Before I go any further, I’d like to set the record straight. I came back to trading not because I have improved on an old system that I’ve been trying to build when I first got into trading. I don’t have an old system. In fact, I don’t have a trading system, even. I came back because I want to really learn how to trade. This time, seriously. It’s back to burning the midnight oil for me. It’s a tedious process. But I must learn to live with it. If I want to actually get out of the rat race. For real.
Now please let me pick up from where I left off. Let’s try walking in my shoes. For one last time perhaps?
For the record, when I started trading, I didn’t have any system. I just bought and sold stocks that I was familiar with. I bought stocks because I’ve been seeing their ads on TV, because I’ve been hearing about them from other investors and traders. I didn’t know when to buy at or near support levels and sell at or near resistance levels then (and now). I wasn’t even aware of stocks breaking out convincingly from resistance levels. Reaching all-time highs. The works.
I was just plain ignorant and stupid, to say the least.
Then somebody pointed me in the direction of fundamental and technical analyses. I was told to buy stocks of companies with sound fundamentals. And I was also told to buy stocks whose prices are strongly dancing above support levels on pretty decent volume. Of course I turned to Google for everything, for validation. I bought hard copies of trading books. Then I was told to look for eBooks. I devoured every book on fundamental and technical analyses. But I wasn’t actually getting any further than buying on impulse, relying on rumors/tips, among others. I wasn’t improving at all.
When I was already losing much money, I became enamored with technical analysis. Like it was the last resort. I ditched fundamental analysis. For good. So when you see me on social media talking about fundamentals, perhaps I just wanted to be entertained or I’m just bored.
I developed keen interest in Moving Averages, Fibonacci Retracements, Bollinger Bands, Elliot Wave Theory, Candlesticks and Candlestick Patterns, Chart/Classic Patterns. I didn’t believe Richard Farleigh when he said: “Chartists are astrologers.” I didn’t believe Rene Rivkin either when he said: “I have never met a rich chartist.”
All I wanted was to be a chartist. A good one at that. I wanted to have an edge. But how could I have an edge? Dunno. That’s why I came back. To see if I could have an edge. And we all know there are already local chartists who have THE edge. Who have carved their own niche. Who are now making serious money because they now know how to protect their capital, to cut their losses short, to stay away from trading for a while when they find themselves ensnared in a losing streak. But of course never forgetting to stay in the game.
I also tried seeking the help of mentors. But in spite of their teachings I was still learning nothing. It’s not that they sucked; it was all because I wasn’t really paying much attention to them. All I ever wanted was to trade right away. And so I did. Until I incurred huge losses. Then I became uninspired. Undisciplined. I was overly emotional, too.
Whatever your reasons are for trading, I’m telling you now, find your own niche. Don’t be dictated upon by what you see, read or hear. If one system makes you happy because it gives you serious money in return, and you’re already comfortably numb with such system which you yourself developed, with a little help from your friends, then go for it. But don’t forget to back test it. Simple or otherwise, it doesn’t matter anymore because it’s your own system.
However, once you find your own niche, don’t rest on your laurels. It’s said over and over again that you’re only good as your last trade. Whatever good thing you started, please don’t blow it. Trading requires continuing education, refinement. Perhaps one day you’ll find the holy grail. It’s not a far-fetched idea. Or is it?
If in my comeback I don’t’ succeed as a trader, but in my advocacy I’ll be able to warn newbies to not commit the same mistakes I did, and I’ll be able to stop them from burning their money – hard-earned money – and I’ll be able to point them in the right direction, I think I’ll gladly accept that as my place under the sun.
Trading is difficult. But If you’re able to find your niche fast, you’ve chased the right dream. However –
For everyone else who’ve been chasing the wrong dreams, who are raring to get out of the rat race, this is for you.
When these foregoing premises are adequately addressed, at least I would’ve won half of my battle.
At least it would’ve been all worth it.