Dick,
I did a flow chart a year or so ago. The difficulty I ran into is that the markets are pretty random in terms of their influence on your decision making. It is very hard to flow chart an option decision response to a stock price, when there are at least 4 variables, all going in different directions, influencing how much the option price is going to change as the stock price changes. I found that if I followed the chart religiously I had low ROI's overall, and my response time to major events was too slow for effective damage control. However, I do think it is a wonderful learning tool for each person to undertake on their own. I think I will do it again for myself, now that I have been exposed to WINs, and the many other good ideas on this thread.
One thing that has become obvious to me in reading this thread is that while there are certain fundamental principals to follow, there are also many ways to make this game work, mostly dependent on the individual's own style, time available, and resources. I think that Herm's WINs sets a marvelous stage for us actors, and it is up to us to bring our own plays to life. If you are basically a trader, you will react differently than if your are an investor. If you live with the fundamentals, and think TA is mostly voodoo, then you will take a different approach, than the trader who sits hunched over his screen, watching MM magic unfold. Chances are, though, that once you get your own game plan in place that's based on sound practices like WINs, and McMillan, and Bernstein's trading rules, etc., you will relax, and start to have some fun...which means you will actually make some money in this market.
How's that for some Sunday morning fluff? |
