One of the behaviors I am working on with my clients to is to train them to take a Goal/Strategy/Tactic approach to running their businesses. A Goal is the end state of whatever you are trying to achieve. A Strategy defines how you will accomplish that goal, and a Tactic is a specific step you will take to execute that strategy. For most of my clients, the goals are clearly defined, but the strategies are not, and for those who have good strategies, few have clearly defined tactics. Without clear goals, strategies and tactics, it is much harder to achieve what you want to achieve. Hard work is no substitute for clearly defined goals, strategies and tactics.
With that introduction, I turn to Brett Steenbarger who (once again) points us to a way to assess the mood of the market daily. One of my continuing failures as a trader has been not recognizing the mood of the market, and trading contrary to the mood. It is a continual struggle for me to find the “sweet spot” between “looking at too much data” and “not looking at enough data”, and in that struggle I often lose sight of what the market is trying to tell me. Dr. Brett helps to point the way towards recognizing the data that matters and the data that doesn’t.
Now that I have identified that particular weakness of mine, I need a plan to overcome it. My goal is to execute trades that are consistent with the market’s sentiment. If I am satisfied with that goal, (and I am), then my next job is to refine my strategies for identifying the market sentiment. With appropriate strategies, then and only then am I ready to define my tactics for executing those strategies.
I know the GST approach doesn’t work for everyone, but for those – like me – who need an ordered approach to accomplishing anything, it is a worthwhile model for to follow.