SCOTT WELSH TRADING BLOG

No Fun at All

No Fun at All

Dec. 16, 2020

Over the years, I’ve had the pleasure of coaching many high-ranked tennis players.

And when talking with new parents or students, they would ask about how to get to the top level.

The answer was easy.

Just show up every day and play a full schedule.

Often, that’s not what they wanted to hear.

They wanted to hear some exotic training method and/or see a megalomaniacal leader screaming at kids and doling out militant punishments.

Because the truth is: showing up every day is hard.

Really hard.

Even though the idea is very simple.

Emails from traders are the same.

I get people asking me about the (hopefully!) exotic nature of my systems and/or wanting to know how to make 15% per month with no drawdowns.

Exotic, secret solutions are easy. Like winning the lottery is easy. No work for an incredible payoff.

Trading breakouts, on the other hand, is hard.

Really hard.

Take last week, for example.

Here are some trades that happened in the past few days on the GBPJPY:

Let’s break down the horror.

On the far left is a break-even trade. The fun part there was that it was nicely in profit — and it then abruptly reversed into a no-gain.

After that, you can see that a Short trade was entered when breakout criteria were met. Unfortunately, by the time the signal fired off, the GBPJPY had decided it had gone down far enough, and immediately reversed back up into a loss.

It moved up so much, in fact, that the parameters were met for a Long trade, and that trade was entered. Unfortunately, by the time the signal fired off, the GBPJPY had decided it had gone up far enough, and immediately reversed back down into another loss.

The joyous part of that was: if I had just stayed in the Short trade, I’d have no losers and would be in profit.

Instead, there were two losing trades while the GBPJPY moved happily back and forth in a channel, unable to make up its mind.

Is this fun? Of course not.

Should I change the rules? Abandon the system? Look for a new, exotic solution? Cry in the basement?

Of course not.

This strategy is very profitable in 2020 and is quite profitable in its historical testing. And the solution is simple: trade breakouts.

It’s a solution that will never go out of style.

Is it easy?

Absolutely not.

Can weeks like last week be avoided?

Nope.

The undesirable truth is that fundamentals are not easy. They’re the toughest thing in the world.

But they’re available to anyone.

Anyone can be successful.

You just have to believe that work is more fun than fun.

In our next Newsletters, we’ll look at some new systems on my new robot.

Talk to you soon.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.