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The Process

 
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Rookie

The Process

This post is about developing the "Process", at the end of the day the process will be somewhat different for all traders, why well because we are not all cut from the same cloth. We are each individual with different backgrounds and from different environments forming our own unique Biases.

Top 50 List of Cognitive Biases in Trading

https://capital.com/top-50-cognitive-biases-list

So what makes a process, First off ti make something we need to understand what exactly we are making.

A Process is, a series of actions or steps taken in order to achieve a particular end.

So what is the end game? As traders, it is obviously consistently profitable over a period of time, like a year, 5 years, 10 years but consistent every day, week in, and week out consistent profitability.

Now the next questions how do we get to the goal of consistent profitability? or said another way how to develop the "Process" so I wrote this:

What do traders have a need to know in order to place a high probability trade?. (Jeff)

  1. Location
  2. How far
  3. How fast

Order of Operations by Steve Perry

  1. Pattern Identification is the trade anchor of the thesis of the planned trade.
  2. The sentiment, which direction most traders are trading, for our decision to trade continuation or not.
  3. Context, being able to identify a trend with a trend line in support of the thesis.  
  4. Correlation
  1. Technical correlation, looking at pairs with the same base currency for consistency.
  2. Sentiment correlation, multiple pairs, common currency, with the same sentiment signal.
  1. Alignment, mainly for continuation patterns, look for consistency of short term signal and long term trading bias.
  2. Divergence, used as a heads up for a change in direction
  3. Momentum, increasing or slowing indication the physics of motion, Power Of Strength of the trend,

 To Achieve and Maintain, “Consistency”.

  1. More wins than losses
  2. Average win greater than the average loss
  3. Trade frequency Positive expectancy
  1. Short term, the number of trades will vary by a trader over 3 months but with maintaining number 1 &2
  2. Long term. 100 trades in three months with maintaining number 1 &2

 To make One Good Trade requires following these seven fundamentals: by Mike Bellafiore,

1. Proper Preparation.

2. Hard Work.

3. Patience.

4.A Detailed Trading Plan for Every Trade.

5.Discipline.

6. Communication.

7. Replaying your Important Trades.

 

I often see questions on the topic and I was no exception. It has taken me a long time to become meek enough to accept the market disciplines to become and remain consistently profitable. That means not only making money but keeping it as well. For the most part, newbies have no real clue of the process, just the well laid out Beeline as an introduction. 

Once we become funded as many of us know the fun really starts but for most of us we have not yet traded enough to develop at least one well-founded proven process. Apiary knows this and has a system in place to coach us along the golden brick road. 

 

I am currently in reviewing and rewriting my business plan (thank Rex) and my strategy along with techniques to success. And developing an Asain session trade method. While I have several versions of fill in the blank trade plan I wanted a process a structure to make this new method without all the trial and error of reinventing the wheel. To my answer come a Steve class with an order of operations. Ah just what I am looking for. I am attaching it.

Shawn said the other day that the fund has reached critical mass with funded traders, he did not say how many were trading with real money or provide any hints to how many at various funded levels,  Nor did Shawn indicate critical mass for what metrics, I would hope though that he is referring to the fund's profitability and success. I do know a group of us that have been with Apiary 3-5 years and of the ones I occasionally chat with many of us are still at developing the process level. I hope to start this thread will aid all of us traders to move past the pre-fund and lower funded levels to the Process!

 

 

 

AttachmentSize
Final Order of Operations - Perry.docx514.99 KB
Sat, 09/05/2020 - 11:50am
 
sland55

I am a believer in the "Process" concept Rookie, (I think everybody is to one degree or another; those who acknowledge it, will prosper, are my thoughts). I will be spending time with the information you have compiled and shared. I appreciate it, thanks for taking the time to create this post!

 
Rookie

Thanks, Steve, while there are several here that have contributed to that core belief, perhaps after Shawn. Allen is one of the best examples of developing a process via the Kai Zen principles.

Congrats again on your funding, your process is well on its path.

 
robunited

I love this one ...

What do traders have a need to know in order to place a high probability trade?. (Jeff)

Location
How far
How fast

PA dynamics ... it works.

 
Rookie

How many times I have typed that phrase... to that end;

Today I wrote for my predawn "Cramer Report" to another trader.

