Be rich or be right: when only a written checklist counts as a system

A spread book clients would not keep

A managed-money shop once ran two products in parallel. One was outright long-or-short futures. The other was commodity-spread-trading: simultaneous long and short positions in related contracts, so that P&L came only from the change in the price difference.

Within about six months, clients left the higher-return spread product for the lower-return outright product. The interviewee treated that shift as evidence that many participants trade for excitement and other non-monetary motives rather than for the better process.

Why simple methods still fail most users

The interviewee cited a widely repeated private-trader outcome split of about 90% losing, 5% breaking even, and 5% making money, and used it to ask why simple, long-published methods still fail most users.

The first diagnostic a losing trader should run is motive: whether the activity is meant to make money or to satisfy being right, puzzle-solving, or market excitement. A trading-psychology-process is the discipline of executing a predefined plan instead of substituting those other needs for profit-seeking.

A typical failure mode is abandoning a purchased system after three consecutive losing trades. The interviewee read that stop as a discipline failure rather than as proof that the rules themselves were invalid.

Write the plan, then review entry and exit

A written trade plan is valuable because it keeps decisions objective while a position is open and because it enables a postmortem of how both the entry and the exit were handled. A postmortem is a structured after-trade review of how the plan was followed on both sides, not a story about whether the market proved the trader right.

A pre-trade-checklist is that plan in procedural form: a written procedure that specifies entry, exit, and no-trade conditions from rule inputs, market state, and execution constraints before a position is opened.

After more than 20 years of professional trading, the interviewee ranked the search for a perfect entry-exit indicator as the least important problem. Even decades-old four-week-rule and 5/20 moving-average procedures could be profitable yet still carried drawdowns too large to recommend.

If self-discipline is missing, the prescribed sequence is to keep a mechanical system and assign execution to a broker before falling back to more subjective technical judgment. Sustained professional results were described as daily hard work rather than a one-time setup. A stretch of easy profits that made work feel optional did not last.