Trading Checklist for Beginners (Before Entering Any Trades)

SnapBots
SnapBots
Dec 22, 2020 · 3 min read

Luck is when preparation meets opportunity. As a day trader, having a daily checklist before starting the trading day is crucial in maintaining one’s discipline and ensuring consistency when executing trades.

Therefore, professional traders often view their daily checklist as a ritual one must go through to prepare themselves before the opening bell.

However, creating one is easier said than done. Hence, we have identified five key points that should be included in your daily trading checklist.

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Checking the economic calendar and news

Apart from reading your morning papers, you should check the economic calendar on a daily or weekly basis to be aware of upcoming earnings or company announcements that may affect the stock price.

News affecting stock prices transcends boundaries. Hence, you should keep abreast of developments worldwide for news which might result in a shift of prices.

Spotting resistance and support lines

Before starting your trading day, it is important to identify key resistance and support lines across your positions to know the range where you should be trading in.

Should you be comfortable with technical analysis, you can also utilize technical indicators such as the Fibonacci retracement to identify potential highs and lows of the stock.

Identifying trends and checking volatility

By adopting a higher time-frame analysis than the typical hour or minute timeframes during day trading, you have the opportunity to identify longer-term and stronger trends to trade and profit off.

Additionally, ensure you check the volatility of the stock. This can be done through a variety of methods including monitoring the volume traded and leveraging on technical indicators such as Bollinger Bands.

As a rule of thumb, breakouts usually occur after a period of low volatility. Therefore, do take note of potential breakouts as you would not want to be caught off guard when one occurs.

Setting entry points

As the ringing of the opening bell brings with it a flurry of activities and unexpected price movements, you should be prepared beforehand to execute your day trades by setting entry points.

This can either be done through placing a buy order before the commencement of trading or by jotting it down on a notebook as a mental reminder.

Having stop losses

The best traders will know exiting a trade is as important as entering it. Therefore, you should set stop losses upon entering a trade to minimize excessive losses.

The need for such stop losses is greater for day traders compared to longer-term investors as traders are more sensitive to intra-day swings. These swings can wipe out daily profits if they are not monitored appropriately.

To sum it up, having a daily trade checklist serves as a structure for day traders to prepare themselves for a hectic day of trading. Crucially, one should evaluate their trades at the end of the day and draw lessons from them.

These lessons can serve to further refine your daily checklist to make it personalized for your trading style and ultimately, help you to execute better trades.

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SnapBots

Written by

SnapBots

Decentralized and Personalized Artificial Intelligence The new generation of deep learning bots. — https://SnapBots.io

SnapBots

SnapBots

SnapBots are deep learning bots powered by learning algorithms. For any facet & dimension, they optimize conditions, generate solutions, and get better at that. Big data is crunched at breakneck speed as relevant algorithms are applied to train up capabilities. — SnapBots.io

SnapBots

Written by

SnapBots

Decentralized and Personalized Artificial Intelligence The new generation of deep learning bots. — https://SnapBots.io

SnapBots

SnapBots

SnapBots are deep learning bots powered by learning algorithms. For any facet & dimension, they optimize conditions, generate solutions, and get better at that. Big data is crunched at breakneck speed as relevant algorithms are applied to train up capabilities. — SnapBots.io

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