Tradingmastery - Trendline Mastery - Aldo Lagrutta
Aldo Lagrutta – “Professor Trendline”
Now let me be honest up front… In order to become successful in trading you need a lot more than a robust trading methodology. You also need a great Trade Management, and – the most difficult part that no one wants to tell you is that – you need to become a master of your own psychology.
In my experience, I see that often the psychological conflicts are profoundly linked to the strategy used. While that is not always the case, a proper strategy does help with the psychology if it eliminates doubts.
For instance, from the very first trades I took, I noticed that practically every time I entered the market, I would second guess myself. With time, trading became a horrible experience of living and dealing with uncertainty.
At the time, I didn’t have the necessary knowledge, so I began a search for more experienced traders who could help me and teach me how to trade profitably and with confidence.
Surprisingly enough I found many people willing to help me for… a rather large fee.
I started trading with many of the so called Trading Gurus and I also noticed that the majority of traders I traded with, no matter how veteran or how complex their trading strategies were, they also suffered from the same disease I had when they were in a live market. It was like magic… as soon as they entered a trade they started to wonder if that was the correct decision.
And often these doubts became even worse as the trade continued in their favour. Now they started doubting if they should exit the trade with whatever profits they had or if they should live by the old adage “Cut your loses short and let your profits run”.
More often than not, I could see them talking themselves out of good profitable trades by saying “No one has ever gone broke by taking profits”.
I knew that was not the right way… I had to find a proper answer for my conflict… so I decided to look for a proper mentor with a lot of trading experience and who would be willing to work with me one on one. But there was a problem: The few real experienced traders out there with the knowledge and willingness to mentor me were horribly expensive!!!
Well… to make the story short, they took all my money and taught me few tricks that were worth nothing. I learned about their favourite indicators and settings with their “secret” trade set ups. Some worked more or less ok, some didn’t work at all.
Eventually I made learning how to trade profitably my life challenge.
I had been successful in everything I did before trading and could not accept failure as my end result. At least I refused to do so…
But in the meantime I continued haemorrhaging money!
So, I decided to dive in this business as deeply as I possibly could – not just to learn how to invest or even earn money trading, but now I wanted to know all the intricacies of what moves the markets. In order to accomplish that, I undertook the monumental task of studying the entire discipline of technical analysis. Then I learnt the truth about indicators, Oscillators, and all sort of analytical tools like Gann, Elliott, Chart Patterns and some less esoteric ways to approach the market.
Finally it was like the story of the fish who kept asking his elders where he could find water… The answer had been there all along and I had missed it altogether.
The answer to trading with confidence was in the correct use of one of the simplest tools that Technical Analysis has to offer.
I am sure, you yourself have been exposed to this tool and missed its value (possibly many times over) – just as I did. Just as so many market participants do.
We all agree that we need a robust trading methodology. In fact, we all look for it everywhere, insatiably. We buy courses, watch YouTube videos, ask other traders, etc… But what we don’t realize is that a robust trading methodology does not need to be complicated. In fact, the secret of a good trading methodology is that it needs to be as simple as a ring and reproducible.
It should not leave any traces of doubt in your mind. It should include clear reasons for entry, exit, targets and stops, thereby eliminating all possibilities of second guessing yourself both before you take a trade and while you’re in the trade. Once you have that, you will have eliminated at least one of the most common psychological obstacles in trading.
Ideally, it should be a strategy that allows you to identify the trend as early as possible and to join it with a minimum amount of risk. Or at the very least, it should help you identify the termination of a trend with a certain degree of accuracy and then to join the reversal.
What could that strategy be?
The single biggest contribution to my personal trading success has been the simplest tool that traditional Technical Analysis has to offer:
Trendlines have literally turned thousands of professional traders into “Trading Success”, positioned them as “Celebrity Analysts” worldwide and transformed losers into winners practically overnight.
And in addition to all that, I’ve found Trendlines much, much easier to apply than, say, Cycles, Gann, trend following systems, or even the very effective pattern analysis – which in all honesty – is very subjective and requires years of experience to become good at it.
I am sure you are thinking “It can’t be”.
“I have used trend lines before and they don’t work.” And you are right!
Most people at one time or another in their trading efforts have tried to use trend lines. The question is, do they know how to use them properly?