Learn to Trade Forex - Trading System "Trade-ability" Quick Test

Hi, Brian McAvoy here with Inside Out Trading. And today I want to share. This is a short video, but I'll share with you a tradability test that you can apply to your trading system to see how tradable it is. And it'll let you know if you maybe have some functional issues with your system the way you've got it set up or documented. Again, this is just a really good way to tell if your system is really tradable or if maybe you need to take another look at it. This is really helpful and here's why. Because if your system is not very tradable, if it's not very user friendly, you're going to have a hard time executing it consistently. See, most traders think that they just kind of presume that their system is okay the way it is, that they never think to question, hey, maybe the way I have my system put together, the way it's structured or whatever, that there's an issue with that. That is part of the reason that I'm not trading as consistently as I would like. Anyway, here's just a real quick backstory on how this came to be. I used to be a quality manager in a manufacturing operation. We made plastic beverage bottles. It was a high speed, high volume, razor thin margin operation and we had absolutely no room for inconsistency, for variability. If we started running bad product, the cost would just kill us. So we had to know that we were running good, consistent product every day, all day. When we first started up the plant, though, we had a whole lot of procedures and work instructions throughout the place that were not being followed. We were getting really consistent performance out of people. The way things were being done, there was a huge cost with that. Scrap and rework and bad product, unhappy customers, all kinds of cost with it. When I got to looking at it, being the quality manager, it was my responsibility to fix this. Consistency was my job. When I got to looking at the procedure work instructions that were being used throughout the different departments, what I found was that's where the problem was. They were poor documents and that's why people weren't following them. What I had to do was come up with a process and train all the department leads and the experts in the department, the people who were writing the work instructions for everybody else. I had to teach them how to write a good document so that people using them could use them and they would use them and everybody would begin using best practices everywhere, consistently. Here's the way we wound up coming up with the final requirement before Anybody could submit a work instruction to the document. System was they had to test it. They had to go get somebody that worked in the plant, they knew their way around, but. But didn't do that job. And then they would take that person and hand them the work instruction and say, here, go do it. And if the person could go do the job and do it right without asking them any questions, then it was okay. It could be submitted. But if the person had any questions or they didn't do the job right or they had difficulties, then the person writing it had to go back and fix that. It works the same for your trading system. Here's the test. It only takes about two minutes, five at the most. It really should not take more than five minutes. If it takes more than five minutes, that's a red flag too. It should take two to five minutes. But what you need to do is just sit down with your trading system, your document, however you've got it written down, and go through it as though you were somebody that had not seen it before. You understand trading. It doesn't have to explain every little nuance. This is a person who knows how to trade, but they don't know your system. What you do is you look at it from the eyes of this person, somebody who does not. They're not familiar with their system, and you go through it from that viewpoint. The whole point is, if your system is not such that you can hand it to somebody else and they could trade it the way you want it done without having to ask questions, then you've got a problem with your system and you need to fix it. Because again, if you couldn't hand it to somebody else and have them follow it, how can you follow it consistently? Again, like I said, being a quality manager, this was my job for over seven years. And it was a high. It was pressure. I had to be getting good performance out of people because otherwise it would cost our plant literally hundreds of thousands of dollars every month. And I'm good at it. This process works. It proved out. So again, the test, real simple. You don't have to give your trading system to somebody else, but you can look at it and as you look at it, score it just on a scale 1 to 10 or out of 100, whatever, however you want to score it. But again, could you hand it to somebody else? And if you were that other person, when you're looking at it, could you follow this system and do it without any. Quite. Without having to ask the question, the author, any questions? That's the test helping you trade more effectively, more consistently and more comfortably and effectively. This is a really, really good quick test of your trading system as far as tradability. There's a lot more to obviously creating a good solid trading system, but this is a good quick look to let you know if you have problems here. If you want to find out more, swingbyinsideouttrading.com we have a bunch of free videos, got a couple of free reports, lots of resources for you to help you become a more consistent and successful trader. So come on by the site if you'd like to find out more about this. Take the test. If you need some help with it, send me an email briansideouttrading.com and let me know how I can help you. Whatever your challenge is right now, if you find out, like I said, your trading system doesn't score 100. Look me know if you can't figure it out yourself, let me know. I'll help you out anyway. It's Brian McAvoy with Inside Out Trading. Talk to you soon. Cheers.