What strategy is the best strategy to use?
In a few months’ time, Javid and I will have been trading for 20 years.
The time has flown by and trading has been one of our best decisions.
However, the experience has been challenging – with plenty of obstacles along the way.
One of those was finding the best strategy to use to make money from the markets.
In search of the holy grail, we have spent time on numerous different strategies – from planetary alignments to Elliott Waves to elephant migration in Africa.
We have used tick charts, intraday charts, and sub-charts.
So what is the best strategy to use?
I remember Javid asking this question on one of our training courses back in 2001 – and was confused when the trainer just responded with a smile verging on a smirk.
It took some years to understand the meaning of that, which I want to share with you all today.
When a trader first starts out, the direction they inevitably take is to find the best indicators.
Then it is the best strategies.
Then it is the best strategies with the best indicators.
And when that process does not yield consistent results the never-ending cycle for the best strategy-indicator combo begins…
The fact is, there is no one strategy that will be a 100% consistent winner – and there is no secret indicator.
Trading needs adaptability (the “Dynamic” part of Dynamic Trader), patience, forward-thinking and mental toughness – or, as Javid and I like to refer to it, intestinal fortitude.
The entry part of trading is easy. A breakout or pullback is all that is needed to enter a trade.
- Breakout of a pivot.
- Pullback to a moving average.
But once in the trade, regardless of methodology, that the test of a trader begins.
LLY and SFM are two trades that we entered into in 2020.
It really is irrelevant which strategy was used, be it breakout or pullback, as both trades failed to perform shortly after entry.
But we knew that our strategy had a high probability set-up – that we had an “edge”.
So what was the edge?
This is often overlooked by so many traders.
The desire for immediate gratification – or the desperation to do something to the trade – is so often the downfall for many traders.
Once we are in a trade, we try to leave it to do whatever it might do (within reason).
We will axe a trade – if it is very disobedient or the facts change.
We take our time to first enter a trade.
- If using a breakout, we look for a neat trend leading up to our point of entry.
- If using a pullback we look for a neat trend, prior to the pullback, leading up to our point of entry.
We then use time to allow a trend to begin.
That is the premise of our trading strategy.
And that is why the trainer had smirked when Javid had asked the question – time is the one aspect of trading every new trader will underestimate.
Let’s go trade!