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A TopStepTrader's Combine: Designed for Six Sigma


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Updated August 8th 2013 by iqgod
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A TopStepTrader's Combine: Designed for Six Sigma

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A TopStepTrader's Combine: Designed for Six Sigma

I will be embarking on a new TopStepTrader Combine if all my stars align again.

I am not yet fully recovered but getting better.

Passing a combine is not an hobbyist aspiration, this is a business and must be handled as a business.

The best way to organize a combine attempt is to use what has been proven to work over and over. Six Sigma aligns exceptionally well with approaching trading. Six Sigma seeks for continuous improvement after a process already exists.

[IMG]

Design for Six Sigma or DFSS aims to create a process with the end in mind of optimally building the efficiencies of Six Sigma methodology into the process before implementation. There is an engineering background of DFSS. However, like other methods developed in engineering, there is no theoretical reason why DFSS can't be used in areas outside of engineering.



DMADV: define – measure – analyze – design – verify, is sometimes synonymously referred to as DFSS.




The traditional DMAIC (define – measure – analyze – improve – Control) Six Sigma process, as it is usually practiced, is focused on evolutionary and continuous improvement.



I believe this will be the first ever attempt to use this process in trading in a public journal.


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Probabilistic design


Probabilistic design is a discipline within engineering design. It deals primarily with the consideration of the effects of random variability upon the performance of an engineering system during the design phase. Typically, these effects are related to quality and reliability. Thus, probabilistic design is a tool that is mostly used in areas that are concerned with quality and reliability.

When using a probabilistic approach to design, the designer no longer thinks of each variable as a single value or number. Instead, each variable is viewed as a [probability distribution]. From this perspective, probabilistic design predicts the flow of variability (or distributions) through a system. By considering this flow, a designer can make adjustments to reduce the flow of random variability, and improve quality. Proponents of the approach contend that many quality problems can be predicted and rectified early.

Essentially, probabilistic design focuses upon the prediction of the effects of random variability. The Monte Carlo method is the best one used to predict the random variability of an output.

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Combine, from dictionary (relevant to a TST Combine)

Some pertinent meanings of 'Combine' that are relevant to a TST Combine:

- To bring into a state of unity; merge.

- To become united; coalesce.

- put or add together; "combine resources"

- to integrate or cause to be integrated; join together


When knowledge, focus and discipline combine only then can one harvest profits.

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Six Sigma Basics

The basis of Six Sigma is measuring a process in terms of defects. The statistical concept of six sigma means your
processes are working nearly perfectly, delivering only 3.4 defects per million opportunities (DPMO).

Sigma (σ): A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of measurements or a process.A one-sigma process produces 691462.5 defects per million opportunitiesóa percentage of satisfactory outputs of only 30.854%.

Sigma (the Greek letter σ) is a statistical term that measures standard deviation. In the context of management, itís used to measure defects in the outputs of a process and show how far the process deviates from perfection.


Standard deviation: A measure of the spread of data points in relation to the mean. Itís the most common measure of variation in a set of data.

A one-sigma process produces 691462.5 defects per million opportunities, which translates to a percentage of satisfactory outputs of only 30.854%. Thatís obviously really poor performance. If we have processes functioning at a three sigma level, this means weíre producing 66807.2 errors per million opportunities.


Six Sigma: A philosophy of managing that focuses on eliminating defects through practices that emphasize understanding, measuring, and improving processes. Itís based on the statistical concept of six sigma, measuring a process at only 3.4 defects per million opportunities (DPMO).

Defect: A measurable characteristic of the process or its output that is not within the acceptable customer limits, i.e., not conforming to specifications.The sigma level of a process is calculated in terms of defects per million opportunities (DPMO).

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"The only man I know who behaves sensibly is my tailor; he takes my measurements anew each time he sees me. The rest go on with their old measurements and expect me to fit them."
- George Bernard Shaw

Looks like you are on the right path brother. Good luck.

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Qualities of a Trader ("Combiner")

What makes a combiner successful - i.e. what allows him to harvest profits?

Here are the qualities from my point of view:

1) The combiner MUST have integrity. (sounds like a strange quality to list here? But it is the most important!)
2) The combiner MUST enjoy working hard.
3) The combiner MUST be willing to think outside the box.
4) The combiner MUST have common sense.
5) The combiner MUST enjoy working smarter even more than working hard.
6) The combiner MUST have an high Emotional Quotient.
7) The combiner MUST have a sincere desire to help others.
8) The combiner MUST be committed to training without expecting renumeration of any kind, whatsoever.
9) The combiner MUST be have the will to succeed i.e. he must be self-motivated.

These are the qualities that seem to work for me.

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xelaar View Post
Looks like their 70% back for journalling effort is working well!


Yes, that made me jump out of my sick bed and ready to fight again.





If only they had sent out the mailers a fortnight earlier......

Anyways: A TopStepTrader's Combine: Designed for Six Sigma

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