It Never Ends

One of the joys AND the frustrations of creating trading strategies is that there is no destination.

You don’t arrive at an endpoint.

There is no perfect strategy that will work forever and ever, the end.

It doesn’t work like that.

In the best-case scenario, I create a system, strategy, or methodology (choose your favorite term), that works reasonably well in the current market environment. The PnL volatility is acceptable, the gains are worthwhile, and the effort required to maintain trading is in my wheelhouse.

Great.

And maybe I have a good run that lasts a couple of weeks or even months.

Then the markets change and the metrics worsen and are now no longer acceptable.

That’s in the best-case scenario. In the far more likely scenario (at least in my experience), it becomes apparent that I overlooked a potential risk, minimized what I thought would be my emotional reactions to certain risks, or hadn’t considered how labor and commission/slippage intensive it will be to attempt an approach to my PnL expectations.

It’s too much work, far more taxing on my mental well-being, and riskier than I imagined. All bad things are unsustainable.

I need to remind myself that whenever I’m feeling good about where I’m at with a certain strategy, I should enjoy it while I can. But never forget that the work never ends.

There will be more tweaks needed. There will be unexpected tests.

And even if I have a good run with a strategy, there’s always a new strategy, perhaps in a new product or different timeframe, that is worth an exploration. And so it must be.

If we, and our systems, don’t adapt, we won’t survive.

Find joy in the process of constant iteration. That is what will sustain me, and likely you as well.

Trade 'em Well,

Sean McLaughlin
Chief Options Strategist
All Star Charts, Technical Analysis Research