Do this if you want to be successful trader | stockbee

9/24/2013

Do this if you want to be successful trader

One of the often asked question on email by readers of this blog is how can I succeed in trading  or improve my performance. The answer is simple, develop a process loop around a simple setup idea. Doing that allows you to develop procedural memory.

The day you realize trading success is about developing procedural memory, you will be on path to success. Trading success is about developing expertise. When you try and develop expertise you train your procedural memory. If your efforts at training procedural memory are successful then you will become efficient in trading.

To do that you need to have a setup and process flow.  Once you do that the task is simple.

Run your process loop...

If you want to trade earnings breakout as a setup , run earnings process loop.

If you want to buy pullback run pullback process loop...

If you want to trade options , run options process loop..

If you want to trade ETF run etf process loop...

If you want to day trade , run day trading process loop...

Unless you have set process loop you will flirt from method to method.

Process loops develop procedural memory...

The benefit of running process loop will be apparent after 4 to six months...Which most people don't want to hear. They want stock picks. They don't want to learn process loops to pick their own stocks. 

If you have a setup and  a well thought out and efficient process loop all you need to do is to run the loop over and over again.

Doing same thing again and again and again develops expertise...

Throughout the day or after close run your process loop.

Depending on your setup idea and time frame of trading process loop will vary...

Running same process loop for extended period of time will make you an expert on a setup...

Stick to few setup and do the same shit everyday till you become expert on that setup...

If the underlying setup idea is thought through and well designed , during the day the task is to run process loop. Thinking through a setup idea is one time effort. This is where you need to focus your one time effort. If you can design good process flow that involves very few steps and very few tools you will succeed in trading. If your process flow involves several hours and  involves very complicated steps then you are unlikely to find much success.

Process loop allows you to build procedural memory. When you do same thing again and again, day in and day out, at some stage it becomes a automated task and the brain spends very small amount of energy to do it. It becomes part of you and instinctively you can figure out , whether this is good setup or not, where to enter and exit and how much to risk.

Each of the method I trade like momentum bursts,  Trend Intensity  Breakout , Working People Portfolio , Lemonade Strategy for 401k  has process loop. All that one does is run the loop during the day, find trade candidates and enter and exit.

The day you realize trading success is about developing procedural memory, you will be on path to success. 

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