Has this ever happened to you? You stumble into some new pattern of trading stocks that’s so lucrative you’re lured into thinking you’ve actually found the holy grail of day trading; a system so foolproof that a trained monkey high on meth could still follow the system and turn up nothing but cash (for bananas, of course, and more meth) with every trade.
Only later do you discover that what you’ve unearthed is only a short-term lucky streak that had nothing to do with your superior trading prowess. It was just one big happy accident, the gold rush equivalent of a flash in the pan.
I confess I’m no stranger to the fool’s gold of stock trading “systems” that guarantee big returns every trade. I’ve developed probably a half-dozen such “surefire” systems over my 15 years of trading and got stiffed every time. As soon as the winds of market temperament shifted, my schemes (and that’s what they were) would collapse in utter and complete failure.
Hope Springs Eternal
I bring this up today because I’ve stumbled on yet another of those “surefire” trading formulas. That’s why I haven’t blogged lately; I’ve been scurrying about working the kinks out of this next get-rich-quick pipe dream.
Am I about to share the details of this be-all-to-end-all plan? No, not yet, anyway. And when I do, it will only be with visitors who email me asking for it. I haven’t put all the moving parts together and given it the acid test. I’m in the midst of changing online brokers as a part of the process and that takes time.
In the meantime, let me pose this question: “When is a stock trading system a “system”? Does it become a “system” when you: (1) Day trade a group of stocks in a defined pattern that generally makes money (but not every trade)? (2) When you make money EVERY trade—but only so long as the trend of the stock or the market is in your favor? (3) When you earn enough money trading to buy you and your main squeeze BMW Z4 roadsters? Or (4) When pigs not only fly, they trail a string of hundred dollar bills from their oinky little tails?
My intuition tells me the answer is something closer to Number #2. When the market is genuinely moving up, all traders think they’re Einsteins making bets with Donald’s Trump’s money; we just can’t lose. But when the market is moving against us (define that any way you want), we wind up chasing stocks into that deep, dark hole and lose so much money your teeth hurt. When that happens, trying to make money is like trying to leap across a chasm in two small jumps: skill gets you nowhere.
Well, no system is perfect, but this trading formula seems to have legs. Portions of the plan have proven foolproof (yeah, really. Guaranteed). But other steps need the test of time, and yes, shifting markets.
And speaking of those steps, I’ll be writing about some of them soon. But again, this information will only be available to those who email and ask for it. For example, you’ll discover what I found out about TD Ameritrade and how to improve your chances of trading success. In secret link, I’ll treat patience as a virtue (Make your trade, then get the hell out of town and take a holiday, like me). By New Year’s, the system will be tried and proven for what it’s worth and I’ll be in South America someplace spending my loot.
In the meantime, I leave you with these irradiating words from Alexander Pope (Essay on Man).Hope springs eternal in the human breast; Man never Is, but always To be blest: The soul, uneasy and confin’d from home, Rests and expatiates in a life to come.
God Bless Charlie, the Runaway Trader
(But puhleeze, bless me in this life. Blessings in the next life can wait.)