But one thing I’d like to do is share some great pearls of wisdom from a successful trader who has a knack for explaining the vagaries of this business perfectly. Boris Schlossberg has appeared on several trading news programs and offers weekly analysis and tutorials. I don’t necessarily use his flow system but have picked up on its nuances and recognize when in a live trade that a flow move is happening.

The reason I mention Boris relates to his weekly emails, which I find inspiring as they are among the few I’ve read that seem to perfectly encapsulate those lessons I have learned in this journey. So on occasion I’d like to share some of these passages from Boris. Below is this week’s message in it’s entirety. Good stuff:

The harder I work, the luckier I get. Samuel Goldwyn

In a recent NY Times article Jim Collins and Morton Hensen (authors of Good to Great) argue that positive luck has little sustainable edge in business but negative luck can ruin even the best laid plans. They write, “There’s an interesting asymmetry between good and bad luck. A single stroke of good luck, no matter how big, cannot by itself make a great company. But a single stroke of extremely bad luck, or an extended sequence of bad-luck events that creates a catastrophic outcome, can terminate the quest.”

The article is peppered with many interesting examples including a harrowing story about the first day of operation for Southwest Airlines. “During the takeoff run, the right thrust-reverser deployed. Only the captain’s instantaneous reaction allowed him to recover control and make a tight turn for an emergency landing on one engine.” If the pilot wasn’t skilled and lucky Southwest may not exist today.

The history of human progress and civilization is essentially a never ending attempt to assiduously remove as much luck as possible from human affairs. From irrigation, to climate control, to micro surgery to wireless communication we use science to get absolute control over our lives.Yet when it comes to trading, control is illusory at best. No other profession is so vulnerable to luck because no other profession is so dependent on interpreting the vagaries of human behaviour.

Trading in the long run is all about value, but in the short run where most of us operate it is all about sentiment. And sentiment, as we very well know, can change on a dime. That’s why its critical as traders to never take luck to seriously and more importantly to always take your success with a grain of salt. After all if you were a chef, or a surgeon or a plumber your success would be 95% dependent on skill and 5% dependent on luck, but as trader those numbers are vastly different. I don’t think that its a stretch to say that amongst best traders in the world skill is only 50% of your success while luck makes up the rest. For novice traders those numbers are much worse – probably 90% luck and 10% skill.

Given that formula, it is easy to understand why trading can be so frustrating, but once you realize the role of luck it can be also very liberating. You stop endlessly blaming yourself for losses and more importantly you begin to accept the mercurial nature of the market. That in turn allows you to focus on your strategies and setups allowing you to constantly improve that mix of luck and skill.

Have been out of pocket for a week or so here as I muddle through a rough patch on my trading account. Money is tight and my umpteenth time through the Atkins diet is not yielding the results it has in the past. In any case, looking for trading to improve and the weight loss, too, as I give the South Beach Diet a try (another version of a low carb diet).

In the meantime, enjoy this article from Tru TV detailing some of the myths, legends and outright lies of this, our most befuddled nation.

14 Myths About America

There have been significant losses and I know now that in times of consolidation and indecision like these I have to sit on the sidelines quite a bit and wait for determined movement on the higher timeframe charts (ie, the Daily). At least I have stopped the bleeding and although I took losses last week and so far this week they have been very small and I am trying to be patient.

This strategy works and I shall see it through.

Back during the holidays while working at a job that required me standing for nearly 12 hours straight, I suffered a kind of pinched nerve in my leg called meralgia parasthetica. It was quite painful and eventually caused me to be laid off from the job in question.

I endured this condition for over a month with absolutely no signs of improvement. I tried hot and cold compresses, medicated anesthetic pads, strong doses of ibuprofen. Nothing could make much of a dent.

Finally I tried a free consultation with an acupuncturist after reading online about people who suffered from chronic pinched nerves and how a couple had been healed entirely with acupuncture. After just one visit and a 20 minute treatment, my conditions cleared up almost entirely! I ended up going back a few weeks later to insure the last few tinges of pain would dissipate for good.

Worth trying out if you’re in this area: Balanced Acupuncture. The first visit is free. Tell Heather I sent you.

Kev makes a ton of money every week and I for one wouldn’t mind making a ton of money, even if it’s only for a few weeks. But can my fat ass haul a rickshaw around? We’re talking a bicycle here so it’s not as bad as it could be. But still, I wish I could head to Wildwood, NJ where he’s at now and give it a try.

What’s the worst that could happen? Cardiac arrest? That’s for sissies.

Check out the smooth groove and harmony…

Download audio file (Blue_Magic_Chasing_Rainbows.mp3)

I’m talking about the first truly brutal loss since I began the new flag trading strategy. After nearly 8 straight winning days I took a couple nasty losses during the Asian session last night and got hit hard again this morning. I didn’t want to be one of those guys who only tells everyone when he wins, so it was important to me to be honest and make this post.

After building the account up in the first week, I lost more than half the profits in the last 18 hours. It’s a sobering reality and a harsh lesson that I cannot let a good string of wins lull me into taking sketchy trades outside the rules and during off-hours when there is little momentum.

I’ll be back, of course. I’d already deposited more money earlier today and I am still up overall both this week and last. I just need be more careful that great gains aren’t wiped out by stupid losses.

This week wrapped with four straight winning days and would have had a fifth on Friday (charted the signals I would have taken and would have had 5 out of 6 winners) but had to drive dad to see his doctor. I pulled down between 2-4% each day and finished the week up 20% on total account balance. I am hoping to add cash to the account this week and am looking to crack the first $1000 in the weeks ahead.

Merchantprince Flag Trading

But now I have some very sound strategies in place and have developed all the “personality” tools to succeed. To make this official, I am linking my account page on MyFXBook, a service which dynamically catalogs all trades in any active account with my broker. This link provides some cool metrics to visualize how well (or not so well) I am doing at any time.

I’ll repost this link as time goes on, but for now here are the results from the first week or so with the new strategy:

Merchantprince Flag Trading

But now things are beginning to happen again and I think it’s worth bringing this chronicle back to life. Rather than provide a lot of “entertainment” posts I think I shall focus on this being simply a personal blog with some great music and videos to liven it up from time to time.

So let’s get back the posts!