Hurry up and fail (quickly) is, according to google, a well-known quote—I can’t remember where I first read it. However, the principle behind it sits well with learning to trade.
We must understand how the market works (for whatever instrument we trade) to the point that we can develop an independent strategy. It may not be a revolutionary trading method as most things have been tried, including trading via astrological patterns!
But within a trading system, how we do things have to be of our design. Tried, tested and failed—and started again. Over and over for what might seem a lifetime, which might be, or it might seem like it has been but in reality, is only a few years. If we think we can do this in a few months, then the likelihood is that we are still in the fail phase and haven’t realised it yet.
I think that to go through the fail quickly phase on one’s own is significantly more difficult. Probably why the vast majority don’t bother and buy a strategy instead, unfortunately, those that do so are, even those that win initially, still failing.
My thanks to James and Nick. James, for the daily technical analysis that far exceeds anyone else that I’ve witnessed. And Nick, for his mathematical and now, it seems, a coding genius in developing his non-lag indicators that work.
As a trader, I use James’ analysis to find value and breakout entries. Nick’s indicator confirms the validity of the trade, assists in its justification and, importantly, provides a probability objective.
From one of our trades this week the diagram below show’s James’ drawing of what we refer to as the confluence of the anchor and contextual lines. (In some instances, we may employ the micro and macro lines too). A value entry usually involves the anchor and contextual cues with the trend (or the appropriate ‘always in’ direction) associated with our timeframe.
The skill above is that most of the lines were drawn before many of the bars materialised. We also trade breakouts from the micro or anchor. And with the same directional stipulations as mentioned for the value trade.
The diagram below is Nick’s probability indicator which we use to assist with the entry and ascertain that we have a reasonable, 60% or 70% probability, reward/risk objective— taken from the prior 5,000 or so bars of the timeframe traded.
Value/breakout is an approach we have failed many times. But we have also had much success. It is one that makes the most sense to us and one we will continue to improve through intensive backtesting and analysis of our live trades.