One of the most important intentions of serious trading is to be focused on consistent skill building. The equation for skill building can be described as P+R+F+H=SB (protocols + routines + feedback + habituation = skill building).   Protocols can be defined as a sequentially ordered series of steps toward an aim or a goal. Protocols dot the cultural, economic, political, legal, medical, athletic and diplomatic landscape. They involve strategies for research, treatments, due process, sports training, business planning, investing and of course trading. Successful traders identify strategies, procedures, set-ups and rules or (protocols) that they explicitly use to systematize the process of trading. They do this because the markets are inherently erratic and cannot be totally predicted to move in any particular direction at any particular time. If you are not basing your process on established strategies for entering and exiting in order to identify a high probability setup, then entering and exiting become arbitrary and at that point you are gambling. Routines are an important component to skill building because routines have the potential of “neutralizing” erratic behavior. Effective trading requires that you are consistent in “how” you execute your strategies. Doing the same “effective” behavior over and over in order to have a “how”(perhaps a checklist) that is matched to high probability strategies will create a positive pattern.   If you are inconsistent it will be very difficult if not impossible for you to track your progress, which brings us to the importance of Feedback. Feedback allows you to verify, measure and document whether or not the protocols are providing the expected hit rates. If not, protocol modification is in order as you uncover any negative/limiting patterns of thinking; feeling and doing that would compromise your analysis and/or your follow-through. Feedback, documenting or journaling is a very robust way of identifying faulty limiting beliefs that promote the fitful emotions that drive destructive behavior. If you failed to document and therefore don’t know what you did in a specific trade to gain that profit, you can’t duplicate the behavior. Remember, you can’t change those limiting beliefs and negative thoughts that you are not aware of. Lastly, you’ll want to “habituate” to this entire process. In other words, you must incorporate a repetition response and create a “habit.”

Another word for habit is “program.” As it happens we are prewired to be habit formers from our earliest moments of infancy by downloading the programs of our parents and later all authority figures in our sphere. We also develop a “pattern” of responses based upon those downloaded programs and these patterns are habits. So, as you look at your trading patterns and habits it is important to embrace the critical importance of them and why you’ll want to become aware and be deliberate about coming up with patterns/habits that will serve you. You got it, those “effective routines” mentioned in the above are new habits-in-the-making which you’ll want to install and it is also important to uncover the patterns/habits that are creating the results that you don’t want. One of the ways to initiate a new routine is to hold yourself accountable and take responsibility for how you are thinking and what you are doing; that is, you simply execute or follow-through with the new behavior for at least 30 to 60 days it will download into your unconscious.

Routines are powerful habit formers and if you identify a routine for the beginning of your trading session, you will create a support mechanism for optimal ability to perceive the reality of the market order flow. It is important to have an attitude that holds trading enjoyment as a reflection of trading mastery – skill building – and going as far as you can with all the tools and expertise that you’ve got. Here are some ideas that will support you in identifying and incorporating new habits. Habits are lodged in the subconscious mind. In other words, when you have repeated a behavior for 30 to 60 days it drops into unconscious control and becomes “automatic.” In this way a “good” habit becomes a “stored solution” which is why it’s so important to store the right information. Rewards increase habit strength, and stress drives behavior to default to old habits…whether favorable or unfavorable. This is why you must celebrate when you have followed through with that new routine. Do this: List one routine that is part of your day and identify one bad habit that, if altered and replaced by a more supportive habit will positively impact upon your results. Review your morning, noon and night rituals and select some supportive habits around each of them. List one reward you might use to motivate yourself if you could establish a new habit.

The following is a regimen that will benefit your entire system (mind, body and spirit) greatly. Anything that supports your entire system will support your capacity and ability to accurately read what the markets are saying.

• At the beginning of your day, drink a large glass (8 – 16 ounces) of water in order to hydrate your system.
• Start your day with exercise. Energize your system, oxygenate your bloodstream and get the cobwebs out of your brain and body
• Try a meditative session to ground you in a relaxed and aligned state in order to be available, patient and focused with intention.
• Eat a light nutritious breakfast, and drink juices and/or herbal tea to maintain focus and mental strength.
• Review your Plan and Trading Rules to keep them fresh in your mind.
• Do your homework, whatever supports your style and trading strategy. The point is to “do it.”
• Go through your daily trading strategy “out loud.” This has a way of flushing out distortions. Look at the charts you are planning to use.
• Then take a deep breath and enjoy becoming one with the price action and order flow.

As you install new programming or habits, it is critically important to address both your “mechanical data” and your “internal data”; if you want to have any chance of brining your “A” Game to your platform. Make sure that when you turn on your computer and pull up your trading screen, you are ready and prepared to access and activate all of your resources. So, trade by design not by default by establishing effective routines and habits that will support you in getting the results that you want.