There is a very big industry which sells trading “systems”, software, DVDs, etc. and their claim is all you have to do is to follow their ingenuous, “computer back-tested”, “magical” systems and you will see spectacular results and wealth. And it will be so easy, just follow their simple “recipe”. No mixing required. Just push a computer button. And you always wonder, if it’s so easy, brilliant, incredible, why are they spending all that time and money to hawk their products. Why not just use it themselves.
As a young, totally incompetent floor trader, I was approached by a guy who used to trade on the floor with me. I hadn’t seen him in a while, and it turns out his new venture was selling some magical system based on Welles Wilder’s ADX indicator, with minus and plus DI. And it was “only” $1500 – in 1990’s $s mind you. It sounded brilliant and unbeatable, easy road to riches. I considered buying it, as it sounded so good, that would be the key to turning things around for me. Because we all know the road to success in trading is in just having a magical system, fundamental formula or technical indicator. So I then asked one of the experienced veterans about it. He told me DO NOT buy that POS, literally his words, I remember it well. He told me that if these systems are so great and simple, why are they always sold by clowns who had never traded or by ones who used to trade.
Yes a pretty good system is required. One which you feel very comfortable using. One which you yourself have back-tested, maybe on a computer first, but you then have to trade that thing in real-time, lose the money testing it, because that is the only way in which you can first learn if it will even work for you. And then learn all the nuances, adjust it, hone it, work up the probabilities for it, and finally begin to truly believe in it, so that you can follow it confidently. With my own system, I talk about it all the time. But there is nobody but myself who will ever be able to be truly comfortable and confident with it. Why? Because of all of the time, the struggle, the losing, the honing, and then the believing in it. It took years to work thru. But just the fact that you know this needs to be done, and you now have a headstart with the things which I have shared, and in now knowing things which truly work in markets, your time overall should be cut down immensely – MAYBE. Because it depends how hard you work, how consistent you stay in that work, what your attitude towards all of this is, how much you are willing to struggle – how much you want it.
I am starting to see some of our subscribers really start to get this, and they are starting to do good things in markets, they are really working at this – studying, studying, studying, researching, observing, stepping back, working on their TRADE SETUPS. Now it is honing time for them. And if they continue to understand that all of the struggle, that alone is what will set them apart, almost nobody does that, then the results will continue to improve over time.
You want to be a true contrarian in markets, first forget the stupid idea about “contrarian investing philosophy”. Because until you get all of this other stuff taken care of, no philosophy will work. The most contrarian philosophy in markets – HARD WORK.
The “live” version of the classic from Survivor from Solid Gold, yep Solid Gold: