Greetings Xroads,
Thatâs an interesting observation that youâve made regarding the Setup. And in a sense, I partially agree with some of the things youâve stated. But, when you use the term Setup, Iâm assuming that you mean;(The component part of an Edge, specifying the parameters for defining a trade opportunity). And along with the Setup of course, this would include; entry, stops, targets, and R3. In essence, the Setup is the execution component of an edge. If this is what you meant in your use of the word "Setup", then I have a question for you.
My question is; Most neophytes do not possess a viable edge at the start of their trading. How then is the neophyte supposed to find a Setup that makes sense, in order to validate the efficacy of their âproposedâ edge, without at the same time, having the freedom to "make mistakes" testing the Setup parameters within that edge? Its a bit like a âCatch 22â.
In other words, how do you learn what the ârightâ Setup parameters are for you, until you experience âyour truthâ for yourself? And how do you go through the experience process, without the freedom to âmake mistakesâ, in order to learn the things that make better sense? And, as you know, the automated backtesting of a âDiscretionary Setupâ is problematic in this case. Because, as it is a discretionary method, as such, any particular trade may or may not have to be executed.
In earlier years of my trading, I was never quite able to directly use some of the âoff the shelfâ Edges created by someone else. I personally needed to first âtestâ and âfitâ the method to match my particular set of circumstances (financial, technical, personal, and otherwise). Some things just never seemed to fit because of, as you very perceptively stated; âthe incompatibility of applying human psychology to understand the market actionâ. Back then, I never really understood the absolute importance of the âright mindsetâ for trading, as I do today. But even in the chaos, I always did seem to pick up bits and pieces along the way that did âresonate with my truthâ at the time.
Whether in time, these things were eventually proven right or wrong, or good or bad, was another matter. But I would have never known this, had I not been able to find and discover truth for myself. So for me, this inevitably involved traveling down many blind alleys, and doing things that were eventually found not to âmake senseâ. And in my eyes, in the final analysis I have come to believe this:
âUp until the very day you do cross over the threshold into consistent profitability, your proverbial Cart will always be in Front of your Horse, so to speakâ.
I believe itâs a natural and essential part of the development âprocessâ. Iâm not exactly sure what you meant in your âcart before the horseâ words. And if Iâm way off base, I do apologize, but please let me know where I strayed in my understanding. I am interested in learning your thoughts on this topic, as I am a firm believer in the idea of âconstant and never ending improvementâ (Kaizen).
My particular road was long and rough, filled with extremes of both pain and pleasure. And a somewhat kinder and gentler journey continues to this day. And thankfully, in the course of "experiencing" this process, I did eventually learn where the damn horse was supposed to go!
And I believe that,â¦..in her own good way, Matcha is doing the same.
Thanks for listening, and best wishes to both you,...and to her,.....on your own personal journeys!
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