by Ken Long

A friend of mine, frustrated at the pace of his progress, asked how he could gain and maintain momentum on his personal journey towards trading mastery.

Here are my thoughts:

I would start with the daily tasks of trading and get the procedural parts down.

At the same time, I would suggest weekly evaluations of trades and moving averages of SQN rather than streaks of daily profitability.  Based on the frequency of trading, there aren't enough trades in a day to be statistically significant in order to say that there was something wrong with the way you are trading.

Let's say you had 4 days in a row where the market had bounced off Williams%R oversold levels and was flowing upwards.

Suppose, then, on the 5th day, the set ups that were working well, now are marginal, and u finish the day down -.5R, with "R" defined as your unit of risk in dollars per trade.

If you are too strict on the daily rulesets, you'd be thinking you did something wrong and need to change dramatically, whereas you are just within the normal performance measures for that style

Having said that, I will say that was a good idea for me to have daily profit goals to go hand in hand with the procedural goals.

My daily objectives are two-fold and are related: trade professionally AND make money.

Evolving from those two objectives, came my idea for the bullets and feeding the dog first every day.  Those 2 techniques actually support both objectives.

They are a disciplined set of rules for money management and they also increase the probability of meeting my daily goal of feeding the bulldog.

I would recommend that you have a daily log sheet of trades taken, and why,  and grade them along with a daily R net, and a daily $ net.

You really want to be net positive for a week and a month as a goal, rather than every single day, because a week and month you now have enough trades, probably, in order to examine performance statistically and systematically.

These are ideas that come from statistical process control, where a fundamental principle is that you must have enough data points from a standard system to judge whether or not it is in control.

Until you have enough data points and a controlled system, you cannot reasonably make changes, because you have not established a baseline in order to proceed with analysis for insight into cause and effect.

So, the 12 tasks of trading, the debriefings, the trade logs, the reviews of performance, all are designed to standardize your approach in order to allow meaningful performance management.