I can almost hear the tears from all of those losing retail traders, staring at their charts in horror and disbelief, and the Spoos rips higher still today.
“But … but … it can’t go higher! Because the ‘stock market’ was … well … high!”
But that is just their apophenia talking. The same apophenia that leads them to color their charts with pretty tools, all to confirm a pre-existing bias.
We’re still bullish on equities. Just as we have been since February. We’re still bullish on the QQQ’s, and the Spiders.
But let’s not only broadcast my wins in order to pat myself on the back. I got kicked in the teeth earlier today with the FX side of the book. Up about 10% since October, and earlier I gave 2.588% of that back, with one trade. I was thinking what I would do to avoid the loss, is to change my process a little bit and …
That would be what I call “Method Hunting“. It’s a common trap of failing traders, and it’s why I think 99.9% of the traders who lose in the long run; lose. When they have a loss, they try to change the process to avoid what is unavoidable. Namely, a losing trade. But by trying to ‘tweek’ the process, they destroy any edge they may have had. So personally, I will continue with the same process I have used here, because over longer time-frames it has a mathematical risk advantage …