If you have confidence in your understanding of the market you are trading, and have a specific strategy that has a definable set of rules for scanning, filtering, stalking, entering, managing, and exiting your trade, you might think of it in terms of “Ready-Aim-Fire”.
By getting this sequence right, and performing the required tasks properly, you should be able to increase your bottom line through the disciplined application of your rules, whether they be mechanical, discretionary or a mixture of both.
Being “Ready” would include identifying appropriate markets and time frames for your strategy, conducting sufficient back testing and prototyping to allow for confidence on applying the rules, performing the necessary screening and monitoring to identify potential trades, carefully defining an optimized entry ruleset, creating a manageable system for monitoring open risk to stay within your risk profile, and defining exit rules according to a strategy that is consistent and productive in the context of your overall strategy.
“Aiming” consists of selecting the appropriate strategy from your kitbag based on environmental cues from your market sensors, ensuring you have met your criteria fully and completely before triggering. Should also include a rehearsal of the trade itself, time permitting to ensure you have your aim point firmly in mind.
“Fire” consists of the actions we take when we execute our trade based on our rule set that represent our strategy.
This mental model of a trading process can help you examine the different components of your strategy as you go through phases of planning, preparation, and execution.
By examining your performance in each of these 3 areas you may be able to focus in on the topics that most need your attention.
I have a belief that your system will perform as well as your least effective domain in this model.
You can try this idea on for size by asking yourself: What happens when you are good at 2 but terrible at the other? What happens to your performance?