For several years I worked in the technical support group of leading security price charting developers; first with Windows on WallStreet and later with TradeStation, after they acquired WOW.

I had the privilege of talking with traders – working with large accounts and with small accounts – and from all parts of the world. My job was to make them understand the functionality of our software – but not to give them advice on how to interpret into trading decisions.

It was a fun and interesting time of my working career – actually the most fun I ever had while working. I loved talking with traders of varying background in educational, interests and aspirations.

Over the years I observed traders use of technical analysis to make trading decisions, I grouped them into three categories:

1.     Those who built systems that were so complicated that even they could not actually use them properly.

2.     Those that built systems, but generally ignored them in the actual process of making trading decisions.

3.     And finally, those that had technical systems that they actually used to make trading decisions (most of the time).

Frankly I was surprised in the number of traders that fell into group 1 and group 2. I was even more surprised that each group was made up of a full spectrum of traders of account size, years of experience trading securities and education levels. I pondered the reasons for this more a long time, and the only thing that seems to explain it is human nature.

I intended to work my way into group 3 before I retired and pursued my goal of full time trader of my own account. I think that I have finally accomplished that goal – at least to a great extent. I have settled on a few good indicators that I understand and trust so I am not at all to be associated with group 1. However I still have a weak moment and fall into group 2 – but only temporarily – for a trade or two.

The problem with me seems to be that belonging to group 3 can, at times, be boring. And I get bored easily. But the fact that the trades made while in group 2 frame of mind usually do not go well gets me awakened to reality quickly. I mentally kick my ass for ignoring the fundamental rule of technical trading: I remind myself that I have a good reliable system that I trust – so I must use it – on EVERY DAMN TRADE I MAKE!

I have written a couple of books about my system – and a book on basic technical analysis. They are all available from Amazon for a very reasonable price. I even make a one day offer of one of them for free occasionally.

You can check them out on my Amazon page by clicking the following link:

https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Dstripbooks&field-keywords=Philip+c+elrod

 

 

 

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