Performing these 3 tasks in a different sequence than the usual "Ready-Aim-Fire" is counterintuitive, and at times seems risky. However, there are some markets with opportunities that are so fleeting and explosive that if you wait for everything to fall into place, by the numbers, you may discover that you are too late to act in time.
The tasks underneath Ready, Fire, and Aim are generally as I described in an earlier article, but there are some refinements that will help you understand the crucial shift in perspective.
Being "Ready" includes identifying appropriate markets and time frames for strategies that you have already individually mastered. You still must validate strategies through backtesting, prototyping and analysis of results. You must have an adaptable, agile risk management system that allows you to quickly determine position sizing once a strategy is selected based on environmental cues. This must be internalized to the instinctive level to ensure you are not fumbling around in the moment of decision. Hueristics help a lot here, as long as you make your tradeoffs in the direction of lower risk.
"Fire" consists of quickly entering positions at appropriate risk levels given our heightened sense of uncertainty, as we prepare to let the trade unfold along one of several possible paths.
"Aiming" now consists of morphing your trade idea towards the more likely patterns, and adjusting your decision-making and risk management towards the parameters of the more likely patterns.
Rehearsing your decision tools and management indicators is absolutely essential in this phase. The sequence of this trading strategy creates a significant conceptual change, but one in which an adaptable, skilled trader may find opportunities to get early, risk-managed entries into winning trades.
It is not for the faint of heart, or for traders who have a need for feelings of control and certainty to guide their trading.
Ken Long, Chief of Research, Tortoise Capital Management
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Article SIf you don't have confidence in your understanding of the market you are trading, and or 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 the opportunities in terms of "Ready-Fire-Aim" instead.
Performing these 3 tasks in a different sequence than the usual "Ready-Aim-Fire" is counterintuitive, and at times seems risky. However, there are some markets with opportunities that are so fleeting and explosive that if you wait for everything to fall into place, by the numbers, you may discover that you are too late to act in time.
The tasks underneath Ready, Fire, and Aim are generally as I described in an earlier article, but there are some refinements that will help you understand the crucial shift in perspective.
Being "Ready" includes identifying appropriate markets and time frames for strategies that you have already individually mastered. You still must validate strategies through backtesting, prototyping and analysis of results. You must have an adaptable, agile risk management system that allows you to quickly determine position sizing once a strategy is selected based on environmental cues. This must be internalized to the instinctive level to ensure you are not fumbling around in the moment of decision. Hueristics help a lot here, as long as you make your tradeoffs in the direction of lower risk.
"Fire" consists of quickly entering positions at appropriate risk levels given our heightened sense of uncertainty, as we prepare to let the trade unfold along one of several possible paths.
"Aiming" now consists of morphing your trade idea towards the more likely patterns, and adjusting your decision-making and risk management towards the parameters of the more likely patterns.
Rehearsing your decision tools and management indicators is absolutely essential in this phase. The sequence of this trading strategy creates a significant conceptual change, but one in which an adaptable, skilled trader may find opportunities to get early, risk-managed entries into winning trades.
It is not for the faint of heart, or for traders who have a need for feelings of control and certainty to guide their trading.
(Expert=Ken_Long)
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