I swing trade stocks and am also starting out on day trading /YM (sim trading e-mini Dow futures for now). Before each trading session starts, I do some prep work but i am not sure if they are sufficient or in depth enough and would like advice and opinions on whether there are other things which need to be looked at.
For swing trading stocks, my entry chart is the daily and secondary chart is the weekly. What i do is:
1) Check if price is approaching major support or resistance levels and also mark out obvious pivot highs and lows on the longer term secondary chart.
2) Check the trend, check if price is approaching S/R levels (based on the entry and secondary chart timeframes) and look out for setups on the daily entry chart.
3) Look for dividends and earnings release dates and avoid trading the stock near to those dates
4) If there is a setup, i find the entry, stop, target and check if the stop is within 1.5% risk
For day trading /YM, the entry timeframe is 10 minutes and the secondary timeframe is the hourly.
1) On the hourly chart, record major pivot highs and lows as S/R levels and note the latest trend
2) Check if price is approaching major S/R levels on the hourly chart
3) On the 10 mins entry chart, record noticable pivot highs and lows as S/R levels which may not appear on the hourly chart
4) Check for day high and low for the current and past 1 or 2 days
These are the pre-trading session preparation I do for stocks and /YM. The data I look at are technical data based on the chart. Are there other price action, timeframes or price levels which should be looked at ?
Also besides technicals, are there other fundamental data to prepare oneself? e.g. For the stocks I trade, i have a basic knowledge of what industry it belongs to but that's about it. What about for stock index futures?
Have you collected stats and know the probabilities on each trade setup you will be trading? Have you back tested and walk foward tested on at least a few years data? Do you know what potential draw downs to expect? Do you have a profit expectancy? These are key aspects of trading that many new traders completely ignore. They will most likely make the difference between blowing out your account and making money.
If the answer is no to the above you are not ready. But good news is you will find much of the info you need in this forum to start doing these things.
If the answer is yes to the above. Congrats you are way ahead of most new traders and might survive.
I realize you are looking more for specifics on preparing for trading day. But this is what came to mind when I saw your thread. My comments are more geared to being prepared for trading in general.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Last edited by liquidcci; July 16th, 2012 at 11:29 AM.
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