GMorn trader, take care trading today, in doing my predawn analyses the DXY is dead center along with the associative pairs and the VIX started out gray IE no change. The news is light and Powell will be making a speech. While I have no real clue which way the market will go my inclination is the dollar will drop some and the EUR will climb some. At any rate, I am not trading until I see some direction and then in a sandbox.

attached is the Prie action that ensued over the last 1 plus hour. it doesn't matter that my observation was so far right on, but if I follow the process?

9-22 and what happened.PNG
 
tlpeeples67

Great information! Formulating a process and sticking to that process can be challenging. It's easy to get get distracted (at least for me) and not follow a daily set routine. I am currently working on streamlining my trading plan for silver 3 and trying to honest about with myself about what works and what does (for me).

 
robunited

tlpeeples67 "Formulating a process and sticking to that process can be challenging."

Not really.

I go into a 7/11 every day, many different ones, different places, different cities.

Everyone is following the same process, no one is doing a 'one man show'.

If I think back to my days working for a multinational, we had a ton of processes to follow.

Hiring process, Pre-Sales process, Sales process, Support process etc.

You could make suggestions how to make a process better, but that first got discussed, reviewed and tested, before implemented.

We are all sitting in front of our computers alone, trading ... following our process.

Just because we don't have to double check and report to other people, why should it be more difficult to follow a defined process, we have set to ourselves, written down and agreed to?

Employees around the world do it 24/7

 
Rookie

yepper building your very own Trading Franchise

 
robunited

Yes, it initially sounds like a 'franchise'. But it's more than just that.

If you look at it ... every single business where you apply for a job, has it's own processes to follow.

And you just follow them. And if it's a good business, they listen to improvements, discuss, review, test then implement.

I don't go to Volkswagen in Wolfsburg or Ford in Detroit and start my own individual process on my first working day.

Every business has their business plan defined and it has to be followed by their employees.

We are all used to follow processes when working for other people. I bet the majority of us have done this most of our life, or still do.

And only if we sit alone, and write down our own processes, then suddenly it becomes so difficult to follow?

Why is that? And why should it be so difficult to follow your own process?

Everybody should be happy and free, because now you can follow your own things you have written down in your Trading (Business) Plan. Maybe too much freedom without any control is not good ;-)

That's why I like Funding programs, i.e. Apiary 5% or other ones, max drawdowns etc.

Looks like we need it to get control over ourselves ;-)

 
Rookie

In view of my premarket analysis, It's a good thing I added in "I really have no clue" as the market proved my sentiment 100% wrong with equity bouncing from the last few days lowes and carrying the day pushing the DXY higher and higher conversely EURUSD and GBPUSD lower and lower. Now maybe ready to consolidate and return.

 
robunited

Reading this Ed, I'm really happy I'm free of all sorts of predictions or indications.

Location
How far
How fast

And just trade it as it happens.

I don't have to position myself before a move. I get in as it is in action and motion, mostly overextended.

But I guess this goes a bit away from the 'process' discussion and becomes more a strategy discussion.

Predictions can always be wrong. The action in front of our eyes are realtime and reality.

But the process is always the same, whether it's a losing or winning day.

So if you have followed your process, you have mitigated your risk.
Doesn't matter whether you are right or wrong in prediction, as long as the rules in the plan, the process, has been followed.

22nd trades.png
 
robunited

Well, I have to thank you Ed.

You are always very deep into studies of trading and share a lot.

While I post and reflect, I get to see things about my own trading which become more clear.

I'm a realtime trader, without much future price action predictions, or positioning before a move.

I know my pattern (location), I can see when price is quite over-extended and the dynamics (how far, how fast).

If price continues to by-pass my entries, I got a process ready in place to follow and fix my trades.

I feel that I get more patience to wait until the pattern & PA dynamics shows up.

Always the same process. Location / How fast / How far ... Really good! Fit's my trading to the dot.

So thanks again for that!

 
Rookie

Freedom and flow are awsome!

Glad I can be of help of sorts...--))

As you previously stated we all have our own methodologies, yes, and even Jeff and his is not a Shawn wobble.

On a positive note, I jumped over to my funded for 15 min just to finish the day in the green..:))

happy trading.