Wednesday, August 27, 2008

Your Brain's the Grail. How to Make It Holy


Ok. Let's do something really crazy. I've something big to confess. I've been hiding it for months because I don't want the headlines, I don't want our servers to crash, I don't even want the private island and the jet to take me there. But now, I can't hold it in any longer, so here goes:

We have the holy grail -
it's a strategy that, when used, is a guaranteed huge money pile maker. It's one strategy and it's never changed. It tames every: market situation, scenario, big news event/disruption, slow day, or fast day into a consistent winner. And it requires no spark of creativity or original thought from you. Pull it out, unleash it, and collect the money.

It is, indeed, a one size fits all strategy.

How much more in detail do I need to go to test the limits of credibility? Gullibility?

For you, dear reader, not another millimeter. And yet there are would-be traders out there in search of this kind of silver bullet - throwing money away at something that will not reward them. Example:

A Whopper of a Letter

I must share this surprising email I received the other day (name changed to protect identity):

From: JOHN C.
Sent: Friday, August 22, 2008 8:38 PM
To: david@trade-ideas.com
Subject: Nrrd help on TI

David,

I am a subscriber of TI. Username is xXxX.

My question is what is the best strategy for day trading?

Also, How do you setup to dedect ADX>40? as this question was asked by bkk.

I interested to hear your answer to bkk.

Thanks, John.


Here is my reply. One that would allow me to sleep at night:



-- On Fri, 8/22/08, David M. Aferiat wrote:
From: David M. Aferiat david@trade-ideas.com
Subject: RE: Nrrd help on TI
To: JOHN C.
Date: Friday, August 22, 2008, 11:06 PM

Dear John,

Your question on what’s the best day trading strategy is such an open ended question that it’s impossible to honestly answer. Suppose I said, sure John – it’s this strategy: XYZ.

How could I know it was the right strategy for you and your style?

Maybe it does or doesn’t make money the way you feel comfortable doing it (i.e., too much risk, etc.) Besides if it were the best strategy, wouldn’t everyone else be using it? Why would you assume that only one strategy is the best one and not the existence of several best suited to profit from several market situations.

I’m kind of surprised to get such a question.

Trade-Ideas and our event-based backtesting tool, The OddsMaker, help you discover your best strategy that’s personal to you – that represents your trading plan and all the hard-knocks and education that went into it. The best aspect of our tools is that they allow you to ask the best QUESTIONS and receive the answers that will help you confirm or disprove any advantage you see in the markets.

Take fencing or chess or water polo or college basketball and ask yourself, what’s the best strategy in this tournament to win it all? Maybe there are several strategies to win against various opponents that have to be applied at the right time or not at all.

The better approach to winning is getting the best coach and the best training so no situation that presents itself isn’t faced without the best reaction.

Substitute coach and training for real-time scanning and event-based backtesting. Trade-Ideas’ tools will not only answer the question, What should I be trading today but the equally important one, How should I be trading it?

I apologize for the long-winded response but you touched a deep well of reasoning and passion about trading and how to help others trade. It’s not by just giving the person the fish, but teaching them how to ask better questions about fish and ultimately provide the means of letting them answer their own questions about
fishing.

Visit our blog to start on your path of finding your own strategy that, when backtested, provides you with edge. Read our posts under the category of ‘Strategy Sessions’ and read the people we put on our blogroll. There’s a wealth of information there.

Currently we do not have a ADX indicator in our inventory – but it’s on our
list.

Best regards,

David


Is There a Pill I Can Take to Start Trading Better?

Some people wander the desert looking for external fixes (a lamp, an oasis, a pill, an order from somebody) to change their situation. It doesn't exist or rather it doesn't come that easy.

Good news however: The path to riches is inside you - no need to look too far. Getting at those riches means alot of work and training - more than just rubbing yourself for the genie. The genie comes out when you've learned how to read market signals, maintain an evolving trading plan, control your reactions and emotional responses, and applied cutting edge technology to leverage your size and capabilities into profitable trades. Want a sherpa to take along with you? I'd start with the insightful works of the 3 wise men: John Forman, TraderMike, and Dr. Brett Steenbarger.

Note: Don't go rubbing them either.

Good luck!

1 comment:

John Forman said...

Hi Dave,

Thanks for kind words. As for rubbing, I won't speak for Trader Mike and Dr. S, but to my mind certain types by the right person can do wonders. :-)

John