11/21/2010 Rant:

Hey, HP, I do feel for you. I can tell that you are passionate about the market. And equally frustrated by it. It seems so simple at times but even more confusing at others. At one moment you are on the mountain top when you have followed your rules and they paid. Then just as quickly you find yourself in the depths of hell because you broke every rule, repeatedly, in succession, over and over. It’s ok to feel the anger at yourself. Just turn the light on. Illuminate the darkness. Ask, What have I learned this week? The path forward is through the trial and error that produces pain, as long as you learn. I may not know what works, but I do know what does not work because I have tried and I have failed. I honestly believe that  Market Mavericks are the ones who have failed repeatedly, but rose up from the pain and learned what did not work. We choose to make the market more complex that it is. Find what works and repeat it. Over and over and over. How do I come by this? Well I found some things that do not work. And I repeated it over and over and over. So the Market being what it is, then, the reverse is also true!!! I love to look at the 2% per day as it compounds! I begin to dream about all the possibilities. It can also drive one to move too fast… thinking that if 2% is good then 4% is better. It does not work like that. Stand the Market on its head.  Shake the money from its pockets! The central idea of 2% per day is to view the market solely from Risk, not from profit. That is, you are always at Risk. Always. You may have had 200 “winners” in a row. Every entry carries the Risk of loss, Every one. So since we are at Risk, we need a way to get leverage on the Market. This is where we let the Math do the heavy lifting for us. Compounding. It will work for us, BUT is will also work against us. For this reason I have recently imposed a limit on my exposure to Risk. Two successive losses results in Market Termination for that Session. Why? Well for the reason that it means that I am not seeing what is in front of me and for some reason I have formed an opinion as to what the Market is doing that is incorrect. Opinions in the market will wipe you out. Price is the only arbiter of Market Sentiment. Price is the Judge the Jury and the Executioner. Consider also that we as “retailers” are tremendously handicapped. The Big Boys get the Fundies 2 minutes before they are published. How well will your opinion stand up to that? It’s sort of like looking at the Market as a NFL football game. Where their team, all 50 of them, show up for the game and you are the only one on your team. You are it. No one to help you. Now, yes, they are going to score, but each time they score you will get the ball afterward for your turn to try to make a touchdown. The odds against that happening are pretty high, yes, but out of 100 yards that you have to go, do you think you could move the ball by 2 inches? I think so. Sounds possible. On average $3.9 Trillion is “traded” each day in our Forex market. $3.9 Trillion. I only want to dip my Dixie Cup into that sea of money each day. Little by little, 2% by 2% I’ll fill up my pool in the backyard. Got Sun Block? Selah.

Leave a Reply

Your email address will not be published. Required fields are marked *