I first read about this phenomenon in an Isaac Asimov piece about 30 years ago. The premise was that your subconscious continues to work on a problem even after you’ve stopped “thinking” about it. We’ve all come to accept this as more or less true and many of us have experienced these “eureka!” moments as well.
I think about trading a lot. Yes, I know it’s sad, but true. I’m almost always wrestling with some trading concept or another. You’d think that after being in the biz for 15 years I’d have all the answers already – but I don’t. In trading there’s always something that can be done better, so there’s always a problem of some sort that needs to be solved.
My biggest “eureka!” moments have almost happened by mistake. Some people play with video games. I play with charts. I remember fooling around with different ways of trailing a stop loss. I researched all types of stop trailing systems, many of them quite complex and sophisticated, but none of which yielded the results I was looking for.
I was showing off to a friend “how to trail a stop loss” when I stumbled across a very simple, yet very efficient stop loss trailing technique. I’d never heard of this system before (or since), but I use it all the time with outstanding results. This is the same system I’ve taught you, and from your feedback it seems to work as well for you as it does for me!
Another “ah-ha!” moment came recently when I was responding to a post at the forum, just trading ideas and spit-balling, when I stumbled across another beauty in relation to market momentum (which I’ve also shared with you).
The reason I mention this is that many people think that there is an end to trading. Trading, like almost everything in life, is an ongoing exercise. There is always something to be learned. Don’t feel frustrated if you don’t have all the answers. None of us do. But what we can have is a working system, something that allows us to take money out of the markets at a regular basis – and I suppose in the trading world that’s the best we can hope for.
Erich