Your Option Routine Should Be Routine

Following a routine is a good thing, especially if it is a healthy routine. Take, for example, a nutritious diet. It can lead to a better you both physically and emotionally. The same can be said about your option trading. Without a routine forged through a trading plan, you may be wandering aimlessly around in breakeven land…or worse yet deficit land.

Think about it for a second: Things that are routine are generally easy. Option trading, most would acknowledge, is not easy -- especially at first. So, doesn’t it make sense to develop a routine and make it as easy as possible to succeed? Option trading is difficult enough. If you cannot improve your odds, it may be a road less traveled to profit land.

If allowable, have a pre-market routine planned out. How are you going to look for new opportunities and how are you going to address any current positions? These are just a couple of issues to consider, but it should be simple and straightforward. In other words, have it planned out with a checklist.

How will you handle the market open? Are you working, or does the market have your full attention? Clearly, this will have a big effect on your routine. When do you like to exit or enter trades? And lastly, what about when the market is closed for the day? Will you review trades every day or as needed? Will you do post-mortem work on the weekends or another time when the market is closed?

Again, you should consider a list of bullet points for your checklist, and it can be as long or as short as you want it to be. Clearly, these are just a few points to consider, but they should be enough to get you thinking.

Just like creating and writing a trading plan, there are several things to consider. Changes and deletions will be made along the way because this is part of your trading plan, which needs to be a road map to your potential success. The goal is to automate your routine as much as possible to give you the best chance of beating those emotional demons that trading can give life to.

John Kmiecik, Market Taker Mentoring

Trader Education