Kaizan - Continuous Improvement for Traders
TradersCALM © "Dedicated to trading with good feelings."
In industry, some companies adopt techniques of continuous improvement - 'Kaizan' being just one name for this approach to change.
It is clear from looking at the most common attributes of the more successful traders that have used TradersCALM services - that they are rarely complacent, often looking for improvement - in short, they practice Kaizan.
It has often been instructive to draw out these common attitudes from the perspective of Kaizan used in an industrial domain; we will start with a phrase from such a context and see how it relates to trading as practiced by many of these more successful traders I have called KOWAK - short for Keep On Winning And Keeping traders.
"Idle inventory is wasteful." Trading capital in a trading account is more effectively used if position sizes are reduced so that several markets can be traded simultaneously, each at lower position sizes.
Many KOWAK find this approach results in better use of trading capital and fewer times when capital is idle compared to trading a single market.
"Move from forecasting demand to just-in-time." The majority of the KOWAK traders respond to market movements rather than predict markets.
"Meet customer demands, now and on-time." Service is rewarded, and the service required by other traders right now is the one that the other traders are prepared to pay most for.
"Eliminate all that does not add value to the final product." It may surprise many traders that almost a third of the KOWAK neither pay for a real-time data feed nor have any real-time graphing software. They have found these and data pagers are surplus to requirements - with significant savings in ongoing costs.
"Make products faster." Many KOWAK seem to employ a time based measure of profits as one of their selection criteria - as this is one thing they are trying to maximise.
"Shorten development cycle times." Several KOWAK are trying at least three new trading ideas or variants of existing trading systems at any one time, using a small position size or via paper trading,
"Make no errors." Almost all the KOWAK have developed a range of techniques to reduce their and others mistakes, and continue to apply their checks and balances and procedures long after the error rate has fallen to a very low level.
Kaizan is more a frame of mind than a specific set of processes or procedures. Those that have the Kaizan approach just get better and better - that is why so many of the KOWAK employ Kaizan - it is one of the reasons they originally became members of the KOWAK.
Now what are you going to do abut it? Entry to the KOWAK has no membership fee, but you might have to change your 'vantage point' to join. See also 'good from failure'
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