How you can Fail at Many Things but still Have an Edge
Analysing the past I found that I switched trading systems way too often, so that I never really had the sense of having a real edge. I was always discontent with the results, that’s why I immediately moved to the next big thing. But there was a time that stood out from all of my approaches to trading. In this time, I made an astounding 150% return in 2 months daytrading only the dax with just 12% maximum drawdown. But even that was not enough for me. So I moved to the next thing. Where, again, I had no edge.
Analysing the past is key to finding out what works and what doesn’t work for you.
I approached the market in 100s of ways: forex, long term, short term, daily charts, heiken ashi, mechanical, discretionary, tapereading, scalping, trendfollowing, futures, cfd’s, chart pattern, averaging, and the list goes on.
At one point I was so frustrated that nothing worked that I read more books. It became another obsession. I read and read through many self-improvement and psychology books. But focusing only on that, my results didn’t get better. Morning meditation, affirmations all helped, ultimately they were not the 100% solution to my problem.
I kept failing and failing and for sure I have been at desperate points, I wanted to end this trading thing once and forever, I have been a gambler pressing buttons with high leverage, I have had frustrationg losses, missed opportunities, patience problems. All of it.
I have been very systematic with an algorithmic approach and very discretionary in daytrading completely out of gut. Both things didn’t end well.
So coming back to the original statement that you can fail and still have an edge. What I mean by that is you can look at all these experiences from the past. What was bringing reasonably good results and what caused major losses. By knowing it was your own behaviour you can for sure fix it. But the insights come in weird ways. For example I had to find out that an edge is not really an entry signal or exit signal, nor is it controlling my urge to trade, it is in risk management and specialisation alone.
I CAN loose 10 trades in a row and still have an edge. I CAN trade completely out of feeling, revenge or something like that. I CAN get stopped out at the low of the day and then watch the market go up 100 Points. I CAN make 100 trades or zero trades in a day. I still have an edge.
Every failure that I survived brought me a lesson. And all of these things I know are fatal to success, especially risking too much, having a strong opinion on anything or not specialising.
An edge for me is like a circle where everything for you that works is in it. It’s never perfect and you have to allow yourself all these ups -and downs but know that you’re still winning. Outside of this circle there’s nothing but endless pain and a long, miserable downwards trend, financially and in many other aspects of life. But to find this circle I needed 5 years, and still I’m not perfect.
The word failing has changed. Failing is not having a loosing streak, or that my predictions aren’t right. Failing is part of my edge.