One of the speakers at this year’s PennyStocking conference (see all the conference details) is Tim Bohen who I think offers some of the best information out there for wannabe traders and who can be described as:
-Timothy Bohen is a five-figure-profits trader who owns a multi-million dollar company, but manages to trade part-time too…you can see all his 2010 trades so far and check out his nasty winning percentage. Yes, he does swear far too often, but if I ran a multi-million dollar business, I’d swear that much too or I’d resort to being like Pierce Brosnan in The Thomas Crown Affair.
Yes as last year’s conference attendees and students of the sharing all his trades openly and proving that yes you can trade successfully part-time.DVD know, this part-time trader does swear a lot, but I LOVE that he is
So when I read his weekend post about scheduling and workflow, I knew I had to share it with everyone.
Download a PDF version of this post.
Before I do, check out this great video of him at last year’s conference:
In this post I would like to cover what I think to be one of the most important methods to follow to be a successful trader. While in my mind it is important to every trader, but particularly if you are a part timer there is immense value in getting up early on a consistent basis.
I have found that most traders particularly part timers prefer to stay up late and research then drag themselves out of bed 10 minutes before the market open and expect to be prepared and ready to trade. I’m sure I will get countless counter arguments but I think that it is truly idiotic and naive to expect to be able to trade successfully in the morning and even throughout the day without some sort of consistency and routine based on a consistent rise time.
One of the biggest reasons I think getting up early consistently is important to a trader is due to the fact that trading successfully demands intense discipline. If you can’t drag your lazy ass out of bed early and consistently how do you expect to apply any sort of consistent discipline to your trading? Gamblers sleep in and refuse to put in the work away from the table, traders get up and prepare and approach the market with a plan.
By getting up early and implementing a consistent workflow you can approach the market confident and with your thoughts and mindset locked in. I’ve found days that I do not get up on time and rush through my research, or worse yet complete no research and expect to trade only on the information available at that instant, I will consistently enter “random” bad trades. To truly be prepared I believe a routine needs to be created, and by refining and following this routine, you will become more consistent, more confident and more importantly more patient. I have NEVER entered a “random” trade on days I rose at 5AM and completed my entire workflow routine. At times it’s amazing the heightened level of patience on fully prepared days. Of course that increased level of patience will invariably create days of extremely low trade volume. And on some days no trades whatsoever. I will cover “not trading” extensively in another chapter, but at this point just know that “not trading” is the most powerful tool of all to the part timer!
Considering the lack of interruptions the early morning hours are also greatly valuable to research and prepare. Since I’m assuming you have a day job and family and friends, you are subject to 100’s of distractions in the evening. One thing I can count on is barring total emergency the hours of 5AM to 7AM are mine and mine alone. No phone calls, no emails, no interruptions. Not only does this allow you to focus, it allows you to truly learn and get your thoughts in order. It also allows you to work through your preparation process in a much quicker and more efficient fashion. What could have been 2 hours of research in the evening could be potentially reduced to one hour or less in the morning. Not only are you free from interruptions, you are hopefully free from scheduling conflicts as well. The part time trader will have numerous evening commitments that could potentially sidetrack research time. Family, friends, work, and hobbies should be utilizing your evening hours NOT the fucking market.
Another chapter will cover the addictiveness of the market. But at this point I will press the point that by disconnecting from the market in the evening you will be far less crackheaded about your desire to follow the market. Spend the time where it really counts, with your family, friends or learning and hobbies. Don’t waste 1/3 of your day looking at flashing green and red numbers.
The last and in my mind most important aspect of rising early and sticking to a routine is the confidence and cockiness felt by knowing you got up early and prepared while 99% of your competition in the land of penny stocks, slept in, is hungover, and probably ate fifteen donuts for breakfast. This could be simply my personality, but I have to believe in the world of trading it is valuable to know subconsciously that you are prepared and better then the other guy. On days I follow my routine to a “T” I am ready to kick the asses of every lazy penny stocker out there, and over and over those days are by far my most profitable. The only days they are not profitable is when I don’t trade. The likelehood of taking a loss can only be reduced by preparing not eliminated, but again in my years of experience the potential for making a bad trade is extremely reduced by preparation.
Tomorrow I will detail my actual workflow routine after rising and preparing.
To the reader, please keep in mind this is in essence a rough draft for my trading book. Please critique and comment, while the writing is a little out of sorts and more or less stream of consciousness I have decided to post the rough drafts here and use this blog as a workspace for editing. I certainly hope the final product will be much better structured and more clean.