Strong Routines

I am making a new routine to assist me in trading. I catch myself having "themes" for the week. I'll work on a problem consistently for days or weeks, letting other things slide.

Big problems need to be worked on. But not at the expense of concentration on the rest of my trading. So, I'm dedicating each weekday to put emphasis on one area.

• Monday Mechanics - Has a nice ring to it, eh? That's the main reason I dedicated Monday to working on such tasks as order entry, trade management, position sizing, etc.
• Tuesday Research and Data - Paperwork is time consuming. Tuesdays are good days to catch up. Blogging, trading journal, researching my picks a little deeper, and look at my P&L reports to make sure I'm keeping tabs on what the market is doing, and how I am doing.
• Wednesday Setups - Look at existing setups, research new ones, dust off ones I haven't looked at in a while and see if the market fits.
• Thursday Psychology - Work on a psychology subject that has come up recently, or review a new subject that I may wish to apply to my trading.
• Friday Review and Moving Forward - Review the past week. Find and document areas needing improvement. Look at ways to accellerate learning and comprehension.

Such a schedule will keep me busy. If I don't get as far as I wish, there will be next week. I may run across a problem on the wrong day. Note it, and read the note on the right day.

These items should not be thought about during the day. Instead, work on them before and after. If I have time at lunch, I'll look at them then.

The weekends are a time for reflection and renewal. I will not dwell on trading those days. I will attempt to keep up with this schedule for a few weeks, and see how it goes.

Making small size a strength

What makes traders better than institutions? How can we compete? Our size is in many ways our weakness. But it also has advantages. We must exploit any advantage we can to be successful.

Our size gives us flexibility. Moving in and out of a market can take seconds. It takes bigger organizations much longer.

Time spent exposing ourselves to other markets early in our careers can be a big boost here. When we take the time to find our niche, we learn about bonds, futures, emerging markets, currency, equities, etc. The relationships between these markets are complex, and take time to learn.

Fast-forward a few years and we're in a dull market. Let us say we're trading index futures. But things are jumping over in metals. Can we participate? Sure, with small size. We may make only pocket change. We may lose a little. But the experience may pay big dividends down the road.

Make the jump with me a few years further. Indexes are doing okay, but metals are breaking out of a long consolidation. Are we afraid to take a look? Probably not. We've traded there before. We know the rules. Nothing prevents us from taking a few things off the plate of some institution.

We can do this because we're flexible. Our size is a benefit. Don't be afraid to use it.

Who is watching my money?

I am solely responsible for my money, my trading, and my investments. I can fall victim to fraudsters, but I do my research, and have avoided anything major happening to my money.



In the past year, there has been plenty of finger-pointing going on. Who caused the meltdown? Why did the stress test rules change at the request of the banks? Each day there seems to be more yelling and blaming. This will go on and on ad nauseum.



There was plenty of money sloshing around Wall Street. Some of it was yours and mine. Ask yourself who put it there. In my case, I put it there. I put some 401(k) money in the hands of mutual fund managers that may or may not have been paying attention to the systemic risks of the street. Can some of the blame be placed on their shoulders? Sure. Can all of it? No.



I spend a lot of time researching my financial options. But I realize that some may not have the time to research and learn what to look for. What then? I encourage you to look at your bigger picture. Look at your options at a high level. There is no one answer. But in my opinion, the person who has all the answers as to what is right for you is you. Be a smart consumer, and you'll be an excellent trader.

Wall Street without college

Q: How important is schooling if I'm interested in a career as a trader?

A: Doing good in school is an indication that you will do good in the markets. Even if you're trading only your own account, a solid education will give you an edge.

Attaining a job on Wall Street requires unusual skill, being adept at the interviewing process, and a proven record of doing well at an Ivy League University.

Attending a high end school is an advantage. A graduate has advantages that the rest do not. Internships, alumni, and the reputation of the school ride on the resume of the applicant.

Q: What if I don't have such? Is there any way to get around this limitation?

A: Yes. But do not think it will be easy. You will still pay for your education, and it will not be cheap. If you are dedicated and unwavering in attaining your goal, you do have a chance to succeed.

Payment for your education comes in the form of reduced salaries, taking personal time to study, and working low paying jobs simply to gain exposure to position you wish to pursue.

Q: What do I study?

A: That depends very much on what you wish to pursue.

Many positions require extremely strong mathematics skills. Some are former physics and engineering majors that do well in the markets.

Many positions are tuned to someone with a strong economics background. Economics also has strong ties to psychology.

Q: How do I get my resume looked at without an education?

A: Your work history is more important than your education. Work hard to attain work in banking or trading. Do your very best while there, and make progress within the organization. Document your achievements.

The eventuality of all this effort is the attainment of your goal. At the end of your journey, you may find yourself working for a big Wall Street name. Or perhaps you may be an entrepreneur. Regardless, well placed efforts lead to results.

Would you hire you?

Working Smarter

I am in the process of automating the usual tasks I do each day. I pull down end-of-day data, journal my trades and my thoughts, etc.

Some of these tasks can be automated. Some can not. While I can't expect automation to journal my thoughts on a trade, I can pull down the data on trades recorded by my broker.

Then there is the question of buy versus build. I can subscribe to or purchase software to do some of this automation for me. Will it do what I want? Is it better to have data stored in one place? Why is storing the data important? Which data should be stored in detail, and which should be summarized?

There is plenty to think about. It is a good thing I have a software development background. The goal is to free my mind to think about the aspects of my trading that need work. But I must also balance the fact that gathering numbers and processing my spreadsheets manually has some benefits that are difficult to quantify. Decisions... Decisions...

Sustaining Change

Dr. Brett's new book is awesome. The first chapter was very timely for me. It is on change. More importantly, it teaches ways to sustain change.

I constantly have goals. Often I achieve them. But this new level is short-lived. I soon revert back to the way I was.

One of the suggestions is add an "or else" to your goals to change. I will spend the weekend thinking of next week's change related goal. I will attach an "or else" to it. I'll see how it goes.

Revenge Trading

"I'm going to get my gun back."
         - Kay, Men In Black

Revenge trading is bad. Revenge can feel good, though. The best way to accomplish revenge is to plan carefully, and execute flawlessly.

A well thought out and tested plan is the best way to take revenge on the market. Sticking to the plan will make you more money than going off on your own. It has proven itself. The results are measurable. Execute it as if the loss you just took never happened. At the end of the day, week, month, or year, your statement will prove you got your revenge.

The two worst things you can do here are to trade with an unproven plan or quit altogether.

Trading with an unproven plan may work. But the chances are very, very small. Trading without a plan is worse. Even if trading without a plan works, how will you measure its effectiveness? It would be very difficult to measure "gut feel".

Quitting is an option, but guarantees your loss. You may have this as your only option. If that is true, chances are that money management is to blame. If you are dedicated to the game, paper trade, save your stake, and try again. Otherwise, you are a casualty of the Wall street system.

We all take our lumps. Some leave the ring and go to other things. Others leave the ring and come back with more experience. Still others stay in the ring and slug it out. Which one are you?

Revenge trading is a bad idea. Getting your revenge is a great idea. Do it with a plan. Use good money management to weather the lean times. Keep your mind focused on the future, not the past. Grind out great trades. Some trades will be winners, others will be losers. In the end, revenge is sweet.