Routines – Pre-Session

Table of Contents

• Routines – Pre-Session
  • Personal Preparation
  • Trading Preparation
  • Initial Analysis
  • Final Preparation

Routines – Pre-Session

Personal Preparation

• 1. Initial Check of Physical and Mental Health
  • a) If suffering from any ill health or stress, consider the need for cancelling the session, reducing the session, reducing position sizes, or implementing periodic checks of myself and my performance.
  • b) Seek independent opinion from __________.
• 2. Physical
  • a) Ensure sufficient sleep, in accordance with the 5/12 fatigue management plan.
  • b) Ensure sufficient and healthy food intake (sufficient to last till first break)
  • c) Fill water bottle and place at trading desk
  • d) Conduct a relaxation and breathing session
• 3. Psychological
  • a) Review Motivational Journal

Trading Preparation

• 1. Platform & Computer Preparation – Part 1
  • a) Virus check, clean & restart computer
  • b) Open platform with sim account
• 2. Review the previous session.
  • a) Trading Journal & Log
  • b) Lessons learnt (from previous session Log)
  • c) Sim trade (market replay) any key sequences from previous session
  • d) Sim trade – execution drills
  • e) Goals recommended for today
  • f) Close sim account.
• 3. Prepare today’s Trading Journal and Log
  • a) Market
    • i) Confirm no contract rollover (next date due: ________)
  • b) Session timings
  • c) Balance & position sizes
  • d) Review Economic Reports
  • e) Record daily goals
• 4. Platform & Computer Preparation – Part 2
  • a) Open platform with live account
  • b) Synchronize system clock
  • c) Set alarms for prior to session start, or any potentially volatile news event I wish to watch prior to session start
  • d) Set my candle timer
  • e) Confirm order entry / DOM screen is correctly configured – contract, position sizes, order strategy (stop, limit parameters) and one-click order entry

Initial Analysis

• 1. Define Structure
  • a) Define a structural framework within which our trading timeframe price action will move.
    • i) Identify areas of Support or Resistance on the higher timeframe (30 min) chart based on swing highs and lows.
• 2. Define Trend
  • a) Assess the movement of past price action within our market structure framework.
    • i) Identify significant swing highs and lows on the trading timeframe (3 min) chart.
    • ii) Identify the trend direction – up, down or sideways
• 3. Identify Strength & Weakness
  • a) Analyze price movement within the trend to identify signs of strength or weakness.
    • i) Analyze momentum of recent price swings
      • (1) Compare the momentum of the current price swing with the momentum of the previous price swing in the same direction? Is price faster or slower than before? What does that mean?
      • (2) Compare the momentum of the current price swing with the momentum of the previous price swing in the opposite direction? Is price faster or slower than before? What does that mean?
      • (3) Is the current price accelerating or decelerating? What does that mean?
    • ii) Compare projection and depth of recent price swings
      • (1) Increased projection is a sign of potential trend strength. Decreased projection is a sign of potential trend weakness.
      • (2) Increased depth is a sign of potential trend weakness. Decreased depth is a sign of potential trend strength.
    • iii) Identify signs of failure to continue (i.e. failure to meet expectations).
      • (1) Failure to continue is a sign of weakness
    • iv) Identify signs of strength or weakness via any miscellaneous methods
      • (1) Volume analysis
      • (2) Market Internal indicators
• 4. Identify Future Trend Direction
  • a) What is the likely path of future price action? Determine the likely path of future price action, in accordance with the six principles listed below.

Six Principles of Future Trend Direction:

Within the S/R framework:

• First Principle – We expect an up or down trend to continue in its current state until the next S/R barrier, unless displaying evidence of weakness within the trend.
• Second Principle – When an up or down trend shows evidence of weakness, we expect a higher likelihood of a complex correction rather than a reversal, until such time as the market shows both price acceptance and strength in the new trend direction.
• Third Principle – A sideways trend within the framework is expected to continue in its current state, unless displaying evidence of strength towards the range boundary.
• Fourth Principle – When a sideways trend shows evidence of strength towards the range boundary, we expect a break of the boundary. We observe the behavior of price post-breakout for clues as to future direction:
  • Weakness following the breakout – the expectation is for a breakout failure and reversal back within the trading range.
  • Weakness on the pullback – the expectation is for a breakout pullback and continuation.

At the edges of the S/R framework:

• Fifth Principle – We expect a test of our framework S/R to hold, unless strength is displayed on approach to the S/R boundary.
• Sixth Principle – If strength is shown on an approach to an S/R barrier, we expect a breakout and watch the behavior of price post-breakout for clues as to future direction:
  • Weakness following the breakout – the expectation is for a breakout failure and reversal back through the area of S/R.
  • Weakness on the pullback – the expectation is for a breakout pullback and continuation.

• 5. Visualize Future Price Action
  • a) How do you expect price to behave? Visualize the future price action, based upon your expectations for future trend direction and its interaction with the market structure S/R levels.
    • i) What price action would validate your assessment of future trend direction?
    • ii) What price action would invalidate your assessment of future trend direction?
• 6. Identify Areas of Trade Opportunity
  • a) Based upon your expectations for future trend direction and how it should interact with areas of S/R and swing highs / lows, identify the next potential setup areas.
  • b) Areas of trade opportunity are found where weakness plays out against S/R and swing highs / lows (TST, BOF, BPB), or within a trend (PB, CPB).
• Steady trend environment:
  • Higher Probability
  • PB and CPB
• Weakening trend environment
  • Higher Probability
    • CPB
    • PB if they break a previous swing low (uptrend) or swing high (downtrend)
  • Lower Probability
    • Any other PB
    • Counter-trend TST or BOF of swing high (uptrend) or swing low (downtrend)
• Within a Sideways Trading Range with a clear intra-range trend
  • Lower Probability
    • PB and CPB
• Approaching higher timeframe S/R or range S/R, with no sign of potential breakout
  • Higher Probability
    • TST
• Approaching higher timeframe S/R or range S/R, with strength showing signs of potential breakout
  • Higher Probability
    • BOF or BPB

Final Preparation

• 1. Final Confirmation Check
  • a) Again confirm my physical and mental health.
  • b) If suffering from any ill health or stress, consider the need for cancelling the session, reducing the session, reducing position sizes, or implementing periodic checks of myself and my performance.
  • c) Confirm again that my fatigue levels are within the limits as defined by the 5/12 fatigue management plan. No trading is to occur if I am classified as suffering from fatigue.
• 2. Final relaxation and breathing session