A reader named nikesh posted a comment to yesterday’s Improving the Win Rate of Trend System With Oscillators entry. It brings up some things about my own approach to trading and the markets that I think could do with a bit of clarification.
i don’t want to do any effort to spill out your trading system public; but it seems that you don’t follow any MA, donchian channel sort of things (buying the strength and selling the weak), oscillitors or any thing which is so called a technical analysis. And I am almost sure that you are not trading on fundamental basis…
When you answer all these questions it seems that you have a system which is above all other things and other technical/ fundamental analysis seems a child’s game for you…
I said that i don’t want to do any effort … but still can you please give the readers some clue what exactly a successful trader like you is doing the market and making a good amount of money??????
First of all, I would refer nikesh to Can a Shared Trading Edge Still be Profitable?, which I posted the other day. That addresses my feeling on the “spill out your trading system” subject.
Don’t equate my writing to my trading
As for my not using technical analysis or fundamental analysis, nikesh has drawn an erroneous conclusion from what he’s read of my writings. When I write on this blog and otherwise discuss market analysis methods, styles of trading,Â etc. I intentionally try to take a neutral stance. I have things which work for me. They may or may not work for others. At the same time, things which work for others don’t particularly suit me. Unlike some commentators, I do not belittle methods I don’t particularly find useful because I realize that there is no one right way to trade or methodology to employ. I try to provide readers with the information they need to make decisions for themselves.
The reason technical and fundamental analysis may seem like “a child’s game” to me is because I’ve been at this for more than 20 years. I couldn’t even guess how much system research and testing I have put in over the years. I’ve done more analysis and trade strategizing – either for my own part or on behalf of readers of the professional products on which I’ve worked – than I care to think about. I’ve read loads of books and articles – some good, some not so much. In other words, through educating myself and application of what I’ve learned I have accumulated a lot of knowledge and experience. On top of that, teaching others creates a whole new level of awareness you can’t get in other ways.Â And I don’t plan on stopping any of that any time soon.
What I use in my trading
I most definitely use technical analysis in my trading. In some cases I also use fundamentals as well (primarily in my stock trading). One of the methodologies I like to employ, especially in shorter-term trading, can be found in the Following the Quest for Value course I put together a while back. From a technical analysis perspective I could be put in the “price action” category in as much as I do not use indicators. I do keep an eye on volatility readings such as the width of the Bollinger Bands and Average True Range, but I do not use either specifically in my trading to pick trade points or stops or anything like that.