Survival of the Fattest
(or Evolution of the Dog)
I started trading US stocks way way back with a few thousand pounds in a Finspreads spreadbet account, and armed with a small amount of information anyone can find on the internet, I started trading. You know the sort of info to which I refer - the support and resistance areas, the basic trend lines, the double tops and bottoms, head and shoulders, you name it, I was trading it.
With this basic information I was not too successful and all too often most trades simply turned into a continuation of the trend. Well ... you can probably guess what the result was. Yep, before too long the account was down by about 70%..!!
[Scratch head, grimace, what am I doing wrong?]
I needed much more and better education, this must be the answer.
Ok, the time had come to start buying a multitude of trading books written by all the well-known heroes of the charts. I devoured book after book which, incidentally, cost me roughly the equivalent of what remained of my trading account. But eventually I came to the point of where I really know what I am doing and I could already see the error of my ways.
No problem, these books will pay for themselves in time. Once I have applied the teachings contained within then the money will start rolling in.
BANG..!! Account blown ... (Time period - about two months).
Hmmmm, a rethink was needed.
The Indicator Period...
Right - it was now time to start using indicators on my charts as I could clearly see how they could be so beneficial in spotting set ups. I also read about the indicator fetish that affects a great many many traders and also their reliance upon them.
So, not downhearted at all, I funded my account with even more of the UK legal tender than the original account with the preconceived idea (I know not from where) that these super duper, all-singing, all-dancing indicators would be the answer to all my prayers.
I have no need to worry. The indicators will look after me. . Actually, I needn't have worried because in only one month, my account was only down by about 50% so I was losing at a slower rate..!!
I cannot remember exactly but I'm sure my charts looked very much like the one above. How can anyone NOT make money from that set up?
The stochastics, RSI, Macd, CCI, the Parabolic, the Carbolic, the Alligator, the #+*&@, and a few others, they were all used at one time or another and will definitely do the business for me given time - won't they? I used every indicator known to man. Though I did draw the line at the astrological bunkum.
Indeed, it must only be a matter of time before Finspreads contact me saying that they cannot afford to have me as a client. That day is soon approaching.
BANG..!! Account blown ... (Time period - about three to four months).
Another few thousand pounds has gone to the great trading room in the sky. But am I downhearted? Not a bit of it.
So endeth the indicator fetish period. I've used the tried-and-tested chart patterns, all the indicators ever invented, and read books by the score. What the devil am I doing wrong?
I concluded that I needed more education. I needed a bigger account. I needed to know what other traders are doing in similar situations.
The Forum Period...
Ahhh ... now we are getting somewhere. Before too long I will understand how other traders are approaching this trading lark then I really will be on a roller-coaster to riches.
I have the price patterns, I have the indicators, I have all the books, and now I have the forums. Absolutely nothing can stop me now. I consoled myself with the thought that I am only taking the same journey that all other newbie traders must have taken, for sure. I put this down to being no bad thing because I can see that there is plenty of money to be made trading.
So I joined all the main trading forums and started to read them like a man possessed - I also started posting on those forums like a ... postman possessed. All my spare time was spent on those fantastic forums learning exactly one thing and one thing only.
How to lose..!!
I soon realised that they were all losing,
It didn't take me too long to come to this conclusion but in the meantime I had funded my account with an even larger sum which was dwindling fairly rapidly. But I was now a forum man.
Every minute I had spare I would be there on the forums, such as Forex Factory, learning learning learning. The trouble was that I was learning all the wrong stuff. I noticed that the same people were posting strategy after strategy after strategy. Hmmm, what happened to the last one I wonder?
The fact of the matter was - it was the blind leading the blind. None of them actually had a clue. They were the same as me and I certainly was not going to learn anything on the forums. I was simply learning how to lose, big time.
This dawned on me like a light being switched on. I stopped using those forums in the blink of an eye and deleted them all from my bookmarks. I had wasted a serious amount of time on those forums so it was now time for some serious thinking and to get my trading education(!) back on track.
But the forums had introduced to me to one entity which was forex. Though I was still trading US stocks of the DJI30. Forex would come later.
The System-Hop Period...
This next period was a costly one, the Buy-Any-System period. I bought them, traded them, and lost..!! My main hope was to learn from them as much as I possibly could if I could not make them pay.
By now I was determined not to blow this account which unfortunately was down by almost 60% - I would just have to build it back up as it may be the last. I reduced my trading drastically in trying to find the high-probability trades, reduced the stakes, and studied. And studied.
This was the turning point. Why not have my own strategy?
I stopped trading altogether except only to test my strategy with very small stakes which is the only way, with real cash, forget demo trading.
The story of putting together my own strategy is for another time but, you'll be pleased to hear, I was trading US stocks on the daily time frame (I was still working full time then) but I had almost recovered my losses. A large chunk as I recall. Only a few thousand short but the account graph was heading nicely in a north-easterly direction. I had cracked it..!!
The Dogs are Conceived...
I was now trading a forerunner of Black Dog, a very raw version but I could see the possibilities. This was when I remembered from the forums that forex is a great trading opportunity. I departed from stocks and took up trading forex like a maniac.
BANG..!! Account blown... (Time period - about nine to twelve months).
What the hell is going on? Wow - was that a shock to the system?
Trading US stocks on the daily time frame to trading forex intra-day - a totally different beast indeed. I was expecting things to be the same, but intra-day is a whole different ball-game.
Now it really was time to think, and to get this Black Dog firing on all cylinders. It was time to continue with the dumping too. I had dumped all the candle formations that didn't do an inkling of good, I had dumped all those books, dumped also were the forums, and the purchased strategies, and the guru websites, and anything else that got in the way of Black Dog.
Maybe it was me? The way I traded? The way I traded other methods? The way that I interpreted the markets and the strategy? Maybe.
One thing was for sure in that I wasn't going to give in. This trading lark wasn't going to beat me. I was beginning to see where my mistakes were being made and how to rectify them. I was beginning to see how the forex market moved. I was beginning to see how to structure my trading. I could also see that my strategy was the answer but needed lots of tweaking over the next months, or even years of trial and error.
It was going to be the Black Dog, or nothing.
The Present Time...
Thinking back, I possibly made every mistake in the book. In fact there is no 'possibly' about it. Wow, did I pay for a lot of expensive lessons? These days I like to think that a mistake is not a mistake IF you learn from it. It then becomes a lesson. Often costly but a lesson nonetheless.
I have paid handsomely for every lesson and they are ingrained so as to enable me to react to how the market moves. This can only be built up over many years of 'action' by trading the markets. The product of those years make up much of the content of the modules within our website.
But you know what? It has made me a far better trader because of all those mistakes, all those errors of judgement, all those revenge trades, etc etc etc.
And this is precisely where you come in - you can travel a similar journey, or by-pass those very costly lessons by studying the Black Dog methods that are the result of many years of evolution.
If only to prevent a lot of heartache, blood, sweat, and many tears. All the work is done for you, so much so that, boy, do I wish there was something like this when I first started?
Of course, you may still be using those fantastic chart patterns, the brilliant forums that teach you how to lose, the $97 strategies that, well .... do nothing, the myriad of indicators that do not work.
Just keep on doing the same old same old that everyone else does.
Or use a superb method that has evolved over many years of trials and tribulations.
If you have a similar story I surely would love to hear about it. Either drop me a line or post it below.
See you when the market opens....