7 Habits of Highly Effective Trading Groups

I believe most of us agree that trading can be quite a lonely activity. It is usually I... I... I... For instance, I won on the last trade, I lost on the last trade, I backtested, I read about etc... In fact, one would be fortunate if he/she could find someone to talk to about trading! This is where trading groups come in. Well, I have been in a couple of different trading groups so far. I've got to admit that most of the trading groups that I was a member of eventually dissolved or disbanded (Well, currently, there is this special one which is still full of steam!). So I thought I could share on my belief on how we can make trading groups effective (or even more lasting, for that matter :-P).

1. Look for members trading the same strategy/system - Well, most (if not, all) of the trading groups that I was involved in were formed after I attended some trading courses. Mainly because the students wish to form some sort of a support group to help each other and to learn from each other. It is crucial that members of a trading group are trading the same strategy or system. Actually, it is almost also important that they are trading the same timeframe. I have seen when members were not trading the same strategy/system, there would likely be no constructive comments and discussions and in certain cases resulting in some time-wasting disputes.


2. Have a projector around - When having a discussion on trading, it is almost inevitable that we would need to look at some charts, website etc. Can you imagine a group of 20 crowding in front of a 15" monitor while someone is sharing some information on his notebook?


3. Be seated in an effective manner - Most people don't really focus on the seating arrangement because usually finding a good location for group members to come together regularly is already as difficult as it is. We have to be aware that the larger the group, the more important is the seating arrangement, especially for effective communication flow and knowledge transfer. Personally, I feel the typical classroom style is good enough. But my most preferred seating arrangement is one in which everybody is seated in a circle and facing outside, with our notebooks of course.


4. Set an objective for each meeting - If not, most meetings would turn out to be casual chit-chat sessions. In general, when trading groups meet, it could be for live trading (provided the trading timeframe allows) or for discussion. Activities for meetings can include:
   
   
   
   • Sharing past trade results, charts and thought process before and after trade execution
   
   
   • Suggest improvements to strategy/system and get members to go back and backtest for each to verify if there really is an improvement
   
   
   • Suggest new strategy/system (proven)  and rally members to backtest/demo trade together
   
   
   • Watch training videos together, followed by discussion of the videos
   
   
   • Summarize and share concepts from a new trading book... etc


5. Decide on mode for trading together - This is for "live" trading sessions where group members come together to trade together. There are a few proposed modes for trade as a group:
   
   
   
   • Signal each other when there is a trade setup
   
   
   • Trade first, evaluate the outcome later
   
   
   • Trade a common pool of funds. At any one time, one person will be trading, the others will be analyzing and providing advice.


6. Develop good trading group culture and rules - One of the things I don't encourage is to say something is working when it is only based on one or two tries or based on hearsay.


7. Have fun! - Well, that's why we had the trading group in the first place right? Remember to organize activities that don't involve trading