My Daily Routine

When running the trading trail portfolio according to my preferred position trading approach, I have a routine that I run through at least once per day… sometimes more.

My daily routine consists of the following:

1. Check and Adjust Stop Orders

I prefer to trail my stop orders manually, so at least once per day I look through my current positions to see if any are ripe to have their protective stop orders notched up (for a long position) or down (for a short position). Ideally I would let each position rise 15%-20% above my initial tight stop order before trailing it, and when trailing I would be mindful of any support and resistance levels.

2. Look for Pyramiding Opportunities

I look through my existing positions to see whether any have sufficient profit locked-in by my stop order to warrant pyramiding of additional funds into the position. The locked-in profit must be greater than my new risk, the existing position should ideally be close to stopping out (so that my new risk is small), and ideally there should be some other reason for pyramiding.

I also look for opportunities to ‘average down’, providing that I can do so relatively safely by taking less risk on my second position than I took on my first position in the same stock (or other instrument).

3. Check Fallers (for candidate new positions)

I consult the Yahoo! Finance Price % Fallers list to see if any stocks are much cheaper today than they were yesterday, because they may be potential purchases: oversold stocks that might bounce back in the short term and which might have good upside potential in the long term.

A variation on Check Fallers is, of course, to Check Risers for potential shorting opportunities… but it’s not always as reliable because stocks tend to rise steadily and fall quickly.

4. Check the Stop-Out List (for potential re-entries)

My Stop-Out List tells me the price at which I last stopped-out of a position. If I can buy again cheaper (or sell again more expensively) I might just do so; but usually only if there is some other reason to do so, and if I can determine an acceptable new stop level that limits my risk.

For those with not much time to trade

I tend to run through this routine a few times per day, because my other business interests usually allow me the time to do so. Unlike day trading, my longer-term position trading approach may be attractive to those would-be spread bettors who are trying at the same time to hold down a regular job and who could run through the routine once per day either before or after work.

Those with an even longer time horizon could theoretically run through the same routine weekly, but you would need to have a higher risk tolerance due to applying necessarily-wider initial stops so as not to get stopped-out too frequently mid-week when you aren’t looking.

Tony Loton is a private trader, and author of the book “Stop Orders” published by Harriman House.

Tags: trading routine