Routine & Habits VII: The Routines and Habits

Well folks this is the biggie. All I have written before in this series comes down to this post.

It’s my belief that participants attending seminars would obtain greater benefit from a seminar if they adopted, for 30 days after the seminar, a set routine to internalize the seminar concepts. At the end of the 30 days, the routine would become a habit and the seminar participant is then free to choose whether to adopt all, some or none of the content. The key point is that until he has internalized the seminar content, he is not in a position to choose.

I remember my first Market Profile seminar. I flew from Sydney with two mates: one was a technical trader working as a technical analyst for a broking firm (let’s call him John); the other was a day-trader (let’s call him Paul).  Paul and I ‘lost’ John pretty early in the piece. By the middle of the first day, John was doodling and post session discussions revealed that he had taken the view that the Profile was not for him – it was too far removed from what he knew.

Paul and I liked the idea of the Profile but we struggled with the application. It took me 9 months before I got comfortable trading the Profile way – what enabled me to persevere was the fact that I set a daily routine to follow. Each day I set the goal for that day and followed the set routine.  Part of the routine involved reviewing whether I achieved the day’s goal and if not what I had to do the next day to complete it. I would not move to the next topic until I was satisfied I had mastered each day’s goal.

Trading routines have a similar objective. Their outcome is to produce habits of success. The routine you set is one that is personal to you. Below is the one I follow – it suits my personality; treat it simply as an example.  Experiment with a routine, content, time of day, order of activities until you find one that sits comfortably.

Monthly Routines: 

  • Review summary of the psychology and equity journals. Are there any empowering patterns? Are there any disempowering ones? I look for the patterns under the headings: setups, instruments, and personal behavioural patterns. For example: is there an instrument that bore the preponderance of losses for the month? If so, did the losses occur for a particular setup? What was the difference between the current environment and the most recent environment that I made money in this instrument? In this setup?
  • Review equity journals to determine if I am on track. I look to make about 22% per year so I am looking to make about 2% per month. If I am not on track, where can I make improvements? What has to happen for me to return to budget? Etc……

It’s important to understand that I make these enquiries from a stance of curiosity – there is no question of blaming myself for errors or feeling anxiety because I am behind the eight-ball. True if I have had 4 consecutive losing months or more than 12% loss in any rolling period, I take an enforced holiday of at least a week. But this is in the form of a breather to put a space between the losses and me and not as a form of self-punishment.


  • Analysis of markets with a view to preparing a short list of possible trades in the coming weeks and a watch list where trades are unlikely but possible if certain events occur.
  • Analysis of psychology journal – summary of daily entries for possible patterns (see above entry in Monthly Routines).
  • Analysis of equity journal – to ensure that there are no out of boundary losses.


  • Download and update data
  • Update psychological journal
  • Update equity journal
  • Prepare for trades – plan, and visualize
  • Ensure day’s activities are planned around trading activities.
  • During the trading day, a series of routines to ensure my ‘rat brain’ is not running my trading.

That’s it. I hope you have enjoyed the series.

4 thoughts on “Routine & Habits VII: The Routines and Habits”

  1. Ray

    Your post is a good reminder to us all that it is the time of the year to look into our new vision and goals for 2008.

    Touching on trading plans, we need to see the market on three time frames or more simultaneously.

    Alexander Elder’s book: Come into my Trading room is a recommended read.

  2. Ray,

    Thanks for series – most interesting.

    FYI – The blog has become a daily ‘must read’ for me after being linked through from I’d take this opportunity to say thanks for the effort and look forward to more thought provoking output to come.

    I’ve just purchaed ‘The nature of trends’ on the back of the blog and look forward to reading this.


Leave a Reply

Your email address will not be published. Required fields are marked *