I’ll let you in on a secret I wish I could teach my younger self…
If you wanna have a long and consistent trading career, you’ve gotta dedicate 100% of yourself to the market.
The market’s only open for six and a half hours each day. Aside from sleeping, what are you doing with the other 17.5 hours?
I think this goes without saying, but I’ll stress it again … when you’re not trading, you should be studying.
After all, if it wasn’t for my diligent study habits, I never would’ve made $3.7 million+ trading stocks and options. Or discovered my brand new strategy that works in any market conditions — shadow trades.
Now, you might be wondering — how and what should you study? What are the best ways to prepare away from your battle station, outside of active trading hours?
There’s no single list of ultimate study habits. Like anything else in trading, you have to find what works for you.
But in the meantime, I’ll tell you what works for me…
Mark Up Your Charts
I view myself as a technical trader. In other words, technical analysis of chart patterns gives me the conviction to execute my trades.
Sure, there are other factors (like social media sentiment and fundamentals) that can influence my trading. But for the most part, I look at charts and trust the patterns.
During market hours, it’s difficult to find the time to accurately mark charts up. When I’m actively trading, I’m often zoomed in on the five- or one-minute chart.
I’m watching the moves as opposed to meticulously notating. There’s too much distraction when trading is live.
This is why I set time aside in the afternoons and evenings to mark up the daily and weekly charts on stocks I’m watching. I find that I often discover the best plays during these high-focus study sessions.
Note the Key Technical Indicators
So, once you have your study time set aside and your charts pulled up, what do you do?
Figuring out which technical indicators to focus on is one of the most difficult parts of technical analysis. In the beginning, charting can seem overwhelming…
Where do you draw your lines? How do you chart an uptrend (or downtrend)? What determines which price levels are critical?
There are a few standout things I always look at on every chart.
If I see them on the chart, I immediately mark them up.
I think getting a basic understanding of these indicators will help get you started.
- Draw horizontal lines at support and resistance levels for a visual placeholder of the stock’s current trading range.
- Draw vertical lines at key moments in the chart’s history to help you see the visual story of a stock’s past big moves.
- Draw trendlines under uptrends and downtrends to see the general direction of recent price action.
How to Apply Your Studying to Your Trading
Once I draw in these markups, it’s easier for me to have a clear perspective of what’s going on in the chart.
Then I use the indicators as goalposts for timing my trades. For example…
If a stock breaks a multi-day trendline, I’m on high alert. I’ve seen it so many times before. BIG moves often come shortly after a trendline breaks. (Think about the major index support levels we talked about yesterday.)
Similarly, if the price action in a chart breaks above key resistance — or below crucial support — I’m ready to pounce.
When the price level every trader’s been watching finally cracks, it can lead to some incredible setups.
Bottom line: Knowing your technical indicators is crucial. If you sleep on them, you risk missing those five-star setups.
If you aren’t studying hard, there’s another trader out there who is — and that trader’s ready to beat you.
So, once the market’s closed for the day, don’t just play video games or watch a streaming service.
Instead, pour yourself a cup of coffee, tea, or whatever you like and go over your charts. Even a few hours of focused study each week could make a massive difference in your trading.
Remember: Winners do the hard work that losers aren’t willing to do.
So don’t let yourself fall behind. Do the hard work. When you’re not trading … STUDY!