Looking at Trading with Fresh Eyes

Fact: 99% of all trading systems use indicators and/or advocate trend-following. 99% of traders lose money or under perform the markets.

Warren Buffett is the greatest investor in the world. He became the second richest man in the world by compounding his return by 20% per year over decades. His #1 rule for investing is: Don’t lose money.

Buffett is known for his intelligence – but you never hear of him exercising it through “Tradestation gymnastics”. He doesn’t sit in front of fancy, high-powered technical analysis software, inventing new gyrations and combinations for moving averages, stochastics, ADX, etc.

Instead, Buffett simply buys assets cheaply. He exercises his intellect by playing competitive bridge games with Bill Gates.

Of course, using fundamental analysis like Warren Buffett is a full-time job, and it requires financial knowledge. Buffett and most hedge fund managers have advanced business degrees.

So, what can you do?

You have to develop a simple, robust trading system that has a new angle, instead of just relying on the same old indicators applied in the same old fashion.

You then must have the discipline and patience to stick with your system, at the risk of being bored.

You should develop / test your system until you can have faith and can count on it, like an old hunting dog.

But, then you need to be able to resist the siren-song of the next “sexy” indicator or system.

Here are some ideas to get you thinking:


1. "How May I Serve?" The Market

2. New Thoughts on Highs and Lows

3. Combining Highs/Lows and Moving Averages