December 5, 2013
I’m writing again because I have the feeling you might really be interested in the “beginner’s mind”.
These simulation runs have taught me a ton of lessons. You can’t expect to learn the Wavy Tunnel by simply simulating trading, but if you already know the rules and you have all the information that has been given you rattling around in your head, simulating the trading this way adds so much clarity and simplification that it is absolutely amazing what it is doing for my confidence and the sculpting of my personal trading plan.
The most important part is the notes that I take during trading and immediately after. They are full of these wonderful self-corrections and recognition that I need to make more clearly defined decisions (such as, what do I do when the price closes above the Filter but gaps before I can get on board).
I’m really beginning to “feel it”. I know what questions to ask of myself as I follow the price action. Is price above the Tunnel? Is the Gold Bungee above 50%? Has price come back to the Tunnel since the Wave crossed the Tunnel? Do we have CAO divergence on this time frame? With those answers, I can trade the BO-3 with confidence.
I’m now making money…impressive paper money…consistently. Simulating trading has allowed me to:
(a) Recognize that I’m not ready to trade PW or FG and I have removed them from my trading plan until I can prove to myself that I can trade them consistently.
(b) Realize that while I should focus on the BO trades for now…I’m best on BO-3, good on BO-2, inconsistent on BO-4 and I’m currently helpless at BO-1. So, I now basically trade BO-3s in my simulations plus any obvious BO-2s. But I stay away from BO-1s and BO-4s for now as my brain hasn’t been trained as well on those.
And the reason seems obvious. I’m best at spotting the setup for BO-3! I absolutely kill the BO-3s. I’m excellent at spotting the setup and I have learned to ride them rather than cutting profits short.
That knowledge, in itself, if priceless! I know I can open a demo account (even without Harmonics) and ultimately make demo money trading BO-3s. (And if I don’t, I need to analyze my trades to see where emotions got in the way, because I’m trading them like gangbusters on the simulations.)
I know if I can gain this much confidence on the BO-3, that I can gain the same confidence on the others in time, with simulated practice.
The point is that the simulated trading has helped me see my strengths and weaknesses. I’m sure trading an hour at a time rather than in several seconds will certainly change the equation, and I’ll have a new set of notes about what needs to be improved! But simulating my trading has been an excellent way to experiment and learn what works for me.