Happy Monday, traders…

Jeff here.

In my early days as a floor trader on Wall Street, I learned something that completely changed how I prepare for my trades.

A senior trader gave me a checklist to go over every Monday morning — one that would set me up for success throughout the rest of the week.

Since then, I’ve used this 6-step framework every single Monday of my life and it’s helped me consistently beat the market for over 20 years.*

Trust me: If you follow these steps, you’ll be more prepared than the 90% of traders who fail. 

The great Roman philosopher Seneca famously said “Luck is what happens when preparation meets opportunity.”

Make no mistake — this is especially true in the options market. 

How you set yourself up on Monday has a huge effect on the rest of your trading week.

With that in mind, let’s break down my 6-step framework for Monday morning success…

Step #1: Build Your Weekly Watchlist

You’re in a unique position in the options market. Your opportunities to profit can shift rapidly, ranging from week to week and even minute to minute…

Having a clear list of potentially tradable stocks at the beginning of the week sets the foundation for your trading decisions.

The stock market is dynamic, with share prices shifting constantly. This means you should be updating your watchlist throughout the week, adding any names that present actionable trading opportunities.

Regularly updating your watchlist ensures that you’re not caught off guard. You never know … A previously unnoticed stock can quickly become the highlight of your week.

While focusing on potential top picks, also ensure you have a diversified list that can hedge against unforeseen market shifts.

Step #2: Review Global News and Macroeconomic Events

Major macro events can lead to some unbelievable, five-star trading opportunities…

This is why you should be scanning major international news outlets on Mondays for significant events from the weekend that may influence the markets.

Pay close attention to geopolitical events, such as elections, peace talks, or conflicts that could have economic repercussions.

Investigate any major economic data releases from the past few days that might sway investor sentiment.

Delve into recent corporate announcements, especially from blue-chip companies or market leaders.

Familiarize yourself with the calendar of events for the coming week, noting any scheduled central bank meetings or policy decisions.

Highlight any anticipated earnings reports from major companies, as these could drive sector-specific movements.

Keep an eye out for scheduled economic data releases, such as employment figures or inflation reports, which can influence broader market trends.

WARNING: The Federal Open Market Committee (FOMC) meeting begins tomorrow. This is the kind of major macro event you must be paying attention to.

Step #3: Analyze Your Charts

As a short-term options trader, starting your week with technical analysis is crucial…

Start by reviewing the previous closing data and performance of major global indices and key sectors.

In the early trading hours, monitor for significant gaps, surges, or downturns in pre-market trading that can set the tone for the day.

Look into the implied volatility levels across various assets, using indices like the volatility index (VIX) to get a sense of market sentiment.

Compare current market levels to moving averages or other technical indicators you find valuable.

Keep a close eye on the performance of major commodities (like oil or gold) as they can have a huge effect on stocks and indexes.

Consider the bond market and yield curves, as they can be indicators of broader market sentiments.

Step #4: Go Through Your Open Positions

If you’re holding positions open from Friday, consider the following…

• Look at each of your open positions, noting their current performance. Take note of which are profitable, and which are running at a loss. (You should probably cut your losses.)
• Identify any positions that are nearing expiration this week, as these trades require your utmost attention.
• Examine the movement of the underlying assets of your positions. Are they trending as you anticipated, or are there any surprises?
• Review any options strategies you’ve used and determine if adjustments are necessary due to shifts in the underlying stock. 
• Understand the impact of time decay (theta) on your options positions. This is particularly crucial for positions that are close to expiration.

Step #5: Lay Out Your Game Plan

Think about great sports teams … they don’t go into the championship game without a plan. 

And you shouldn’t start trading without a game plan either. 

Avoiding hasty decisions. You shouldn’t decide what names to trade at the last minute on Monday morning.

Every great trader I know plans their strategy before the week starts. Furthermore, most wake up hours before the market open to prepare.

Set clear, measurable goals and objectives for the week ahead — both in terms of desired profit and acceptable risk.

Decide proactively if you aim to open new positions during the week, or if you’re more focused on managing or closing your existing ones.

Set aside time blocks for daily market analysis, trade execution, and portfolio review. Create regular intervals for mental breaks and reflection, ensuring you stay sharp and avoid burnout.

Step #6: Forget About Last Week

Forget about your recent successes or failures … it’s a new week.

Ensure that emotions from the previous week’s losses or wins don’t influence this week’s decisions.

CAUTION: This doesn’t mean you should forget the valuable lessons learned from past trades, it means you shouldn’t look at this week through last week’s lens.

You want to start each week with a fresh perspective, free from the emotional burdens of previous trades.

Holding onto past emotions can be detrimental. A lack of confidence from past losses might deter you from nailing a promising setup, while overconfidence can lead to rash decisions or overtrading.

I’ve had a similar Monday morning routine for years now and it’s helped me thrive over nearly three decades as a professional trader.

You’ll have to try different things to figure out what works for you. But I think the steps I outlined above are great starting points for starting the week the right way…

Get up early, get your mindset right, and get your game plan ready.

Happy trading,

Jeff Zananiri

P.S. Every week, I share the trades I find inside my flagship research trading service — the Burn Notice Alliance…

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• 🔔 4 new trade alerts every week (over 200 opportunities per year)
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*Past performance does not indicate future results