Trading with FLAW system

[bunny]

Hi Guys,

We all have been wrong with our analysis at some point of time, and correct at other times. It is difficult to be always right. And I am finding it difficult to to be correct even upto a moderate proportion.

More often than not, I have been grossly incorrect in taking my positions, often buying the top and selling the bottom. I have blown up my "experimental" account(which was small in size) in the past, and it is obvious that if it continues the same way, the replenished account, which is of bigger size, will also meet the same fate.

My trading view journal(VSA) is already running in this forum, and my experience so far has been 10 correct to 90 wrong. I don't know how much time and effort I will need to spend in order to reverse that ratio. However, if I had bought when I was bearish and sold when bullish, I would have made good money. Keeping this in mind, I will posting my ideas to see if it works atleast this way.

• My trades will be against my own opinion. I hope you understand what its about. So whenever I say long, I am bearish, and when I am short, I am bullish. So we will be skating on very thin ice!
• Remember that I can be correct(in my analysis) 10-15% of the times too.

1. Failure is the first step to success.
2. Put your mouth where lies money.
3. It is better to be an trader and make money, than be an analyst and not make one.

If my skill does not let me capitalize adequately , lets try the same with my flaws!

 

[bunny]

Excel sheet:
Publicly viewable excel spreadsheet for easy viewing of records.

 

[bunny]

The logic of this system

Merely saying that "I should have bought when I sold and vice-versa" is not sufficient as a "trading system". The logic behind this system is that:

Weakness and strength, both are not as short lived as a day. The market will not go down at the first instance of weakness. Neither will it go up at the first sight of strength. It will take days of weakness and strength for the market to move in that direction.

The probability of picking the top and bottom correctly is so low that you can go long when you "feel" the price has topped out and vice-versa.

The market may be weak, but it can still be marked up, similarly for a strong market. Instead of getting in early and crushed by supposedly manipulation that drives the price against out position, let us benefit from the supposed manipulation.

 

[bunny]

Reserved post 3.

 

[bunny]

Updated excel sheet for today NIFTY FUTURES 02 Mach 2010.

 

[chaitanyagoa]

Updated excel sheet for today NIFTY FUTURES 02 Mach 2010.

How Interesting?

LoL, sounds very exciting.... keep keep an eye on the system......

All the Best Bunny....:thumb:

 

[trader.trends]

Bunny

Your system is a perfectly valid experiment. When we lose consistently which is what most of us do, we wonder at the end of the day, "Why didn't I do the opposite of what I did?". If I had shorted instead of going long I would have been richer by 3K rather than poorer by it"

But the decision to do something is so strong that we cannot do the opposite of that easily. And when you have to put money on the decision it becomes even more tougher. The person who consistently makes money and the person who consistently loses money have both one thing in common. Consistency. That is an asset that needs to be exploited. If you feel that you reading of the market using VSA has been consistently wrong, then you should trade the opposite of that. But knowing that you have to trade opposite of what you think is right is difficult and it may even color the way you start viewing VSA.

Instead continue to trade the way you have been using VSA. Unless you actually put on a trade as per VSA, even if it is one share, you may not interpret VSA like you were doing before. Committing money makes you committed to the system. Use your friend/partner or a hired hand to trade exactly the opposite of you. His volumes should be more than double your volume. IF you are buying 10 shares as per VSA he should short 40 shares as per anti-VSA. It can be an experiment with small amount of money. If you are trading high volume shares, there may not be slippages and both may be able to trade at the same rate.

If you are consistently wrong in interpreting VSA, your partner would have made more money to cover your losses too. If you make more money, then you know your interpretation of VSA was right but had run into rough weather for a while.

Just a few thoughts I wanted to share.

 

[bunny]

But knowing that you have to trade opposite of what you think is right is difficult and it may even color the way you start viewing VSA.

Hi TT,

You are right. Even I am apprehensive about it knowing that I will be trading in the opposite direction. But I think the apprehension will be subdued in real-time because you are already blind to the further direction, unlike historical charts.

 

[Mangafreakz]

Hey, this will be certainly very interesting strategy.
I saw your Nifty excel sheet , any particular reason , you chose the HOD as your entry price ?
Thanks

 

[bunny]

Hey, this will be certainly very interesting strategy.
I saw your Nifty excel sheet , any particular reason , you chose the HOD as your entry price ?
Thanks

Hi Manga Freakz,

I suppose HOD means High of Day. It is co-incidental here that the HOD also happens to be the "last traded price". Since the entry has been made after trading hours, we will use that price.