Be ready to revise your game plan.
New products and new types of trades are making investing feel more like a game. But don’t look to reinvent an approach to trading every cycle; instead, stick to a thought-out game plan that allows for adaptation and that can evolve with new information.
That strategy can benefit traders who are looking to create active portfolios. By thinking of trading as a game, they can remove the emotional dimension and instead base decisions on predetermined rules.
To turn trading into a game, establish key components that include mechanical processes and repeatability. Have a playlist of steps and perform them repeatedly.
Mechanics should make 80% of trade decisions. The remaining 20% is the trader’s intuition or “gut feeling.” To maintain that mix, use the rules on the right.
Mike Hart, a former floor trader at the Chicago Stock Exchange and proprietary futures trader, specializes in energy markets and interest rates. He’s a contributing member of the tastytrade research team. @mikehart79