How about indicators? I remember a trader long ago trying to explain his stochastic entry methodology to me. First it was based primarily on the indicator itself and not price (first warning!), and it was reliant upon my learning to recognize this squiggle of a move on the indicators lines (second warning!). Okay, I thought, he’s well intentioned, and this shouldn’t take too long. He showed me a few examples, told me it was really easy (third warning!), and off I went to try and put this to work.
I thought I had found a few good instances where the stochastic squiggled in the right way. So I clicked off a few demo trades. It didn’t work, which is to say the trade was a loser. But I know that a losing trade is not indicative of a methodology not working. Nothing wins all of the time. So I did it again, and again, and again. It still couldn’t seem to generate the entries as he had described, so consequently I would wander back over to his station only to see that he was up! All the “wrong” triggers I took were none of the ones that he took.
“What gives?” I asked. “I did it just like you told me to with this little squiggle here.”
“Oh well, you see your trigger didn’t squiggle like this . . . ,” and he proceeded to show me his squiggle triggers.
“They look the same to me,” I replied.
“No, no, no, yours crossed like this but mine crossed like this.”
This is subjectivity. I’m not saying his stochastic squiggle trigger did not work (but I will add that after the stock market boom of the late 1990s and early 2000s ended, so did his run as a daytrader), but I could not replicate it. I couldn’t see it the way he did. Darn subjectivity.
What good would it be if I showed you a bunch of strategies, and you couldn’t recognize them for yourself, by yourself? I’d be wasting both our time. Since I am both a trader and a teacher, objective tools are a must because that’s the only way I can be sure that there is a high likelihood that you will see what I am seeing! The reason so many traders lose more than they win is that most tools set them up for failure due to the fact that there are too many nuances in interpretation and the market just does not set-up the exact same way time after time.
I thought I had found a few good instances where the stochastic squiggled in the right way. So I clicked off a few demo trades. It didn’t work, which is to say the trade was a loser. But I know that a losing trade is not indicative of a methodology not working. Nothing wins all of the time. So I did it again, and again, and again. It still couldn’t seem to generate the entries as he had described, so consequently I would wander back over to his station only to see that he was up! All the “wrong” triggers I took were none of the ones that he took.
“What gives?” I asked. “I did it just like you told me to with this little squiggle here.”
“Oh well, you see your trigger didn’t squiggle like this . . . ,” and he proceeded to show me his squiggle triggers.
“They look the same to me,” I replied.
“No, no, no, yours crossed like this but mine crossed like this.”
This is subjectivity. I’m not saying his stochastic squiggle trigger did not work (but I will add that after the stock market boom of the late 1990s and early 2000s ended, so did his run as a daytrader), but I could not replicate it. I couldn’t see it the way he did. Darn subjectivity.
What good would it be if I showed you a bunch of strategies, and you couldn’t recognize them for yourself, by yourself? I’d be wasting both our time. Since I am both a trader and a teacher, objective tools are a must because that’s the only way I can be sure that there is a high likelihood that you will see what I am seeing! The reason so many traders lose more than they win is that most tools set them up for failure due to the fact that there are too many nuances in interpretation and the market just does not set-up the exact same way time after time.
