Profitable ETF Trading Strategies: adapting the best practices of military planning
The Military Decision Making Process is a reliable way for military unit commanders and their staffs to conduct rapid yet thorough planning and produce highly reliable plans that have an excellent chance of producing success on a complex and uncertain battlefield in the face of a dedicated, adaptive enemy bent on their destruction.
It is not a surprise therefore that such a robust procedure can be very effective in the development of robust trading plans, since the market has many of the same qualities that we find on the battlefield.
The military decision making process is properly understood as the first part of a 3 phase approach to success, namely: Plan, Prepare and Execute. Each of these phases deserves attention from traders who would seek to achieve high levels of performance in their trading practice.
Let’s look more closely then at Planning, and some key points to emphasize.
Planners must already have information on the unit, its condition and the enemy in its area before planning may properly begin. We must understand our present situation in order to establish a point of departure.
For the trader, this means, knowing yourself, your strengths and weaknesses, your proficiency in different styles of trading, and having equipment that enables you to compete equally or better in the markets of choice.
Planning begins with a thorough understanding of the Mission which lays out the tasks which must be accomplished to be successful and the purpose which success will serve. Fort the trader this equates to a deep understanding of your goals and objectives. Being clear on these enables you to develop trading plans that are aligned with your definition of success.
The Commander’s Intent is next, which lays out a vision of the successful end-state, identifies critical supporting tasks which must be accomplished to get there, and specific instructions to subordinate units.
For the trader this equates to having a vision of the success firmly in mind to maintain your focus on positive outcomes. It also includes identifying those support functions that must be a part of any robust trading plan, such as a commitment to maintaining your appropriate levels of position sizing and risk in order to protect capital and achieve required results when successful.
These are just a few of the useful and powerful insights that traders can apply from the world of military planning.