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My checklist that gets me set to trade

Before I sign out, I want to go through with you the checklist that I use daily. It has become an essential part of my proprietary trading, especially because I trade both currencies and indices, and both intraday and over several days.

Checkpoint 1

What is Asia doing? Every morning I go to Yahoo Finance and see what the Asian indices are doing. If they are all up, I expect a bullish Europe.

Checkpoint 2

I go through the major currencies (dollar, sterling, yen and Swiss franc) and their crosses on the weekly, daily, four-hour and 60-minute charts. I look for patterns, double tops, trendline breaks, and anything else that I can use to gauge direction for the day. I also look for Fibonacci ratios and expansion of range bars. In total, it amounts to 40 charts, and it takes me about 30 minutes. I make notes next to each pair where I see something of interest. It means I am ready for the trading day.

Checkpoint 3

I trade indices off a tick chart, but I still need to know what the daily and weekly trends are in indices.

Post-mortem

Once the trading day is over, the hard bit starts. Trading in itself is fairly mechanical, although controlling the emotions is something I have to be vigilant about every day. I easily get over-confident and trade way too big. After the day is over, it is time to ask the three Ws:

  • Why did I do that?
  • What could I have done instead?
  • What did I miss today?

As I said before, there is no better practice than doing, either with a live trading account or a demo. Keep a log of your individual trades, and make a level-headed review of each day’s trading, and you will learn more than any course or book can ever tell you.

Tom Hougaard

Published: 23 September 2011

You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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