I recently saw the movie: Tinker, Tailor, Soldier, Spy and it brought back memories of the Cold War. The USSR was a master of misinformation and was able to hide its impending collapse from the western powers, including the CIA.
There is a lot of misinformation surrounding learning to trade. I love the saying by Mark twain:
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”
Trading should be simple. It's not that complicated. You either trade with the trend or fade the trend. The idea is to be able to identify where you are and therefore understand the risk.
If you enter a trade at the beginning of a trend then you have a lower risk than if you were late in identifying or late in pulling the trigger. New traders look for certainty and by the time you are "certain" the opportunity is gone.
Today's chart is the DAX as U.S. RTH opened. A new trend started: the EMAs opened up and turned down and the orderflow turned down. There was the first pullback where I had a quick trade and exited a third. Then on the pullback, I resold what I had covered and rode it down to 6749ish after it had made a higher low. Yes, I covered some on the way there but that's my style. The whole thing took about 18 minutes and resulted in more than 600 Euros a contract. It was simple. All it needed was the discipline, which is not easy.
Just want to share an email from a blog follower who looks like he has made it:
Just finished my first day of live trading after 5 1/2 months of sim trading. Positive 5 handles I have been doing 10 in sim for the last week or two. I just got a taste of the emotional part, trade mechanics were pretty solid.Thank you for all of your help
Guys, people are making a business out of trading every day. The guy that wrote the email deserves a lot of respect for the work he put in. He made a plan and executed and is now reaping the rewards. Good on ya' mate.
I get a few of these a month from both just readers of the blog who I have chatted with through emails as well as students who I have mentored. Yes, sadly not everyone makes it but the prerequisite to success is a structured plan and then a dedicated and disciplined execution.