ES Journal Archive (2009 - 2010)
- Thread starter Jahajee
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I was a fighter of the market for a long time. I thought there was a zone at which price was too high and I'd short, believing that it had to retrace to a "reasonable" level. Most of the tim eit did and I did well, but every now and then I'd get in trades that were stopped out, or hold trades for days or weeks that continued to move further underwater until I had to finally bail at a large loss.
I was blinded to the reality of the price action in front of me. I was always thinking "Why do these idiots keep buying this POS?" What I should've been thinking was "Look how everyone keeps buying every little price dip and how price keeps going up and up and up. I'm gonna start buying every little price dip."
Finally early this year I had a real breakthrough moment. After testing average down strategies and trend-following strategies at great length in my sim account, I found that both worked quite well, but the average down counter-trend strategy could really wipe out a chunk of gains quickly if you weren't vigilant.
Psychologically average down is very difficult to manage because the more it runs against you and the bigger your position and growing loss, the more you think "Now it REALLY has to reverse soon, it just can't keep going."
But what I found was trend-following ALWAYS WORKED. When I say "always worked" I mean a tight stop at an invalidation point was hit only rarely and when it was the loss was very small and it takes quite a reversal of sentiment to reverse a trend, so I was glad to be out and able to re-evaluate without my overwhelming emotion and opinion running the show.
This took me to the next level almost overnight.
We are witnessing the beginning of the end.
The current financial system worldwide is no longer sustainable.
Wave,
while I really respect your calls. You are scaring me, man. Do you see your 900-840 in play during this cycle? or rather, what you're time frame for the 900-840 call?
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