Without systems we would all be in a world of hurt. Can you imagine the next time you board a flight you over hear the pilot say to his/her crew, “Well, after we take off, I’ll look around for some clear open spots and we’ll see if we can make it over to Chicago in a few hours.” You are saying to yourself, “WOW, how do I get off!” The pilot has to file a flight plan and adhere to it. We are no different in the trading business. A trading system, if strictly adhered to, will force you to make decisions based upon predefined criteria. You will enter and exit trades based upon a set of rules that should be absolute. Trading systems will for the most part, remove discretion from stock selection, entry and exit. Until you develop an intuitive sense of how the market trades, a trading system will serve to remove decision making and emotions from the equation. With that said, there are very few people who develop an intuitive sense of the markets to the degree that they can trade without a system. In fact, most traders that fail are those that override the rules of the system and make poor decisions.

The system needs to fit your personality and risk tolerance. For instance, there are systems that bet with long options on contrarian plays that may end up losing seven out of ten trades yet can still be profitable. Are you able to psychologically deal with losing seven trades and banking on the other three to “pull your bacon out of the fire?” The drawdown could be substantial before you see account appreciation. That type of system may be fine for some but for most people it would be cause for great anxiety. When anxiety is present, it fosters irrational behavior and subsequent deviation from the system which causes additional frustration and anxiety.

Through the years, I have seen what I term “Holy Grail Trading”. “Holy Grail Traders” are traders who are in quest of the infallible system. These individuals have tried every system known to man and continue to search for the ideal system to this day. There are no infallible systems and anyone who says that is not being truthful. However, there are some excellent systems that will consistently produce profits if strictly adhered to.

In search of a system that works for you, the following considerations should be kept in mind:

· Ease of use

· Capital requirements

· Does the system trade markets to which you are comfortable

· Flexibility and adaptability

· Are others trading the system successfully

· Can you sleep at night trading the system

· Is the system consistent across market conditions

· What kind of support and training is available

Before I go, I would encourage you to check out www.MarketTamer.com. I’m sure you’ll see that the system fulfills the above criteria. Well traders, I have to go, we have a big volleyball game planned back in Sherwood this afternoon. We all got pretty fired up watching the Olympics. The only problem is Little John wants to spike the ball and he has a two inch vertical jump. I’m not going to tell him he can’t. I’d like to be around to trade next week. Robin

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