It can be overwhelming if you let it be:
Starting a project like we did, back in February of 2022 at the height of the Scottsdale real estate frenzy (thank you, Brenda) we got two bids over the asking price in two days on our beautiful condo with a private elevator, electronics galore and a kitchen that was all I needed to prepare multi-course dinners for guests and us. I asked my lovely wife/real estate expert, “Are you kidding me? Where will we live?”.
Her answer, “Every summer, we head to our mountain home and we’ll do the same thing this year. The difference is, we will stay up there longer than we usually do.” I immediately started my mind racing through all the steps:
Storing all the personal belongings for the Scottsdale house
Moving important stuff to our summer home
Locating a rental in the Scottsdale, as a base to look for a new place
Finding the new place and purchasing it as the market softened
Selecting a General Contractor
Getting approval from the HOA to have a construction project going on for 13 months
Demolishing the inside of the house completely; all flooring, appliances and cabinets.
Selecting the new insides to the house and purchasing same, ordering furniture
Building it all back new
Moving all the stuff into the new place
Changing all the utilities and official addresses to the new address
Decorating
Overwhelmed would have been an understatement of where my mind was in the beginning.
Trading can be overwhelming, especially to new traders:
The process of good trading can be a bit overwhelming as well, if you’re doing it well. You’ve got to:
Decide what you will trade
Find consistent, quality data to work with
Figure out which broker will serve you the best
Find the capital to start an account
Decide on objectives for your trading, (return objective, risk tolerance, time periods to use based on your schedule, how much automation you wish to bring into the mix, etc.)
Decide on a buy/sell engine that will trigger your trades. Will you be trend follower, swing trader, or day trade?
Figure out a sound position sizing procedure, so that you always have an appropriate amount of capital invested in each of your positions; not too much and not too little.
Single or multiple strategies?
Single or multiple time frames?
Develop your schedule to religiously execute your strategy flawlessly each period you decide to operate in.
Plan out contingencies to keep things on track when life intervenes.
What to do when faced with eating the elephant?
You have to take a small bite, then another and keep your eyes on the prize: the completed project. But, even that can be overwhelming. I was facing a two-year plus project involving a lot of money, time and decisions. I had to rely on others for part of it, so not so great for someone like me that prefers to make sure he controls as many parts of the puzzle that he can.
Some of it I couldn’t plan at all. Could we live in the summer house in the winter? It wasn’t designed to have us there in winter. We’d never been there before in the winter for an extended period.
Could we find another location that would have the views, potential for landscaping, floor plan that worked in an area of Scottsdale that was convenient to all the things we love to do.
Would the General Contractor be able to pull off all the things we wanted to do to the house? He looked good on paper, but who knows?
?
Make an overall guide and mini project schedules:
When you start your journey in trading perhaps you take an assessment of yourself and your strategy and decide there’s a lot lacking. See the list of things above and grade yourself. Start with a guide of all the overall goals you seek to attain. Then, break those myriad of items down into doable projects with schedules that are reasonable. At any one time, one of them is the critical path to completing the entire package of items, so make that a priority. When finished, celebrate the milestone and start on the next one down the critical path.
Critical path scheduling is something commonly used in construction. You wouldn’t be able to set your appliances until you have cabinets and countertops into which you can set the appliances. In critical path lingo, that means you make sure the cabinets get there first and get installed, then the slab contractor sets the countertop, then the appliances come in. One thing logically leads to the next.
In landscaping, you would lay down the irrigation, then install the plants. Doing it the other way around, you might have the plants die before you could get water to them.
Some “trading project examples”:
You need a way to size your positions to check off all the boxes on your ultimate trading strategy. You don’t know where to start. Set up a small project that looks something like this:
Buy a book on position sizing. (I happen to have written one! Link)
Decide what formulas or logic you will use to size each position that you consider getting into.
Decide if and how you will manage the position size over the life of the position.
Create a simple spreadsheet with key inputs necessary for you to size the position.
Test it on some new positions. See how it feels to you. Are the sizes reasonable?
Put into your normal flow of trading.
You have a buy/sell engine that is based on swing highs and lows and buying the breakouts above or below those levels, but you notice that in fast moving markets, especially crashes down, your stops get really far away from the market’s action. You decide you need another indicator to counter your existing indicator’s weaknesses. A project might be something like this:
Identify several times when your original indicator ended up lagging badly behind the market’s fast moving action.
Evaluate all the indicators on your broker’s trading platform added on top of your existing indicator and take the first indicator that gives you a signal. You will find some that will keep up with steep moves better than others. Narrow down the list to those that seem to act the way you’d like them to act in helping out your first indicator.
Figure out your time periods. Your original indicator may be a 21 day indicator, so maybe look at something a bit more responsive like a 9 or 15 day indicator that will naturally act quicker on very fast moves. Don’t go so low on the periods that you end up changing the spirit of what your first indicator is trying to accomplish. You want both indicators to provide their own share of the signals.
If you have a simulation platform run some tests. If you don’t have a platform, try creating a simple spreadsheet to test the combo strategy. At least go to your trading platform and take a look at history of your new combo indicator pair and especially concentrate on periods that you know your original indicator lagged badly. See how the combo feels to you.
If you’ve done enough to satisfy yourself that the new combo will help your original strategy, time to put it into play. Make sure the new indicator is everywhere you need it on your trading screens, spreadsheets or platforms.
Make sure the new approach doesn’t change the way you calculate your position sizing. If it will, adjust your position sizing algorithms to incorporate the new indicator.
Execute the new combo strategy flawlessly.
The bottom line:
Any project can be broken down into discrete, doable pieces. You just have to outline the whole thing, break it down into mini projects, and GET STARTED, which is hard for many. It’s easy to keep on keeping on, but that means you’ll keep living in today and never will progress to tomorrow. I’m 71 years old and still looking at ways of mixing my All-Weather approach to trading to improve what I’m doing. (I wrote a book on that as well! Link) No matter whether you are a Market Wizard or just starting out, I like to think of it as a journey to a destination that you will never reach. So, along the way, knock out those projects on the way to better trading and ENJOY THE RIDE!
That's a beautifully designed house. Congrats on a successfully completed project. I have taken a cue from you and have designed a few trading systems wherein I spend about 45-60 mins at he end of the day to feed my orders / stops/ targets for the next day and am done with it.