This is an excerpt from today’s SpikeSpeak. Join the group at www.spiketrade.com – and read emails from Alex and Kerry on a daily basis!A book can have a life-changing impact on a person’s life. Several people said that to me regarding my books. I have certainly come in contact with books by others that have changed the trajectory of my life. I still have a book on my shelf during the reading of which I first got an idea to escape the USSR and come to America. I mean, I was ready for the idea, but the book provided that final straw that brought the structure together.There have been business books that had a trajectory-changing impact on me. Today I want to share with you the latest of such volumes – The Checklist Manifesto by Dr. Atul Gawande.Gawande – a surgeon and a terrific writer – tracks the development of formal checklists to the 1930s aviation and the arrival of multi-engine planes:

“Flying this new plane was too complicated to be left to the memory of one person.” He continues “Faulty memory and distraction are a particular danger in what engineers call all-or-none processes: if you miss just one key thing, you might as well not have made the effort at all. Checklists … provide protection against such failures. They remind us of the minimum necessary steps and make them explicit.”

As I read, I saw striking parallels with trading. “Checklists seem able to defend anyone, even the experienced, against failure in many more tasks than we realized. They provide a kind of a cognitive net. They catch flaws of memory, attention, and thoroughness… They do not try to spell out everything. A checklist cannot fly a plane. Instead they provide reminders of only the most critical and important steps.”Gawande interviews pilots, construction managers, physicians, and financiers in his checklist quest. He shares his own surgical checklist odyssey and provides do’s and don’ts for those who would create a checklist.Reading this book I knew I would be designing ‘Elder safe trading checklist.’ How it went and how it turned out would be the topics for a future conversation. Discussing this with someone who never read the book and worked on his or her own checklist would be like discussing bicycling with someone who has never been on a bike. Read the book, start working on your own checklist – I would be delighted to exchange ideas with you!AE

We should all be happy during this rally, right? Well, not so quick. In talking to trader friends and reading incoming emails, I sense a great deal of frustration. Today I would like to share with you two emails, one from a Spiker, another from a Member.Please post your comments, and later I will return with my own comments.Best wishes,AlexFROM A SPIKER:Dear Alex,The group beat indexes during the worst bear market, the group beat Indexes during the final phase of last bottoming on February , However the group has been beaten during last rally.How can you explain this phenomenon?To be honest, I have a negative return on my personal trading account since March 9, 2009.What happened to us?Have we grown into old and stubborn bears?Have we got a mental problem , imagining that we are smarter than the crowd and while we try to proof it for ourselves, the crowd earns money?For example, winners of last week were among bearish spikers and their results were modest, compared to Members who were bullish.Many of us have manically shorted Mr. Market from week to week, but it has been climbing and climbing.Based on technical and sentiment indicators , market is overbought and there are no ideas for professional traders to buy this market.Jason from sentimentrader.com has been neutral since beginning of April.Of course he didn’t participate in the last two weeks of peakining, however he saved his capital.May we need some rest?I think, some of us need a psychological advice.Best regards*******************FROM A MEMBER:Hello Alex,All the STOCKs that I have been followING for months have increased by 50% and more, some of them doubled or tripled.At the beginning of March, I was about to jump into the market and buy with both hands. At that time many signals told me a reversal could appear soon. I didn’t do it because that was not the way I learned: chasing the lows, red impulse, massive amounts of money into a few stocks, etc.Since then, I have been watching the market going higher and higher. All my friends, amateurs, are buying and making money. Even my mother is making money and everyone is wondering what’s going on with me, the most educated one on the topic. The greater fool theory works perfectly as Stephen M suggested it a few weeks ago. They buy far from the averages and their values keep going higher.I feel very stupid. In fact, I have never felt so dumB. I have the feeling that all the work I perform religiously on a daily basis is useless. In addition to technical analysis and psychology, you can’t imagine how much I read about the financial system, the economy, the complex relations between gold, Oil, USD and raw materials as well as Forex in order to understand the environment I had to face up, aiming at building a consistent system for monitoring the markets and trading in a professional way.Reading in your books that the market is manic-depressive is one thing. Living it is another story.I made some money with the energy sector capturing one third of the movement. However, you know how the beginner’s mind works: I can’t help calculating how much I could have earned if … and if … I’m trapped in mental loops of fictive profits with all the values I followed.You are a busy guy and you don’t have to answer me. I just want my shout to be heard by someone who understands because around me, it is the garden party. Regrets, sadness, bitterness, frustration, I feel very lonely. I can’t imagine the day I will be able to make a living with the markets. I’m ashamed of my poor performance. It is hard to stand back and to see this situation with a pinch of salt.Have a nice week-end.***************Thank you for your sincere emails.To all – please comment, and I will return with my own comments laterall the best,Alex