I think I'm doing pretty ok now. Who's to say SPY or gold will consistently go up over time? I understand the way I trade is not for everyone. When the market goes up slowly I don't make very much money, and everyone else does. When the market is wavey I do better and everyone else complains that it's not going anywhere. When the market tanks and then renounds a bit, I make a lot of money and everyone else complains about how much they are losing. Except the people who can predict price, of course. They make money no matter what
I meant to try to get some insight into what your strategy actually is, and what you think your edge is. Do you use any technical signals or methods whatsoever? If not how do you time entries and exits? It seems to me (though I could be wrong) that you do use some technical methods to predict price, just with very little precision.
No, I mean predict. There is no following. The market can reverse at any time. I know everyone likes to talk about "trend following," but I've never seen it done successfully. As soon as the trend is established, it can end. Following the market gets you on the wrong side enough that you will have negative expectancy because for every huge trend that is a homerun, there are a bunch of little choppy fake trends that will stop you out. The solution to that is to know ahead of time if it's going to be a real trend or just chop, and that requries prediction. Trend indicators are useless because they only tell you if price has been choppy or trendy to up this point, not if price is going to continue to be trendy or choppy in the future. Just as a trend can end and reverse at any time, choppy/trendy behavior can change at any time, too. If you know a way to predict chop/trend beforehand, please let me know so I can go all in in the correct direction
My edge is my position sizing and my patience. Entires are more an issue of math than of technical analysis. I do draw lines on my charts, but it's mostly just for fun. Sometimes price bounces off of them exactly. Am I a price predictor? No, because sometimes it completely ignores the lines. I figure if I accidentally disover a predictive method that works, then awesome. And if not, that's fine, too. I pay attention to S and R levels, what price does at those points, what volume does there, etc. etc. but I've never seen any correlations or patterns in years of looking at that stuff. Maybe some people have the secret formula, but I don't. I can tell you that every indicator I have tried, reverse engineered, or designed on my own, in any combination and with any settings, was unprofitable. Reversing the buy/sell signals was also unprofitable. But I also believe this is a stage that every trader needs to go through. I remember when I was addicted to indicators and trying them all out, thinking I found the secret to profitability and then realizing that no, it doesn't work. It's like once you're let down for the 100th time, you finally "get it" that they don't work and can move on to the next stage of trading (whatever that may be for you). Sometimes I look at indicator vendor sites for fun, now. And I can usually tell within 2 seconds if it is BS or not (hint: it always is, unless they only show cherry picked charts). What is also funny is when vendors show the buy and sell signals but they don't even indicate them correctly; like they show a buy on the candle before the indicator actually gave the buy signal. Sorry dude, there's no way you got that signal in real time I am confident stating that if there is a holy grail, it does not involve indicators. I believe indicators exist to scam newbies and to help things make sense after the fact. They have no predictive power and are therefore useless in trading. I would like to see the P/L statement of vendors. Oddly enough, I noticed that when I started doing the opposite of conventional trading wisdom, I started doing better. They say 99% of traders lose money, right? So it might make sense to consider doing the opposite of what they are doing. I buy when price goes down. I average into losing positions. I sell when price is going up. Sometimes I go long and short at the same time on the same instrument (see my previous journal). Trend followers always tell me I'm doing it wrong, yet I have a profitable journal with entries and exits posted in real time or before and they do not. Of course I wouldn't recommend doing any of that without careful analysis of position sizing, risk tolerance, etc.
You have just described by people fail in this venture and it's not because of the reasons you listed but because of how you listed them. Keep doing what you are doing, your mind is not fit to be a trader.
Well if you would like to disprove anything I said I am all ears. Until then I'll keep doing what I'm doing. 12/5: QLD: $158
I haven't posted any updates in the last few days cuz price has just kinda been chopping. But check this out. I'm not really one to put much faith in trendlines, since it seems they don't work just as often as they do work, but the trendline in this picture seems to have been legit (although that is no guarantee that it will continue to work in the future), and that high on 11/2 seems to be providing resistance (although that is no guarantee that it will continue to do so in the future). I don't really factor any of this in in my trading decisions, but it's interesting to watch. Let's not forget that you can also draw a chart with lots of S/R lines that end up not working out. Don't be fooled by this chart I've posted. This kind of thing is only useful if it gives you predictive power. If you ever figure out a way to tell which trendlines and which S/R lines will be used, you have part of the holy grail (the other part is knowing when to exit).