System Trading

I sat down yesterday to ruminate over the fact that I have done okay for the year. It is clear to me that the success is due to the fact that the systems that I use to trade are very simple. The strategies are so simple that even somebody as intellectually challenged as me can understand and use it. The other factor that has helped me is the fact that the buy and sell decisions are based on just one or two variables and therefore easily identifiable without having to rely on intricate calculations. The infinite variables effecting the market has been reduced by my system to just two variables and one rule for BUY and SELL. I therefore do not have to take into consideration what RBI might say next week of what the G-7 will do or what the valuations are looking like. I only have to robotically follow what the system tells me to do and that really is very easy when one is as lazy as me and do not want to work my grey cells extra hard.

If it is so easy then why does it work? Everybody should be doing just this and therefore spoil the chances of the system working in the future. The answer I think lies in human nature. First, nobody will believe that something as simple as this will suffice to make money in the markets. Second, it takes Zen like discipline to just follow this simple system and not worry about the other variables. Lastly doing a simple thing time after time and over and over again is very boring and most people are in this activity not just for the money but also for the excitement. Cut out the excitement and nobody really wants the money.

For me, the only exciting thing of the day is when I think about the note that I want to write. Once that is out of the way, it is all downhill. I continue to be short. I will cut my short positions and go flat only above 5087.