What is your goal

What is your goal in trading. Basically you have a simple choice: to make money or search for market meaning or higher truth also called holy grail. To make money in the stock market there are many ways . As long as you make money it does not matter whether you follow value or growth or quanti or technical analysis approach. As long as you are not doing something illegal which will jeopardies you profits it is ok to use any esoteric method. .

If you are looking to make money, there are hundreds of ways to do it. Most of them are in public domain.It might take you some time to understand and execute them, but that is tactical problem. You may have sub optimal profitability till you get it, but there is no great rocket science to it. The process involved is simple rule making.

Now if you are the second type looking for holy grail, there is long and interesting road ahead of you. You are looking for perfection. The perfect indicator. The perfect model. The perfect source of earnings data. You want 0 second latency in your data transmission. You want the rest of market participants to perfectly act according to your hypothesis. You want perfect level of valuation or pullback. You want perfect psychological state to trade.

You are likely to be one of those who emails me 64 point clarification questionnaire on earnings strategy, or wants to know exactly how many cents above or below one should enter on Episodic Pivot candidates. Or you are on to 34th, improvised version of Double Trouble. Or want to run endless back tests. You can keep doing that.There is an entire industry which caters to people like you. There are newsletters,softwares, training courses, mentoring services, psychologists, con artists and hundreds of other ways to keep you busy. While you keep searching for that elusive perfection,the market has been rallying since 2002. There were hundreds of opportunities to make money with imperfect rules and broad guidelines.

Find a approach that works like the Investors Business Daily or Boucher or Buffet. Adopt it to your style.Do not worry so much about whether you can yourself come with original idea. After few years you will find your own original ideas.The holy grail in trading is imperfect and simple things work: if you want to make money.


Anonymous said...

You are right, i been trying so many methods to trade and after a while, i find myself going in a circle from where i began. Sometimes the simple system like EP or IBD 200 ,wait for a technical entry and following the stock daily and watch a trailing stop... just simple and something that i understand is what i need, dont have to get a expensive trading system or paying 1500 for zacks breakout system, just 1.25 for thursday IBD does it and 30.00 monthly for telechart and set up according to your settings and daily reading of this blog. I even paper trade at www.stockalicious.com as goodlatin77373 to test the strategies and they work...at least for me and my pocket and thats what matter and it up to others to stop searching for a Holy Grail when it doesnt exit, just in your mind and no matter what you use,the strategy can not make the trades for you, thats your job...just take action, paper trade and test for yourself, then take action and use your money and watch your portfolio, if not, you are going to spend the rest your life for a Holy Grail and never find it, because theres none...Thanks for your insight Pradeep

Nashasa said...

Personally, I think paper trading is not the right way of testing any strategy. Emotions, fear, greed etc, that plays a major part in trading, only gets involved when your hard earned real money is on line. Secondly, paper trading assumes that your order will get completely filled at whatever price you put but in real life that might not be always the case.

I think playing with real money, although small amounts, is the real test of any strategy.

Anonymous said...

Again, thats what worked for me when i started, and im making real money, you do what is more natural and understand and easier for you, ;P