Market Watch

How to be effective at time management while trading

Have you ever found yourself wondering “There just aren’t enough hours in the day”. Especially after a long securities research and strategy preparation for your next trading day. While every trader can quantify returns from his trades, most of them forget how to quantify their time spend doing research, analyzing, preparing strategies, and executing trading. If the time component would be included in the calculation of the return, many traders would be less profitable. 

Track your time

The starting point for time quantification is to begin tracking time for each set of activities. You could track your time manually (for example with the usage of free Excel timesheet template) or use a software time tracking solution. Both options depend on personal preferences but if you are executing a higher number of trades, the software solution could be more effective since can help you with automating some calculations and costs. 

Organize your trading activities as projects and tasks

Project-oriented segmentation of trading activities is important from 2 standpoints. It brings clearance of your work and time spent on each activity. It also enables you to prepare better reports and analyze the time spent per each trade.  The following is a practical segmentation 

Project: Growth Stocks Screening – June-21

Subproject1: China: Growth Stocks Screening – June-21

Subproject2: Germany: Growth Stocks Screening – June-21

Subproject3: USA: Growth Stocks Screening – June-21

Task3.1: Market Analysis

Task3.2: Stockpicking

Task3.3: Individual stock fundamental analysis (at this point we start using tags)

Task3.3: Individual stock technical analysis (we use tags for individual stocks)

Task 3.4: Preparation of trading plan

Task 3.5: Execution of the trading plan

It’s recommended for traders to introduce the usage of tags with the first task that deals with individual stocks (for example – fundamental analysis – task 3.3). Tags (#GOOGL) helps traders to track time spent on individual securities, stocks etc. This way, when a trader completes with individual trade (for example #GOOGL) it can simply pull out all the time spent on this individual security and include the time component in the final profit calculation.

Measure and optimize

Measuring your activities is the first step towards better transparency. But at the very end, we all strive to be more effective and consequentially more profitable. That’s when time management skills come into play. In the beginning, we need to identify our trading activities that are the most time-consuming and have the highest potential for time-optimization. After a month of usage of time tracking tools, traders should have a more clear picture of their most time-consuming activities.

Apply core time management skills 

Traders will achieve the highest impact on their work if they apply some of the core time management skills during their most time-consuming activities such as: 

  • Planning, 
  • Decision making and prioritization, 
  • Setting boundaries and saying no, 
  • Delegating and outsourcing tasks, 
  • Building a system and diligently following it.

Traders should test various methods and techniques and stick with those that make them the most effective in the long run. If you have started time tracking then it will be noticeable after few months what works for you personally and what not. And the most important – it will come naturally to most of the traders to focus only on activities that are the most profitable for them since their time spend will be shown as dollars lost at the end of each trading day.