the3500 roadmap

I have decided to follow the advice in one of Rocko’s comments, and have created a road map. It is not necessarily a road map to success, nor does it outline my trading strategy in any detail. What it provides is a compilation of all the useful advice that has been generously contributed by readers over the past week. It is a road map of trading behaviour, an explicit reminder of what to do and what not to do.

By keeping this advice close at hand – it is posted just above my computer – the aim is to use it as a daily reminder to help promote my strengths and keep my destructive behaviours at bay. The positive points that I need to focus on are highlighted in yellow, and the negative points are highlighted in green.

Over the past week, with the help of others, I have better recognised and identified my weaknesses (although I am sure there are some still lurking under my introspective radar), and it has culminated in this road map. The next step is to take action. This is harder, although I am already taking gradual steps in the right direction.

Special thanks to the following readers for putting in the effort to helping a struggling trader: Brett Steenbarger, Michelle B, Rocko, LP, nonadams, femi, Paul, Don C, adalfu, and indirectly: Victor Niederhoffer, Fyodor Dostoevsky, and Miyamato Musashi (The Book of Five Rings). If you look carefully, you may be able to spot your names on the trading plan.

When I report my trading results at the end of each weak I will also provide a brief comment on how well I have followed this behavioural road map of trading.

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14 responses to “the3500 roadmap

  1. “…the aim is to use it as a daily reminder to help promote my strengths and keep my destructive behaviours at bay.”

    It would be better to exclude the negatives all together, and have ONLY the positives. A positive affirmation is much more powerful on the mind than the negative. As long as you focus on the positive, the negative will be overcome naturally effortlessly. It is when you focus on the negative where things start to go wrong. This was the key from books like The Science of Getting Rich by Wallace D. Wattles (http://en.wikisource.org/wiki/The_Science_of_Getting_Rich), and Think and Grow Rich by Napoleon Hill (http://en.wikipedia.org/wiki/Think_and_Grow_Rich)

  2. Thanks for the links Rocko. I will take a look at them in detail a little later.

    In my case I want to lay my weaknesses out in the open and try to deal with them head on. Afterall, I have ignored them for long enough, perhaps even to my peril. I realise that dwelling on the weaknesses can be disastrous but if I don’t make them explicit the risk is that I will soon forget them, and that they will just keep on repeating. I agree that focussing on strengths is the route to success, but at the same time I think one needs to be fully aware of one’s weaknesses – it seems that through history man rises by his strength and falls by his weakness. I hope this is a constructive, realistic approach.

  3. Lest I forget to look up, I have set the road map image as a wall paper on both of my monitors.

  4. Here’s an example of what I meant-
    My dad is diabetic, and depended on insulin shots. For a long while all he stressed about was the expenses incurred from the shots, and tried to solve this issue individually.
    One day, a family friend who’s a physician showed him that a diet with NO-sugar would greatly remedy his condition. After a month on the minimal sugar diet, which was actually much less expensive to maintain, his dependency on insulin went away. To this day, my dad’s focused ONLY on his diet, and has completely forgotten about the insulin issue.
    Now how does this relate to trading? I used to stop myself out due to fear caused from trading in too large of positions. The solution was obvious, I started trading in smaller positions risking no more than 1.5% per trade, and performance improved immediately and you know what, I never ever thought about the old issue anymore because it was not a problem anymore, concentrated only on what worked.
    By focusing on what’s needed to be profitable, and doing just these things therefore becoming profitable, any little problem from the “weaknesses” will go away and should be forgotten. After all, you should be too busy becoming profitable consistently to stress about anything else 🙂

  5. Good point Rocko, for me the story says a lot about understanding root causes, as well the benefits of taking a positive approach.

  6. Caravaggio, When my gremlins ruled my turret, I listed all three on a big poster nearby and under the list stated the following: I do not trade to gratify or stimulate myself, and or try to control what I cannot. The do not’s were clear limits to my behavior, and positively helpful.

    After around a few months, I could take the list down, and was able to identify when the gremlins appeared on my own. Eventually, I started just to focus on listening to what the market was telling me regarding opportunities. It was a gradual process.

    The non-addict within you knows what best to do to control the addict within. Since the addict can be stronger, feel free to do anything that can help the internal non-addicted observer to become the master.

  7. Michelle, the importance of confining the limits of emotion in trading is really hitting home. I’d like to get to a point where I am close to emotionless as a trader, and only then I would like to slowly reintroduce certain emotions in to my trading – a kind of ’emotion quarantine’. That said, right now it’s mostly talk at my end. There is so much more that I need to act on!

    Your last point about the two personalities within is excellent. I had never thought of it like that before. There is a battle being fought, and I can feed or starve either side. I will keep it in mind. Thanks again.

    PS – If I ever get to your stage of mastery, I will pull my road map down. Right now however, it is acting like a pair of stabilisers on a very wobbly bicycle.

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  13. Stumbled across your site and I’m interested in the process of your development of your “road map” and how you develop a “score”. I’d like to explore this and see how it might impact my own trading. Thanks for your insight.

  14. Hi Wild BBQ Bill, the roadmap largely covers is the subjective/behavioural element of my trading life. I have uploaded a pdf scan of the updated roadmap here:

    In 2007, I used to give a rating at the end of each week, asking how well I had kept to this plan. After a while, I realised that the score needed to kept at the end of each day because it only takes one behavioural mistake to destroy one’s capital. Even though the approach is highly subjective, this score keeping exercise was important because it forced an honest appraisal of the days activities. I also wanted to see if there was a visible correlation between having a good behavioural score and making a profit, or vice-versa.

    In 2008 I have stopped keeping track of the score on paper, although I still perform a mental review of each trade. The impact on my trading has been highly significant however, because I have learned that the correlation between discipline and profit appears very weak on a day to day, or week to week basis, but that it is crucial in avoiding large scale losses. If the correlation was blindingly strong, I believe less people would suffer from behavioural problems. However, because the correlation appears very weak, it is easy for traders to slip into behavioural problems without realising it (via feedback in their results), or even worse, poor behaviours may be negatively reinforced with random good results. It is too easy to be deceived in the short run, and then, one day….kapow, it hits you straight in the face. It is because the correlation is weak that it is crucial to keep on top of our game.

    best wishes

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