Here is a draft of the talk I am giving to a group of traders this week. Keep in mind there may be gramatical errors. I am a trader not a english major.

A few suggestions for trading successfully. All of these suggestions have to be understood before for trading success.

1 Only trade with money you can lose without noticing. All money has emotions attached. You cannot trade successfully if you have fear and greed. The presence of fear and greed draws your attention to that which supports either.
2 Focus on one trading methodology. Find a trading style that fits you personally. Do not be a “Jack of All Trades” be an “Ace of One”. You will not be successful if your focus is scattered to all the market has to offer. Futures and Options is a good example. How can you win at either if you can’t accurately predict direction? When you hear the phrase “Another arrow in your quiver” run. You are being sold an arrow that will very likely cost you money.
3 Trading successfully takes time and is very labor intensive. The idea of trading stocks and becoming very rich in a short amount of time is myth. If you want to make good money trading you can count on spending as much time researching as you do at your full time work.
4 When you are playing cards and you do not know who the patsy is you are the patsy. Understand the trading and financial industry. The financial industry and especially the trading industry is designed to get your money not make you money. Think of all of the ways to make money trading and the very end of the list comes trading. You can write a book, become a broker, design trading software, own a trading school, ect the list is endless. All of these ideas are easier to make money with then trading.
5 Do not trade to make money. Trade to be a good trader. Focusing on the financial aspect of trading will surely take your eye off of the ball. Use trading as a personal development tool. Being a good trader is not about creating wealth. Being a good trader is about personal strength and not losing wealth. When you develop yourself as a good trader the financial aspect of it takes care of itself. Our put differently learn to trade well and monetary wealth comes sneaking in thru the back door.
6 Discipline in your daily life has to match the discipline you need to trade. You will most likely not succeed trading if you have personal matters out of control. I have taken steps in the past to develop my personal discipline. For a year I fasted once a month on the first of the month. In the middle of the month on the 15th I ran on a tread mill for 2 hours. Look at your life and make a plan of action to develop your personal power. Do you eat or drink too much? Do you smoke at all? If you answer yes to either of these fix these issues then know you have what it takes to trade successfully.

Tips for developing signals and trading mechanically

1 Chose your signal to fit you personally. Every mechanical signal has its own personality. Know that personality and only use it if it fits yours. Consider the win loss ratio and average size of win loss. Consider frequency of trades. Know how it performs in various markets. Become familiar with all aspects of that signal and only use it if it is right for you and your lifestyle.

2 When you discover a timing model that appears to work understand if you go back in time far enough it will fail and it will probably fail immediately going forward.

3 Find a timing model that works presently and in the past for at least 36 months. Do not trade that signal tell you follow it in real time for the amount of time that you are comfortable with. I suggest at least a year and more than 20 trades.

4 All back test research has to be done in a matter it can be replicated in real life. Design a signal that can be followed 100% identically. When you create a signal that works it will only work if you follow it exactly.

5 Study the signal history. How many losing trades in a row has it produced? Can you emotionally handle it? How many percent did it go down and can you live with that? Are the biggest trades on the up side? Is it trading too often or not often enough?

6 Back tests can be considered for a signals evaluation but not for much. Only by tracking forward in real time can you evaluate a signals characteristics. It takes a lot of time going forward to have an accurate evaluation of a signal. Back test only do not work.

7 If you are trading mechanically you are better of not watching the market or current events and news. Is this not our dream? Make a reasonable return while playing golf or pursuing what ever it is that you enjoy. If you do alter your signals based on what you think make a log and track you performance compared to trading the signal exclusively. I suspect if you have changed your signal based on what you think at the time you will have less of a return.

8 After creating a signal and it fails do not go back and adjust the signal to make money where it failed. A failed signal is a failed signal. When you go back and adjust perimeters to make money you have curve fit your signal. The more you adjust or the more you curve fit the worse it will be going forward.

9 Very important if you like one of the signals shown tonight. Take the time to back test them yourselves. Do not take my word for it. Verify all of my results.