Turning Your Best Practices Into Best Processes

When I began working at a counseling center years ago, waiting lists for services were the norm--both at that center and across similar centers.  In many cases, people had to wait weeks to begin meeting with a counselor.  From my perspective, waiting lists were an accident waiting to happen.  It was only a matter of time before someone on a waiting list deteriorated significantly in their functioning, leading to an unfortunate outcome and potential legal liabilities.

So when I was asked to lead a counseling center at my next institution, I set a policy of no waiting lists.  In order to accomplish that, I engaged in exhaustive research concerning the types of clients who most could benefit from short-term intervention; those that were most likely to benefit from medication; those that were most likely to require longer-term therapy; etc.  I also scoured the research literature for criteria to determine approaches to counseling most likely to benefit particular people and problems, drawing upon evidence-based guidelines.

Each research-based finding led to a best practice.  For instance, I learned that outcomes were best for people with certain kinds of depression if structured cognitive-behavioral therapy was combined with anti-depressant medication.  The combination of many best practices led to a best process:  by routing people to the right kinds of help that were most likely to be successful, outcomes were improved and waiting lists evaporated.  Therapy became more efficient as well as more effective once an evidence-based triage process was established.

The previous post reached out to readers to ask for their best practices:  actions that have been most reliably associated with successful trading.  These, too, should be evidence-based.  That means that you are actively tracking what you're doing in markets and how you're doing it and seeing what works and what does not.  It also means that you're tracking yourself and the personal factors that account for your good and bad trading.  For example, I have consistently found that placing trades only when backtested relationships are providing current signals increases my hit rate and my profitability.  Starting my trading day by investigating those relationships is a best practice.

When we string together a number of best practices, we arrive at best processes.  My best process for market preparation includes starting the day with exercise; eating lightly; updating markets for those backtested relationships; planning criteria for entries and exits; and writing down my game plan for the trading session.  I have learned that each of these best practices is associated with my best trading.  Combining them into a process creates a preparation routine:  I am turning best practices into ongoing work habits.

The reason my new book stresses the creation of best processes from best practices is that the old trading psychology--the one that links trading success to "discipline"--is woefully limited.  When we established the new triage system at the counseling center, no one had to work on their discipline to conduct the right kinds of assessments for new clients.  Those assessments became part of an ongoing process:  they developed into routines.  The challenge for traders is not to motivate behaviors but to automate them.  First you study yourself and learn your best practices; then you find ways to assemble those best practices into a replicable workflow.

Thanks to readers who already have submitted their best practices.  I especially encourage those involved in mentoring traders to share their best practices.  By creating a database of best practices, we can generate the building blocks for best processes and lay the foundation for more consistent trading performance.

Further Reading:  Four Pillars of Trading Process
.

Comments

Popular Posts