Day Trading

Every Investor Needs a Pre-Checklist

One of the first things every trader does before the market opens is spend time completing a pre-checklist.

This is important because anything can impact the market. After all it is a global market.

So, I have compiled a list of the most common items I’ve seen:

Check The Volume

  • Volume tells you a lot about the current state of the market.
  • You don’t have to base your decision completely on your volume analysis, but understand if it providing support or going against the current market direction.
  • Apply a moving average on your volume to help you identify high and low volume market sectors.

Check Index Futures

  • Look at all the markets and check the highs and lows for NASDAQ 100, S&P 500, and Russell 2000 Index Futures, early because these create your support and resistance for your day.

Read News Articles

  • Read stories from networks such as Bloomberg or Forbes that impacted global markets while you were asleep and how that will impact the US.
  • There are several more specific things to do based on the market you’re trying to trade in.
  • The key here is to stay current with what is happening in the world.

See What Other Traders Are Up To

  • You’re able to search pre-market securities since they are public. Go look at the volume and see where your friends are putting their money
  • Look for open positions, and look for easy money like seeing stock’s reporting earnings. If you see one that looks good buy it early and ride the wave for a bit.
  • Look at the support and resistance levels. You don’t have to use them, but it can help predict where your competition will become interested.

Take Note of Key Levels

  • Make sure you have the right instruments to record key numbers and open positions.
  • Seeing the numbers is important so you don’t lose focus during market hours and put yourself in a bad position.

Find Safe Exits

  • Lets say you’ve done you’re pre-market research and see that your holding Delta and they just kicked another person off a plane. Don’t be afraid to exit your position at the opening bell just because you’re already at a loss.
  • Remember you don’t have to be right all the time to be successful, you just have to be right more than you’re wrong.

Think about the Seasons

  • Think about the day of the week, time of the month, month of the quarter and period of the year.
  • All of these can tell you what the price will do and how it will favor different markets.

Place Crazy High and Low Limit Orders

  • This is something you do while you watch the pre-market. Place these really high sells or really low buys on stocks or securities.
  • There could be some you want to own but are too expensive at the moment. Somethings quick dips can get your order filled.

Be the Bear or Bull

  • Choose who you want to be in the morning. Are you feeling aggressive or do you want to play defense? Make this choice based on your pre-market research.
  • You can always change after lunch.

Early Bird Gets The Worm

  • Go ahead and create a list of plays the will increase momentum, then just sit back and traders get confused and end up on the losing side.
  • Then look for low entries.

Just Being Honest

  • What you do in your pre-market routine determines how well the rest of your day goes. This list will help you get up to speed faster and ahead of the opening bell.

 

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