SPY was weak today and captured the move of these three stocks to the short side

To become a consistently profitable trader, one must develop a flight plan.

Daily fight plan that includes:

1. Studying what the Spy is doing – looking at the big picture, are there any stocks trying to mirror the SPY
2. Gap up/gap down stocks in the scanners and sift through them identifying the one that has the best setup, risk reward ratio and catalyst.
3. Setup levels on the pre-market. Any indicators forming a biased?
4. Create an “if-then” scenario. Any patterns developing? Are we entering a trend or a range setup? Going to a breakout or consolidation?
5. Identify the entry, exits, partial, profit target, number of shares, bid-ask spread
6. Check level 2 and tape if there are any biases are forming.
7. Going through all this thought process every single day can eventually lead to building a trader’s reliable trading intuition. This will help a trader to have the confidence to pull the trigger and fortitude to stick to the plan.

It is very important to develop this thought process even before entering the trade since traders think most clearly before a trade is place. Through this process a trader can develop confidence in analysis and act quickly once a setup is forming.

Develop a thesis prior to entering a trade and apply the three pillars of trading at all cost: psychology, strategy and risk management to become consistently profitable in day trading.