Proper Preperation By Oscar Rodriguez

As traders it is important to realize that this job can be very rewarding every day. But reaping the rewards does not come by just doing minimum preparation. One must fully prepare for different scenarios that could unroll the next trading day.


If one already has a set of rules for a specific trade set up that they like, for instance the Slingshot trade, it does not indicate that he’s got the tools and is fully prepared to go into the markets and trade the next day. Having the tools and knowledge to navigate the markets is a step towards success but it requires more to get rewarded. It requires that the tools and knowledge be used to fully prepare for the next trading day by creating specific if/then scenarios for each anticipated trade. The scenarios can be rehearsed and memorized or jotted down on a note pad. The more detailed these if/then statements are the better. And the more of these if/then statements one can come up with the more opportunities he can expect going into the next trading day.


I routinely flip through many charts every evening looking for quality setups from the universe of stocks that I watch. So every day before sitting at the trading desk I know the stocks I am going to trade and which trade set ups will be used to trade them. I create multiple if/then statements in my head so that when a stock reaches the anticipated price zone where I want to get involved there is no second guessing and the trade is properly executed based on my if/then statement. The more details a statement carries the likelier it will be that the trade is successfully executed. I like to include subsets to my if/then statements that tell me what the stock would need to do in order to get me back in to the trade if I’m stopped out, or once in, how the stock would need to trade for me to add some size to the position. Again, the more detailed, the better prepared one will be to reap the rewards.


In reality successful traders spend more time preparing than they actually do trading. They know that setting up plays on a whim is foolish trading. I know of not one successful trader who trades this way. One needs to be able to anticipate price behavior, not watch it come then act on it as it’s happening. As always, the more preparation one does the more opportunistic trading he’ll encounter going into the trading day.