Quote from Specterx:
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.
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.
