That day, EVERYTHING CHANGED. I find it hard to admit, but I was one of those who desperately sought the secret formula for success, and I was waiting for LUCK, that miraculous technical indicator that could somehow encapsulate all the beauty of the dreamed profitability.
Like every morning, true to the discipline of being punctual in front of my screen (9:30 a.m. New York time), I was drawing plans, lines, and rectangles on the multiple charts of the American market, just to feel satisfied in my need for control over something I barely knew (a commercial pilot without a runway and without a plane).
That time it was Tesla (later, Bitcoin would be my final blow). A vibrant green candle welcomed the market in the 5-minute time frame, and my heart raced, trying to decipher the enigma of the next candle.
Another robust green candle threw a wick that almost touched the previous close. I was convinced that the movement would continue upward. That great start seemed to confirm that, indeed, many times the price keeps rising.
But I didn't understand why, after such a positive expectation, the price could turn against me. It was like playing heads or tails from childhood, only now the cost was real and painful.
I remember that the girl I liked in college, who studied statistics, used to say: 'The more data, the better.'
I didn't understand why she insisted so much on that phrase, but that day I treasured it. How many times had I seen that candle pattern only for the price to fall? I didn't know. I had never counted it. I know that many times I bet on continuity... and lost. When I did the opposite, I also lost.
The problem then was not my luck or my memory; it was a problem of data, of samples, and of quantities: the more data the better, the more it is tested, the more reliable a strategy becomes.
I realized that it was a matter of trial and time. I wanted the coin to always land heads, but when I expected it, it came up tails. That’s how the market is.
That time was different. I showed my recently successful trade to someone who used to disdain my ignorance. And I learned with her that it was okay to understand that I didn't know everything, that everything I knew was nothing, as that old philosopher they taught in high school used to say.
Because I wanted everything quickly, to see immediate positive results without going through the trenches of learning that she had gone through.
Wanting to rush time only leads to losing money, to losing everything. And there I understood something valuable: I still don't know everything, but I do know something important...
Most of those who start trading give up too soon. Either they lose everything, or they get tired of not knowing where to go. It's the absolute lack of direction, of certainty about what really works.
And this is the point, what WORKS has nothing to do with predictions based on memory, beliefs about what will happen with a certain asset, intuition about a certain outcome.
My self-proclaimed mentor looked at my chart and told me what I later understood deeply: "It doesn't matter if you won this time. Winning only tells you that a strategy may work, but... do you know why? Do you know why the market does what it does and, above all, what to do when it does?"
I started backward, like almost everyone. I applied strategies seen on YouTube, without knowing the data behind them, without understanding the rules, without knowing when yes and when no.
BUT ALL THOSE WHO HAVE LEFT BECAUSE THEY LOST EVERYTHING or GOT TIRED SOON WILL NEVER DISCOVER THE WHYS that lie behind the OPERATIONS, OF THE SYSTEMS THAT WORKED BECAUSE THEY WERE TESTED over and over TO SEE IF THEY WORKED or not.
WHAT CHANGED?
There is no fundamental difference between a successful trader, you, or me, except one: the unbreakable determination to discover, test, study, and build from a simple idea. Testing rules, turning them into a clear system, and sticking to them.
You will often realize that the successful trader is not smarter than you, does not have more guts, or a magic recipe; they stayed long enough to test that idea, that strategy, to improve it and not just build one system but several that adapted to them, to their style, to their vision, or found a strategy that they made their own by shaping it to the market's blows.
This is my story, another story, but maybe it will help you not to fall. To keep searching, trying, but now with a clearer direction.
Maybe you are one of those traders who rely more on intuition and do well, but the question is:
Does that intuition have numbers behind it? Do you know how many times it is right and how many times it is wrong? Because if so, you're playing on the right side of history: the side where, sooner or later, you will see green numbers in your account.
Did you know that even in football they know how many times the ball will land inside the goal and how many times outside? And your favorite player uses that when scoring a goal.
"The real advantage arises when your strategy has been tested over and over again over time." Van K. Tharp
And if you know how many times you will lose and how many times you will win with your strategy, then all that is left is to survive until the market gives you reason, as Brandt would say.
It’s reading time.
ILB