Hi Nick,
Thanks for the update.
I would NOT, however, ‘beat yourself up’ TOO much about STILL being short Gold right now i.e. if the VS can keep you in that trade just a little while longer I think you MAY see some good profit i.e. Oil is pulling Gold up with it at the moment and for what my opinion is worth I just can’t see how the price of Oil at over $114 per barrel is sustainable for much longer at least not without a correction. WHEN that happens I figure that if the VS has managed to keep you in that trade then it’s proved itself.
I am tracking several instruments with the VS at the moment but still no entries.
One VERY important thing that I’ve noticed (and although it’s contradicting ‘the old man’ I feel it definitely has merit) (I noticed this on the four hour charts when I was using them and tracking some VS trades):
In the book he says to go short or long at MARKET if the price has closed above or below the VS SAR. I don’t agree with this. I would RATHER place a stop order to go short or long at this point (‘a couple of ticks above the high or the low of the signal bar’). The reason I say this is because twice (on the four hour charts) I noted that a price closed above or below the VS SAR but the very next period turned and went straight back through the VS SAR and closed on the opposite side of the VS SAR. All this means is that had you gone short or long at market you would have had to stop and reverse on the very next candlestick or bar at a loss (obviously). Because the VS ‘accommodates’ such wide ranges and should result in loads of pips over time the few pips that you MAY lose by placing stop orders as opposed to going long or short immediately at market are well worth the cost of the ‘added insurance’ as it were in my opinion.
I currently have four open RT System trades open and so far so good. To be honest I’m not using the ‘BOS’ labelling system either i.e. I’m waiting for the price penetrate either S1 or B1 and in some cases even HBOP or LBOP and then placing stop orders so that if the price goes back through one of these points then I’m in the trade (pretty much the same thing as one would do with pivot points). I’m still using the opposite S1 or B1 as my target and adjusting this up or down every day. I’ll see how it goes.
Having said all of that I’m about to make yet another one of my ‘startling revelations’ to self and everyone else (see below) i.e. I’m pretty much using the RT System to ‘make up’ for my ‘mess’ of yesterday!!!
NOW!!!
I cannot actually believe that after all this time I’m having to post another post of this nature!!!
Yesterday I got absolutely SLAUGHTERED with the SI System!!!
I’ll let you all ‘digest’ that statement for a while!!!
Now here is the thing:
I was given TISAR signals the night before on three positions and I placed the orders as I have been doing night after night for months now. Yesterday during the course of the day all three of these TISAR orders were executed at losses that took me from +30% for the month down to practically 0%. As you all know I was REALLY ‘pised’ about this (see my previous post about this). Now up until this point, strange as it may sound and ASIDE from me being 'pised’ about what had happened, things were ‘still on track’.
NOW for the ‘good’ part:
I was watching Oil yesterday and I ‘figured’ that ‘there is no way that this can continue going up and up forever’ and it just so happened that the three positions that I’d just stopped and reversed were GBP/CAD, AUD/JPY, and Gold. SO: I got the ‘proverbial thinking cap on’ and started saying to myself (and my business partner): ‘I know what’s going to happen. Oil is going to tank and all this means is that the positions that I’ve just stopped and reversed are going to reverse direction AGAIN resulting in further losses’. Also: by this time I realised, EVEN ALTHOUGH I WAS SO SURE that I had not strayed from my money managment rules, I had too many positions open i.e. I had not exceeded my maximum margin percentage used on a single trade BUT I had far too many different positions open i.e. was using too high a percentage of my total capital to trade with to be within the bounds of my money management rules. Now the strange thing about this is that I did not notice this until my free margin percentage started dropping to an ‘uncomfortable’ level EVEN ALTHOUGH I WAS CONVINCED that I had not broken my money management rules!!! So what did I do: the moment any of the positions that I had just stopped and reversed turned into a profit I closed the positions. The end result: today I’m STILL down to 0% gain AND every single one of those positions that I’d stopped and reversed continued on down to the point where every single one of them (would have) covered the loss realised on the stop and reverse AND made a profit.
NOW:
The reason I’m telling you all of this:
ONCE AGAIN I allowed ‘the human factor’ to ‘come into play’ which I have NOT done up until yesterday for at least two months. The sad part about it is that I allowed this to happen without actually realising that it was happening. WHY was I ALL OF A SUDDEN watching what Oil was doing??? For what reason??? Same thing with my money management. I THOUGHT and was CONVINCED that everything was being done ‘by my book’ but, without realising it, I had actually started ‘pushing the envelope’ and saying to myself: ‘Well everything you’ve done for the last two or three months has turned to gold so why not JUST add another position here or JUST add another position there’!!! WITHOUT EVEN REALISING IT and being ABSOLUTELY CONVINCED that I was still following my own rules it turns out that somewhere in the past day or two I had allowed some old ‘demons’ to return. Because I was not doing so well I also found that the tendency to ‘hold on’ to large profits became OVERWHELMING. What ABSOLUTELY KILLS ME is that I EVEN POSTED about this yesterday being ABSOLUTELY CONVINCED that I was following the system ‘to the letter’!!!
THIS ladies and gentleman and boys and girls is the NUMBER ONE REASON that we fail in this business: ‘the human factor’!!!
While I now find myself having ‘egg on my face’ AGAIN and having to apologize to my business partner at least I am not past the point of recovery and just have to ‘start the month over’ from today!!!
NOW the point of all of this:
The Swing Index System MUST be followed BLINDLY and MECHANICALLY and each trade must be seen ‘in isolation’ of everything else.
‘The human factor’ can play NO part in this business. I am ABSOLUTELY ASTOUNDED that after all this time I based trading decisions on what I ‘thought’ may happen. As a matter of fact I’m even starting to form the opinion that the sooner you absolutely LOATHE this business and treat it as nothing more than a ‘means to an end’ the sooner that end will be reached.
The more profit you make the harder it is to realise a loss. Once you’re doing well it is easy to ‘covet’ your profit without you actually realising that this is what you’re doing i.e. you tend to try to ‘hold on’ to that profit at all costs not realising that by doing this you’re actually setting yourself up for a fall.
Had it not been for the fact that I had at least following part of my money management rules the content of this post would definitely have been FAR more sombre in nature I can assure you.
And again: NEVER GIVE UP!!!