One of the problems many novice, or even experienced traders have is a lack of discipline. By that I mean when a system experiences a dull period most traders assume the system doesn’t work and move on in search of the current fad of the moment. The problem with this approach of course is the reason something is fashionable is because it’s been working long enough for traders to take notice. That usually means the system is about to break down. All systems break down from time to time. It doesn’t mean the system is a losing system, it just means it’s going through a stale period.
If over time the system has proven to be a profitable system then one should stick with it as the stagnate period will come to an end, and profits are just around the corner.
I’ve seen this play out over and over at ICL’s. In our modern markets it’s not as easy to spot exact bottoms as it used to be. Often it takes several attempts. Does that mean that cycles & sentiment no longer work as trading tools? Of course not. One just has to work a little harder nowadays, but neither one of these tools have become obsolete.
Invariably what happens at every ICL is if it takes more than one attempt to catch the bottom the impatient and undisciplined traders jump ship and go searching for something that “works”. Of course what they end up doing is jumping on board the latest fad right as it’s about to stop working (remember bitcoin?), and then they miss the profits when the stale period comes to an end and the proven system starts working.
Over the years I can’t count how many subscribers gave up too soon and then missed the gains once we caught the bottom of the ICL. Over the last 2½ years the metal portfolio has gone from $100,000 to $508,000. How many people missed those gains though because they lacked the discipline to stick with the system through the stale periods and hold on for the gains? A lot!
Find a system you can work with. Back test it to see if it produces gains over time. If it does then stick with it, and don’t give up just because it occasionally produces losses. All systems do.
For myself I prefer a combination of cycles, sentiment and a dash of technicals. Does it produce every month? No of course not. We have losing months just like everyone does. Does it produce consistent gains over time? Absolutely, and as far as I can tell it does better than any other system I’ve ever seen, because it’s a contrarian system (which is why I use it 🙂 )