It only took a few hours and I had a permanent connection to their server, two days later I received the short introduction, “how to use the Reuters Workstation.” The connection was complete and now I could start dipping my toe into chart reading and technical analysis just like the pros. The first few weeks seemed to be perfect timing for starting this new venture. The markets were on a nice run and made fresh highs into March of 1997 after the famous words from Alan Greenspan regarding “irrational exuberance.” Despite the euphoria, I remember thinking, “This must be the once in a century top.” All of my new tools showed a similar picture confirming this thesis and the trade was a no-brainer… or so I thought.

It was around this time when my personal pursuit of developing a system took place. While it is far from perfect, after more than ten years, I have finally gotten it to a point where I am confident enough to share it with others.

You may be in a similar place, just starting to create your own strategy or just now considering doing so. If that is the case please let me first ask you some questions.

1.) Can you bear to monitor yourself meticulously over the long haul?

This important question seeks to answer whether you can stand to observe yourself and allow each step and move you make to be precisely revealed to you. This is exactly what you will need to get along as this process will allow you to know yourself better than you could ever imagine now. It starts with discovering your strengths. What style fits your personality? Which trades lead to generally better results within your own trading history?

2.) Do you have the time?

You will need a lot of time, not only for watching the markets and monitoring your trades but also giving attention to your strategy. After defining your own research parameters you will need to record all details, which could influence your decisions. You will need time for keeping a thorough trading journal, which will likely include a separate record for your data to be used to gather your statistics. You will also need patience, as it will take the whole process a few weeks or even months to evolve into successful strategy.

3.) Do you have the possibility to dedicate some money just for testing your strategy?

Ideally you could establish a separate account just for developing your own system. It seems much easier to not have your “scientific trades” mixed up with your daily trading decisions as you develop the system. While I think it makes sense to take off all conceivable pressure from your creative work of developing the system I don’t like the idea of paper trading. This allows for too much loss of accountability for your trades. You are better off working with a small amount of money that is real and which causes you to manage it as such. Be careful though as allocating larger amounts on superficial knowledge could be quite hazardous and extremely distracting from your final goal of developing a tradable system.

So, over the next few weeks I would like to guide you through my story and how I got to where I am today with my system. It hasn’t always been an easy road but it has been a rewarding one.