7 steps in a perfect trading routine

Last Updated: 2 May 2023

We all agree that our daily habits and routine are what determine our success and failure in a particular task. This includes trading. So, for profitable trading, you must have a perfect routine. Here are some easy steps which you can regularly follow to have an ideal trading routine.

Pre-Market analysis

Before the opening bell every morning, these are some tasks which can help you in profitable intraday trading.

1. Start your day well before the opening bell; it is a crucial time where you can get a feel for the day’s market, find potential trades, create a daily watchlist, and analyze your current position.
2. For efficient trading, you must be updated with the current news and the fastest way to reach there is via cable television, or use the 5paisa mobile app at a flat brokerage of Rs.10/order (irrespective of trading amount), which provides our research advisory and support.
3. Three important events you should be aware of are: The market sentiment (bullish/bearish) Sector sentiment Current holdings
4. Analyze the various special events that are going to take place in the near future, like upcoming IPOs, takeovers, mergers, acquisitions, and other similar events. These are opportunities which can deliver many rewards but often carry a higher amount of risk.
5. Analyze a particular sector before you invest in it. For example, you can say that IT sector is bearish/bullish by analyzing popular IT stocks. Make a list of companies you want to trade in, then categorize it based on opportunity, entry price, target price, and stop-loss prices.
6. During trading hours: The market happens to be the most volatile in the morning, just after opening bell, between 9:30 and 11:30. You can actively trade and gain profits by focusing on the list you made during this time
7. In the afternoon, between 12 AM to 2 AM, markets mostly become stagnant. However, you can use this time to observe the market and other stocks here.

The time just before closing bell typically induces another wave of volatility because people are predicting the stock to go up or go down the following day. Many intraday traders hurry to close their positions. A trader will trade in these 1.5 hours similar to how he did when the market opened.

After the closing bell

You should not go for after-hours trading if you are a new trader. Just watch and write down your observations after the closing bell. Spend an hour every day to prepare your watchlist and strategy for the next trading day and study your past trades.

It is always useful to remember why we got into trading in the first place. Once an efficient daily trading routine has turned into an ingrained habit, it will become an essential part of you, and at that point, your every step will be effectively towards achieving success.

One point that every successful professional has shared is that they have gone from regular routines to ingrained habits that implicitly guarantee consistent and on-going success in their field.