Don’t trade in 2019 until you check this list

Trader's Mindset

Dec 31

Can you become more successful in 2019? If you can answer yes to all these questions then I think your odds will be better. If you have additional ideas then please share them in the comments section.

Plans & Preparation

  • [ ]Have you created a list of requirements that must be met for risking your money in markets?

Trading capital, Risk Management, Pessimism

  • [ ] Do you have least $25,000 risk capital and evidence based knowledge for what each of your strategies requires in terms of capital?
  • [ ] Have you determined the % of capital you can risk per day?
  • [ ] Do you have a broker or software enforced risk manager/control?
  • [ ] Are you accounting for trading costs and do you have the proper cost-structure for your style of trading?
  • [ ] Do you have a “healthy” pessimism or skepticism?
  • [ ] Do you have a plan for both growing and withdrawing profits?

Skill Acquisition, Training, Verification

  • [ ]Do you have a method for efficiently rehearsing and practicing your trading under extreme and different historical conditions? And, have you practiced under those conditions?
  • [ ]Have you verified your trading results conditions over a length of time, also, in a live walk-forward environment?
  • [ ]Does your confidence accurately reflect the quality of your trades? Do you have a method for ranking and quality scoring trades?
  • [ ]Have you at a minimum defined some invariant properties a.k.a. setups for your trades? Have you sought to identify the factors that affect your trades?
  • [ ]Do you have processes in place to gauge both your internal state and external market state?
  • [ ]Do you identify the causes of your losses to the extent possible and also have you taken all possible actions to correct the mistakes?
  • [ ] Do you have process to take advantage of new and emerging technologies such as machine learning?

Market Orientation & Development

  • [ ] Do you have defined processes for cultivating your market cognition?
  • [ ] Are you tracking relevant factors that may be influencing and changing your markets today?
  • [ ] Are you journaling each day in such a way that you gain quantitative insight into your trades?
  • [ ] Are you developing your best market insights?
  • [ ] Do you have a plan for how to take advantage of emerging market themes and insights? Do you have a plan for how you will trade opportunistic events?
  • [ ] Does your trading integrate or take into account multiple factors beyond price or if not was that the result of a conscious decision?
  • [ ] Are you prepared to trade a higher or lower volatility environment?
  • [ ] Do you have a market orientation to alert, develop, and trade other markets as opportunity presents?

Health, Wellness, Managing Stress

  • [ ] Are you exercising, eating healthy, and doing what is required to be in your peak state?
  • [ ] Are you actively using time management such as time blocking to maximize your productivity and make best use of your time?
  • [ ] Are you cultivating, at least, some other skills and income outside of trading?
  • [ ] Are you energizing your trading by taking advantage of your strongest insights and skills?

 

About the Author

Curtis is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact him at curtis@beyondbacktesting.com.

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