Insiding

The correct market strategy for oneself…

…is like a holy grail.

It doesn’t come for free.

Some don’t attain it at all.

Mostly, one does get to it but is not able to maintain it.

It’s great if you can arrive at your correct strategy, and keep it alive, forever.

However, that’s a huge statement.

Lots of caveats will need to be addressed before this statement can be made achievable.

What works for me is lots of hit and trial.

Levels internalize.

One gets a feel for what is disturbing (to oneself).

Internalization gets our reflexes going on auto.

“Insiding” is a term that I’ve made up signifying the struggle one goes through recognizing whatever needs to be recognized and arriving at one’s correct strategy.

This act of recognition comes from taking hits, year after year, till one is street-ready to handle whatever the street can offer at its worst.

Market action is mostly about making mistakes.

One keeps these small.

Whatever you end up doing right for yourself, …

…, yeah, that’s what you’re scaling up.

Out of ten attempted ideas, one might work.

Out of a hundred, three might work exponentially.

These are the ones.

Stick to these.

Scale them up.

Whatever it has cost you to arrive at them, is mere tuition fees.

Yes, that’s how you’ll need to see things, to remain sane.

Be happy – at least you have something concrete in your hands – a strategy that works – that’s huge.

The moment you see it turning incorrect, leading to market mistakes, just tweak, tweak tweak till the strategy starts working again.

Tweaking will go on as long as markets exist.

What’s a market mistake?

A market mistake is anything that makes you lose money consistently.

A correct strategy is something that yields money consistently.

That’s why one needs to keep things small till major mistakes are out of the way.

Make mistakes, sure, they are bread and butter.

Just don’t repeat them.

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Using Auto-Manual Mix Towards Peace of Mind

Create…

… an asset.

Move on.

Create…

… next asset.

Move on.

Loop to the nth and decide what your magic n is.

Retire.

Ha!

Formula for financial independence in 22 words?

You decide.

How?

By treading the path.

The act of creation is manual.

One can use many tools while putting the asset together manually. That’s absolutely fine.

Let the asset loose.

From this point on, it’s on auto.

It’ll remain on auto, hopefully, till its logical conclusion is reached.

If the asset misbehaves in between, it will attract your attention.

If your attention is attracted beyond your critical mass, you will stop what you’re doing and attend to the asset.

You will either tweak and repair and let it loose once more.

If the asset is beyond repair, you will terminate it, i.e. sell it off, even at a loss. After all, it is misbehaving. You don’t wish to hold something that bothers you.

Peace of mind is the most valuable asset in your portfolio.

Going Beyond Price Action

Is price action the holy grail?

You’ve rid yourself of all indicators in search of something that holds.

In forex, you’re probably not looking at volume either.

What you’re left looking at is the behaviour of price.

Price patterns, expressed in the form of candles, contain a psychology.

You are trying to understand this psychology in order to put on a winning trade.

However, everyone else is also watching the same patterns too, including the big boys.

Who are the big boys?

Institutions, banks et al.

Why are we talking about them?

They are the one’s capable of creating enough buying or selling pressure to determine the direction of price. Retail people, like you and I, are not.

That’s why.

And these same big boys know the patterns that you are looking out for, and are going to react to.

What do they do?

They tweak the patterns.

Think about it.

It’s the obvious thing to do. Stopping the public out will give them a smooth run later.

Is tweaking the patterns a biggie for them?

No.

Determining the direction of price is like winning a war.

What’s it going to take to win a small battle, like tweaking a pattern?

A fraction of one’s resources.

Where does that leave you?

If you’re looking at pure price action, you probably might not fare too well.

You have no choice but to look beyond.

What is beyond?

Truth is truth.

If the market wants to go somewhere, because of actual demand and supply dynamics, well, then it wants to go there.

It will reveal that with price action.

You won’t miss the message.

How can one overlook a very large-tailed candle, or an obvious support or resistance, for example?

As you are getting ready to act, based upon the obvious pattern you are seeing, you also observe, that most of the time, price is not behaving like the pattern is saying.

If the pattern is just too obvious, you need to go one step further and put on the trade, taking tweaked conditions into account.

Look at the chart for obvious points that the big boys might be targeting. Go beyond these points and set the levels for your entry, stop, and if it’s part of your strategy, your limit.

What have you basically done?

You have believed in the obvious price action that you have seen.

You have tried to factor in tweaking.

You have implemented your trade in a manner such that the negative effect of tweaking will just about give you entry, but the big boys will probably not be too bothered about going right up to the level of your stop, because its positioning is such.

This will fail.

Sometimes.

This will succeed…

…at other times.

Whether you make money or not will depend upon how you manage your winners.