Profitable ETF Trading Strategies: mastering the execution phase
Successful military operations are characterized by high performance execution of a detailed plan that has been well-prepared and thoroughly rehearsed. The principles that govern military success on a complex, uncertain Battlefield can be successfully applied to improve your trading practice.
In other articles I have examined the phases of planning and preparation in greater detail. Now it’s time to take a look at effective execution for traders.
Some of the key insights in the execution phase include:
Engaging in the trade only when you are at your physical, mental and emotional peak.
Monitoring the status of yourself, the market, the trade you are stalking and your equipment status on a continuous basis.
Keeping market conditions firmly in mind since this will have a powerful impact on the way your specific trading target is performing during the day.
Understanding where the key price levels are for futures contracts as well as understanding any key events associated with the day that may affect the market based on psychological reactions of traders around the world.
Constantly reviewing market and price conditions as you approach key decision areas, while you monitor the criteria for your key decisions so that when all are met, you are fully prepared to act in the appropriate way.
Continuously updating your market assessment, which is an important reason why a trading mastermind can be so useful to your trading practice. With a tribe of like-minded traders working together, your chances of being surprised about market conditions is reduced. More people watching equals more people protecting your vulnerable areas.
Adjusting your trading plan to changing market conditions is an ongoing process that requires attention, practice and skill. The more you rehearse different possible scenarios, the better you will be at transitioning to different phases of the market narrative.
To support your adaptive trading plan you will need to identify the important signals that tell you which scenario is beginning to emerge. You will then assign an appropriate technical indicator to help you judge when these criteria are met.
Finally, maintaining meticulous records of your decision making and trade results will support your after action review process. This review is perhaps the most critical part of your disciplined trading plan, because it allows you to capture the data that you will need to conduct professional analysis of your performance as a trader as well as the performance of your trading plan.
Powerful execution can make up for shortcomings in planning and preparation, but you will naturally want to have all three phases working for you.