Adventures of a Trader

I’m desperate. I’m now 6 months into my year-long experiment “Can I make it as a trader?” – and all I have to show for is thousands of dollars of trading education: books, courses, strategies, DVDs, systems… you name it. But nothing seems to work! At least not in the long run. I have some success with some of the strategies, but overall my account is still not moving. At least not in the right direction.

I start to wonder if these “trading gurus” are actually making money trading, or just selling their stuff.

I don’t really like to go out anymore. I don’t want to talk to people. I want to avoid the question “What do you do for a living?” and “How’s your trading going?”

But one night Tom came over and literally kidnapped me. He said: “You need to get away from your computer. Let’s go and have fun!” – And Tom’s idea of fun was Dave & Busters.

After a few games we sat down at the bar, and Tom asked the question that I feared most: “So how is everything going? Are you rich yet?” – he joked.

“Well,” I replied, “not yet. And to be honest, it’s not going good at all. I keep losing money. And have spent a fortune on strategies, systems and courses. But nothing seems to work.”

“You should just do the opposite from what you’re doing.” he joked, “then you would make money! Didn’t you say that trading is a zero-sum game?”

He meant it as a joke, but it hit me like a truck! Could he be right?

We spent another hour at the bar, but Tom noticed that my mind was someplace else. We called it a night and Tom dropped me off at home. I had the urge to rush to the computer and test Tom’s theory, but I decided to sleep on it.

The next day I started to test Tom’s “strategy”: Instead of BUYING at the breakout of the high of the bar, I SOLD. And I started buying back at the low of the bar. Very simple. Nothing fancy. No indicators. Nothing from all the books and courses that I bought. In fact, it was the opposite from what I’ve learned.

I tested a simple concept: BUYING the low of the bar and SELLING the high of the bar.

The “Ping Pong Strategy” was born. Over the next few days I tested this strategy extensively on the e-mini S&P. I tried to apply everything that I had learned in the past: using stop losses, trailing stops, profit targets, scaling in and scaling out, … but whatever I tried, the simple concept of buying the low of the bar and selling the high of the bar worked best. With this strategy I was always in the markets. The Ping Pong Strategy is a true reversal strategy – hence the name.

But don’t trade this strategy just yet – read the next chapter first!