Quote from AAAintheBeltway:
Brilliant insights that apparently are hard for many to accept.
Most methods will work in one particular type of market. They will lose in others. For example, buying breakouts or new yearly highs in stocks will work in an all-out bull market. It will destroy you in a down market or range bound market.
Is "buying breakouts" really a method? Do you really need a method to buy a new yearly high?
If buying breakouts will work in a bull market and "destroy you in a down or range bound market," then maybe the method should deal with when you should be buying breakouts and new yearly highs. In other words, the method is what allows you to discern when you are in a bull versus down or range bound market.
Regarding brilliant trading insights:
Everyone knows and can easily accept cutting losses short and letting profits run. The hard part is in doing it. Why? Because it is unclear to people what constitutes a "loss" to cut short and a "profit" to let run and for how far.
If I enter the ES long and the trade immediately goes 2 ticks against me is that a loss to cut short? Yes? No? Maybe? If yes, do I cut it short ASAP or do I wait to see if it comes back 2 ticks to my entry or even a tick in my favor as it does MOST OF THE TIME. And if I wait and the trade comes back +1 tick in my favor is that a profit I should let run? Would it be a mistake to cut the trade for +1 even though initially it was -2 and I wanted to cut my loss short? What if the trade started out +1 and then went to -2? If you don't like using ticks in the example, substitute in points.
Reciting adages is easy: Sell higher than you bought. Buy lower than you sold.
Well, okay, but how do I know it's going higher or lower or just staying flat? If I knew that I wouldn't need a method.