Routine is very important if you want a consistent result whether you are trading, or learning to play a bass guitar. In fact, I believe routine is important enough to be defined within your trading plan. Traders who fail to maintain a routine are at risk of taking trades against their trading plan, or simply failing to consider all the variables when they plan a trade. Either way, maintain a routine will help you reduce overall risk. This week I failed to maintain my routine, and it almost cost me some pips.

When I trade my Remora Methodology using daily charts my routine goes like this:

1. Sunday: Identify fundamentals for the week
2. Identify a “bargain day” signal
3. Identify a potential entry using support and resistance
4. Identify a profit target
5. Calculate risk
6. Pull the trigger, place the orders or skip it
7. Let the trade run

Last week I had a lot on my schedule, and I forgot to review the fundamental calendar on Sunday. Later in the week, I was trading USD/CAD based solely on a technical setup which put me long near the $1.04 demand level. Unfortunately, I pulled the trigger hours before the FOMC rate statement was scheduled to be released. I was nearly stopped out when the U.S. dollar rallied smartly following the rate statement. Since I had failed to follow my routine, I found the strenght of USD/CAD’s rally totally confusing. I even sent a Tweet during the rally saying:

“What in the world is driving this USD/CAD spike from $1.04?”

Clearly I was confused as a result of not following my routine and lost situational awareness. The bottom line is, I was lucky this trade wasn’t stopped out. Had I followed my routine, I would have known the FOMC was scheduled to release a rate statement on Thursday afternoon. I don’t mind managing trades already in the money during a big news statement, but I avoid entering new ones immediately prior to major news. Let this be a reminder to you on the importance of keeping a routine.

Best of luck this week!

Ryan