Every pilot has a pre-flight checklist: a series of things to review before taking off to make sure that everything is flight-worthy. The reason for this is clear: the loss of a few minutes doing your checks is a small price to pay to avoid the calamity that could result from something going awry.

Trading is not so different. A few minutes performing checks before you start trading can make the difference between starting out the day in the hole or in the green.

There are many questions I ask myself at the start of a market day: Is today likely to be a trending day or a range bound day? Are we likely to see volatile price action or slow meandering? Are we likely to test recent highs or lows? All of these are important questions for short-term traders. Because most stocks show a significant, positive correlation with the movement of the stock indices, handicapping the odds of the index moving in a particular way can provide a useful edge.

Here are a few items that consistently form a part of my "pre-flight checklist" during the opening minutes of market trade in the equity indices:

1) Trading volume in the first few five-minute segments of the session - Volume correlates very highly with volatility, and volume tells us if large, institutional participants are in the market. Low volume compared with recent norms tells us that we have a market dominated primarily by locals and we can expect lower volatility and range bound trade. The volatile, trending moves tend to occur when we sustain above average volume. If I see volume increasing on directional moves, I am much more likely to go with strength or weakness. If volume tails off as moves progress, I'm more likely to fade the move.

2) The distribution of the NYSE TICK ($TICK) and the Dow TICK ($TIKI) - Recall that the TICK measures are constant updates on the number of stocks trading at their offer price minus those trading at their bids. These provide us with the shortest-term sentiment information possible. I think of the TICK as a moment-to-moment poll of sentiment among the traders who are active in the markets at that time. As with volume, I am looking at how the TICK measures are distributed relative to recent norms. If we see both TICK measures skewed in a positive direction relative to recent sessions, the odds of sustained upward movement are greatly increased. Similarly, a sustained negative skew to the TICK measures tends to occur during downward trending days. It's where we see little skew and/or a mixed skew between the two measures that we tend to get range bound action.

3) The behavior of global markets - I keep my eye not only on European stocks, but also on gold, oil, bonds, and the dollar. If these markets are moving significantly and breaking out to new levels, we're more likely to see a repricing of equities. Quiet global macro markets provide little incentive for large traders to reprice equities, and that's when we see range bound drifting markets. I especially keep in the back of my mind "themes" that have dominated the global markets, such as weak dollar/strong bonds (economic strength/weakness themes) and the relationships among gold, oil, and stocks (inflation themes). I generally want to trade in the direction of those themes.

4) Recent trading ranges and support/resistance - Think in Market Profile terms. We want to identify the market's value range, and we want to identify how the market trades as we test the upper and lower boundaries of that range. The first range that is important to me is the pre-opening Globex range. I also want to look at the range from 7:30 AM CT to the open if we've had an economic report prior to the open. Ditto the 7:30 AM - 9:00 AM CT range if we get numbers early in the trading session. We also want to be aware of the previous day's range and how the market trades as we test prior days' highs and lows. If we cannot generate increased volume and participation as the market tests range extremes, we're much more likely to fall back into that range. The good directional moves occur when we break out of those ranges on enhanced volume.

5) Distribution of volume, especially of trades by large traders - This is the data I gather from the Market Delta program. I'm looking at the proportion of volume in my instrument (usually the ES futures) that is occurring at the bid price vs. the offer. I also place volume filters on the data so that I only observe the distribution of large trades at the bid vs. offer. This tells me if large locals and large institutions are primarily buyers or sellers. I always want to be trading in the direction of the whales. Indeed, I generally will not place my first trade of the day until I have a good sense for how the large traders are participating in the market.

You may very well start your market day with a different pre-flight check list based on your time frame and market. That's fine. The important thing is to turn your list into a regular morning routine. The captains of sea crafts never leave port without their maps and weather gauges--and a plan for their voyages. Those make the difference between smooth sailing and a rough voyage.

Brett N. Steenbarger, Ph.D. is Associate Clinical Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY and author of The Psychology of Trading (Wiley, 2003). As Director of Trader Development for Kingstree Trading, LLC in Chicago, he has mentored numerous professional traders and coordinated a training program for traders. An active trader of the stock indexes, Brett utilizes statistically-based pattern recognition for intraday trading. Brett does not offer commercial services to traders, but maintains an archive of articles and a trading blog at www.brettsteenbarger.com and a blog of market analytics at www.traderfeed.blogspot.com. His book, Enhancing Trader Performance, was recently released for publication (Wiley).