The importance of having effective systems cannot be overestimated. I mentioned in a previous post that I led a one-woman revolution and deleted every single chart in my Stockcharts account. That was 9 years of chart growth.
It took me several days of invested time to rebuild my chart framework. Utilizing the excellent framework of the the Dow Jones industry/sector build, my charts are presented numerically, so they order perfectly in accordance with their industry/sector, are named with the industry symbol and the sector name. It creates the perfect index from my summary sector chart book with 108 charts to each of the individual sectors that contains a chartbook for all of the sector constituents.
"Why bother?" you might reasonable ask. There are two reasons.
Reason 1: In test driving my system this week, and I found that identifying opportunities occurs in a fraction of time of my other 'system': the speed due to the indexing nomenclature that allows me to go from the one list (all sectors) to the many (all charts).
I use the following resources, cobbled together in a fashion that suits my needs:
- StockFetcher--this gives more flexibility in sorting and finding stuff than Stockcharts
- Finviz - gives great profile information and summary information but lacks OTC data and their charting is not to my liking.
- J3SG.com--provides institutional activity.
- ThinkorSwim - This provides great granularity for making entries/exits.
In the past, I've not let my system work as intended as I didn't trust what I was seeing because no one else was talking about it. I want to share these two quotes comes from Justin Mamis, from The Nature of Risk--I offer them because I think that they are the cornerstones of how I feel that I must go about my work.
We need, we crave, the trust and belief from others, but when information is insufficient we need trust and belief in ourselves. We need the discipline to accept whatever is available, and the experience to understand all the ifs, ands, and buts, and yet still take the risk: we need to be able to make the decision. (p. 79).
Discipline means choosing what to do unencumbered by the fear of making a mistake. Confidence means trusting our intuition and that what we 'see' is what we "know." (p. 80)There are 3 modes:
- Researching -- gathering the evidence
- Thinking -- integrating and making sense of the evidence
- Doing-- taking action on the evidence
So, my chart reorganization provided me with a disciplined approach to find strong sectors, strong charts in order to become more reflexive in my decision making. And being reflexive centers on discipline and confidence (like 'wax on, wax off').