Organise for Peak trading performance | stockbee

1/14/2015

Organise for Peak trading performance


If you want to make money trading organize yourself for trading everyday. The more organised your trading effort is less psychological issues you will face.

Everyday do the same thing over and over in a systematic manner. Everyday streamline your process so that it takes less time and does what it is designed to do. Everyday avoid unnecessary distractions and things that frustrate you

Once you have a well thought out method the day to day challenge is largely about implementing your plan. As a beginner trader several years ago I used to be not fully organised for trading as I was not clear about my methods , setups, risk and lot of things. Now it is a different story. It is a well organised machine and it takes 1/20th the time it used to take me to find and trade ideas.

Your effort should be organised around your trading time frame and setup. 

For me swing and position trading are my primary focus.

 I look for swing trades of 3 to 5 days and 8 to 40% magnitude Stockbee Momentum bursts, Stockbee Dollar breakouts and Stockbee Range expansion are my day to day swing trade setups. 


In a year I do hundreds of such trades. Being well organised is key to profitably do this and to keep drawdowns miniscule. 


I also look for trades with higher magnitude profit potential of 100% plus which can be position trades and where I can risk larger amounts. 


Episodic Pivots method looks for such trades. Again the key is to be well organised to find such opportunities. If you are not well organised and have right tools you can not find such big opportunities. They are rare opportunities and unless you organise well to find them , you can miss them. 

Creating a daily routine can have many components. Part of my daily process involves:

Situational Awareness (SA)
Everyday I spend few minutes assessing the situation . When trading breakouts on either side you need to  be aware of overall market situation. 

We know swing setups work, but overall market conditions can have impact on the % of trades likely to work. So SA helps you in controlling your trade pace. In good environment you want to be more aggressive. In bad conditions you want to focus on risk management.

Currently my focus is on risk management and avoiding whipsaw. The current market conditions are not ideal for kind of swing I trade. As a result I take fewer trade , use tighter stops, take profit much quickly and manage market exposure to ensure no big drawdown.

Developing SA skill has helped me avoid unfavorable market conditions proactively and reduce drawdowns significantly. 

Question I  ask daily for SA:

What is my  market bias today and for next few days

If bullish or bearish iIs there a plan to exploit it

Is there an alternative plan in case things change quickly.
Anticipation

Anticipation allows you to control risk and get in to setups early or as they are breaking out. As my trading capital has increased substantially in recent years , I am spending more and more time on anticipation setups and trying to get in quickly in to breakout before they become difficult to buy. 

Anticipation is also useful on current open positions. If you have thought through what you will do under different circumstances on your open positions you are in better position.

Anticipation requires more effort than trading breakouts . You have to go though a larger universe of stocks with momentum to find candidates.  Everyday I narrow down my anticipation list to  the 3 to 5 very high probability opportunities I must focus on today. Haing 20 stocks in anticipation list does not help much as you can not or at least I can not focus on so many stocks. 


This is a anticipation setup I am watching for possible breakout. For these kind of setups I prepare orders ready to execute before market open. That way as it starts to breakout I am in.  


Managing  existing open positions

Open positions need management if market conditions change post entry or some news hits the market. They also need management in terms of moving stops or taking profit proactively. 
This is a only open position I have currently and I am watching it like a hawk because of market risk. So I have worked out my scenarios to try and ensure that I do not lose much on the position in case market turns south and it starts hitting all stocks. 

Sometime managing open positions involves exit in to pre market gaps or in above average moves. If a stock after entry makes a big one day move then I book in some profit as on swing trades many such big moves fade quickly. 

What is working currently


Different phases of market favor different kind of stocks or setups. Some time beaten down stocks do well. Sometime stocks with momentum do well. Some time value or growth is in favor. Knowing what is working helps you focus on hot opportunities.

Question I ask daily for What is working:

What is working in the market currently

What stocks and sectors are leading the market currently

What style and setups are working currently

What kind of follow through is happening
The hardware and software

All our good plans or intentions or setups are of no use if our hardware or software fails or is not optimum for trading.

Are you setup for today

Is the  hardware in proper condition

Is the software working without glitch

Updated backup plan in case of failure.

I have built in redundancies in case of equipment failure. 

Right mental state

Ou mental state affects our trading. 

If your are well organised and in proper frame of mind for trading you will be successful. If you are excited, harried, angry, disorganized you will find same thing in your trading.

Are you calm, excited, harried , or confused today?

Are there distractions likely to affect your trading today?

In order to get in to right mental frame I do lot of visualisation. I always everyday look at my list of ideal setup and other ideal setup conditions and look at alternative scenarios. Embedding a ideal setup helps you quickly identify it. visualising your trades helps improve your procedural memory. 

Continuous improvement
As a trader I  focus at least 25% of your daily efforts on developing new trading setups and ideas and on enhancing my  trading skill and knowledge of market. 

In a year I read most books published on trading . Lot of time you find just one small idea or tactic and it is worth it. For example I was reading a book which just got published last week, In that 250 pages book I found one good short setup idea. Now that is something i will research more as it is a good and powerful idea. rest of the book was not much of use. 

I actively hunt for new setup ideas in trading blogosphere and add to my setup banks. I do not actively trade all those ideas but understanding them can help you add some tactical nuances. It gives you confidence in your own setup. 

A purposeful plan to do this will cumulatively help you transitions in to new setups and ideas as market changes.

What is your plan for enhancing your market knowledge today

What is your plan for enhancing your trading skills

What is your plan for enhancing your trading mindset

What needs to happen for me to be a confident and in control trader

Do I have resources to get there?

Do I have the burning drive to get there?

Everyday using this kind of framework will make you a better trader . If you rigorously follow these kind of checklist you will see improvements in your trading in few months. 

If you are constantly frustrated and not in right mood your trading will reflect that. If you want to improve your trading organise for peak trading performance. The rewards can be great if you do that. 

No comments: