I have tried many trading methods, but only a handful have a profit-providing edge.
It is not solely about relying on price action or chart patterns, as highlighted in the Market Wizard series.
But I agree that we generally trade what we are introduced to, not always appreciating the alternatives.
I started with a Benjamin Graham (Warren Buffett’s mentor) method. My son and I worked on value investing, as it is known, for many months. It’s something we’re still most proud of. Basically, we drew on specific fundamentals to grade companies worthy of investment. It was 2009, and it worked extremely well. However, value investing then went cold for many years.
I then took up short-duration share swing trading, followed by currency trading using chart patterns. I had my moments of success, but on reflection I didn’t establish any notable edge.
The COT (Commitments of Traders) report was my next dedication. I feel it definitely provided an edge. Back then, I learnt from Larry Williams. Trading commodities isn’t for everyone, but knowing how the weekly report worked was an advantage.
Trading the DAX and its associated bond yields was interesting, and an edge exists if we are prepared to dedicate time to understanding sentiment derived from the association between markets like the DAX and the Bund.
Trading the NASDAQ with cumulative volume delta (CVD) in futures contracts, ideally with access to true, raw-tick CVD, provides a dynamic edge. I prefer CVD over studying the DOM or Depth of Market in this market, as liquidity can be deceptive due to prolific strategic manipulation like spoofing and hidden sizing like iceberg orders.
My final suggestion, and one I currently trade every day, is low-float USA stocks with access to Level II and time and sales—collectively known as the Tape (commission-paid is my preference, but commission-free is probably better for the smaller account). Yes, I use charts for instant reference to resistance levels, such as VWAP and well-known daily moving averages. However, the edge here is almost entirely in reading the Tape together with good trade management.
