..
It will be good for me to start and follow the written daily routine.
Thanks a lot.
I am lucky i have visited your website in my early stage of my FX trading.. Just This article give me 10 years experience… Thanks a lot
I am a month old and it’s like you’ve been writing my script!
Lost 70% of my “capital” but went back to demo a few days ago and I am being strict on myself AND… I have not lost a trade se I now have to enter WHEN my rulebook says ENTER.
Thanks Nial, I’m very thankful for the articles you post, it has help me changed the way I think about my trading plan and discipline, you are far more mature than your age, that is a very special gift.
This is awesome Nial…Thanks a bunch
I will become a successful forex trader with your help.
Hey man, Great stuff.
Will take your course sooon.
Hi Niall, Thank you so much for taking the time to explain and help others improve their trading. I plan to read and study every single article and piece of information on your website to help my trading career. And when i finally nail it i plan to teach and help others to reach their potential as a trader. Shane
Thanks for this Nial. I’ve been away from the forum over the winter months doing my other gig, but upon returning I’m glad to find this article. I was hoping you’d give us some insight “into your head” a bit – how you analyze potential trade setups & so forth… This one is the key. I’ve noticed in my own trading that those few months “off” helped my account balance considerably. You once wrote me to be careful of over-trading, and now I know what you meant!
I took your advice on having a set time each day, a plan and keeping a journal – It has begun to change my mindset – I recently did some “mistakes” on my demo account and I was really excited – Why ? Because, although they were relatively minor, they screamed out at me like “WHAT ARE YOU DOING !!!” My mistakes are getting fewer and the ones that are there are starting to stick out to me –
Thanks for the article it really helped discipline me in applying Trend, PAS, Risk reward – I’m now trying to learn to wait patiently for the ‘right set up’ rather than getting really excited and jump on the first fakey I see!
I thank God that I found you !
Thanks for the excellent article. Its pregnant of usefull information and will surely make me a better trader tomorrow. Keep them rolling
Very insightful. You have a very holistic view of things which is very refreshing and it made the article very helpful. Thank You.
thanks for all the advices, really apreciated!!!!!
I test your last commentary of AUDJPY on last Friday and it was grate. I got 166 pips and it was the first time that I trade without any stress. I did not get your course but surely I will get it very soon.
It’s G’Day Mate!!! :)
Once again great article Nial, Thanks
price action trading off confluence levels in the direction of the trend is the ONLY way to trade successfully. thanks Nial for this self co- ordinating article.
Manny thanks to you guys for deeming it fit to part with this great and important aspect of trading that most of us under rate,i wish i could cling to this religiously
Thanks Nial, very good. However, I have read about the importance of keeping a trading plan again and again and didn´t do it. Until I read in a book that you really have to ask yourself : what type of trader am I really ? There are 2 types, hunter and farmer. Both have totally different mindsets and view time spans differently. A farmer will love to plan his time in advance, keep track of his progress etc. A hunter will never really do this, or feel awkward. As I am a hunter, I now funnily started to write down my trading plan and keep a diary. But not anymore because I felt ashamed of not doing it, rather because it is fun and does in fact teach you a lot. So to all hunters : Nial is right but dont think you are a boring accountant if you follow these rules. Try them out, experiment with them, and find the individual truth behind all of this….:-)
Nial, much thanks for your continual sharing of discipline with FX trading….Its been 6yrs fx trading and i am returning back to the basics of Discipline you have written about… I think to start a new by moving up to 4hr and daily from the smaller charts… also having a trading plan written down on paper so to review how well I followed my plan… I have been to emotionally tied to my trades, i think the above changes will break this link.. It has been Painful not following my Plan, (which changes when its in my head), you made a difference, Good Day Mate
Thank you for posting this article…Yes, a business indeed,on a full-time basis one day…
Well said and communicated, there Nial.
Thanks Article Nail. Your features in this business is great. Be rewarded with a lot of good things by GOD ALMIGHTY.
This hits the nail on the head. I have to detail my plan especially the emotional side. It is great to have a mentor such as you
thanks ,great article value of time frames,having a trading plain,follow the game plain,trade the trend ,money mangment and displine. all are so important and related to each other thanks again
I had through your good advise artical and it is very help full to me.A few days ago it was happened to me, I entered the market blindly and lost control. I shut down the computer, have shower and go to bed.Thank again for your artical advice
Excellent Article Nial. Thanks a lot for sharing your ideas and setups. Your education is great. Thanks again.
thanks Nial for reminding us what we should be doing and sometimes don’t
this is a very helpful article, and with the Set and Forget strategy you wrote about before, which was excellent, for me it is all about getting and keeping a life as a trader. one gets so sick of sitting in front of the charts and not knowing why or what for and then the impulsive losing trades come. yes, routine in every aspect, whether checking for set-ups, keeping to specific market times, writing emotions in a journal or taking exercise…the discipline has to come from me cos no one else is going to do it for me. and i do not do it well enough at all – this article will help structure that better. this is serious business
As I have a small capital base, my trading plan is to trade the shorter time frames ie 15 to 60 minute charts initially then gradually move to 240 minute and daily. This allows me to use smaller stops to keep within my money management rules and also to get experience quickly.
A nice educational read. Appreciated
Hi Nial Thanks for a great article…
Great article, the truth is most traders are indisciplined and do not take the business serious enough to have a structure, over trading and over analyzing the market is the outcome paired with consistent losses. This article should open our eyes to the need for organized trading plans and structure. More profits , less stress!
Delvin – jamaica
One only understands the importance of all these things after you have walked some road on this profession, and have realized that the last wall to braek thru is yourself… It is the last guardian in the door that leads to the consistent success in this business…
Great Article Nail, thank you very much!!
thank you for sharing and explaining ..you are God sent to new traders…thank you . once again and God Bless
Quite nice Nial, thanks a lot for sharing such vital info.
Very good information…the smaller time frames can be tiresome and having a set schedule does provide a better trading atmosphere for me and my trading..thank you for your constant contributions…
Nial – great article. Thanks for these helpful tips and reminders. Keep teaching us Price Action.
This is a fantastic article. Thanks.
Thank you for this compact article.
This is a fantastic and compact article. All the parts are taught separaterly here and there, but this is unique symphony of all of them together. Thanks.
Your absolutley right, trading is a serious business and a serious routine must be adopted in order for anyone to succeed and be profitable. Thank you for this article Nial, asa newbie trader, I will be adapting these ideas to my trading. Take care.
Nice article -Keep it up! thanks.
Nial,thanks for helping me realise the value of the bigger time frames. I was so fed up with trading the 15 min. charts and all the noise happening within these smaller charts.I was determined to be consisstant trading them.Just wasnt happening for me.
Your article will help me to adjust my habits of to much screen time. That will come once I learn your setups and apply them to my trading as consistant as posible.Having set rules on entering and exiting each trade really will help my emotions.Since I started trading your method my emotions have been at ease.Its so much better to see the set up and either enter if its at the entry you want, or put a pending orders in with stops and t/p.As you say also have patience.
Today I will get some exercise, I will ride my bike 44 miles. Got to keep this 57 year old body in shape.
Thanks Nial- Larry