Try the flowchart exercise: Start with the ways in which you generate trade ideas and then capture the
decisions you make regarding how and when you turn those ideas into trades and how you manage
their risk/reward. The flowchart should capture how you prepare for the trading day and how you
review your trading. Try to make the chart so detailed that a reader would be able to replicate much of
how you trade. How detailed is your flowchart? How many alternatives for making money does it
capture? How well does it structure the times when you shouldn’t be trading? How well would the
process captured in the chart adapt to changes in market conditions? If your process isn’t flexible and
adaptive on paper, can we really expect it to provide you with viable alternatives in the heat of battle? A
good football team prepares a number of running and passing plays and flexibly draws on those to
exploit the defense on the field. Our playbooks need a similar level of flexibility.
So what is your level of readiness for change? How prepared would you be if tectonic shifts were to roil
your markets? Let’s try a short self-assessment, consisting of seven questions. It’s important that you
write your responses before moving on in the book, so please take the time to think about and sketch
out your answers—after all, we’re talking about your future! A few sentences for each question should
be sufficient for the exercise.
Self-Assessment Exercise
■ How, specifically, do you expect your market(s) to evolve over the next several years?
Answer. Greatly, with algorithms, short-term gains (day trading) may become harder. Complex systems
will come up but simple ones like trend line, P.A action & swing trading which require patience will still
work. A person with a bag of trade strategies, proper risk management, hedging positions through
different strategies may survive.
■ Where, specifically, do you perceive the greatest areas of opportunity in your market(s) over the next
several years?
(new inputs- fresh fundamentals & information, New markets or sectors to trade, new time frames to
trade- longer holding time frames to adapt to the changing markets .New strategies to trade.
ANSWER: High time frames. Holding positions through news with wide stops
■ What, specifically, has been the greatest source of threat to your trading in the past year?
Answer: Fear of news, hence closing positions too early & not letting the trades play out. Change of
strategies during drawn down.
■ How would you need to change your trading to keep pace with the shifts in markets, opportunities,
and threats noted above?
ANSWER: Fear of news (wide stop loss, entries on strong key areas). Change of strategies during drawn
down (having portfolio of strategies to hedge drawn down period brought by each strategy, hedging
positions)
■ What are you doing now, on a regular basis, to master the learning curve needed to exploit the
opportunities and avoid the threats you foresee?
ANSWER: Back testing and forward testing different strategies to increase more opportunities and tackle
the problem of system failure. Daily reviewing inactive trade to manage trade exposure and carryout
fitting risk management
■ what new markets or market information are you examining in detail to help prepare you for the
future?
ANSWER: Reading trading psychology books, & soon understanding the fundamentals