By Ken Long

Lessons Learned 

0. Forgiveness for the trading I am about to do, gratitude for the trading I have done.

1. Know the market condition. Have a market condition framework that is useful in your time frame for typical holding periods: stable enough, but sensitive enough

2. Have a stable herd of standard targets that have behavioral characteristics that are linked to your typical holding periods

3. Use performance stats as a market condition

4. Have 3-10 patterns/systems that align with your beliefs and emotions, to give systemic diversity and cognitive efficiency, and anxiety management (TRUST)

5. Know your histogram; know the shape, avg, stdev, time series trends, the avg win and avg loss and their trends.

6. Enter based on longer term probabilities, exit based on tactical timing and market conditions (know your trade frame template)

7. Apply ruthless risk management; every trade is wrong, until proven otherwise. Once proven, it's exactly too late to do anything.

8. Map systems performance to market conditions. Respect the climate, and the seasons, and prepare for the weather

9. Import and prioritize longer term RS winners into your target list

10. Apply intraday techniques on days of entry and exit. Standardize intraday/swing position sizes (minimum 5:1, to account for gap volatility)

11. Know the stats for "x" day holding performance for your targets, and know where you are in the flow.

12. Be innovative in entry frameworks, converging in trade and exit management. (You buy lineage & references, but manage individuals)

13. Each trade starts off with you buying a histogram of possibilities and historical probabilities. The trade becomes what it is, replacing potential with actual.

14. The market doesn't have the time for patience to respect your reasoning

15. Bad news travels faster than the speed of light, especially when it is false.

16. You can try to understand what's going on or you can trade what you see, not both

17. Swing trades have life cycles, shelf life, and the momentum of storytelling. Everyone loves a new story, no one wants to be last.

18. The first and last person into the trade believe the hype. Don't be first or last and believe your eyes, not the hype.

19. Trust math. Master correlations and variations.

20. I would rather be outside wishing I was in, than inside wishing I was out (hat tip: Bob Gardner)

21. You're either a hunter or a farmer, or a team.

22. Trader's koan: Define your system so that others can trade it perfectly according to your intent; but remember your systems is what you DO, not what you SAY.

23. Read everything, believe nothing, trust yourself, act according to something, keep going.

Keep your risk measured and your powder dry so that you’re ready when opportunity knocks. Good trading!