I loved the financial newlsetters that touted their fantastic returns like 400% in company xyz and 900% return in company abc. How about the come on "if you had purchased this company" (insert Microsoft, Dell, Google, etc. etc.) when they went public you would be docking your yacht on your own island right now. So what is the problem with this? One, these guys never recommended these companies when they went public; they just used them as examples and two, even with their publicized winning trades for some reason they always forget to mention their losing trades and nobody ever has 100 percent profitable trades.

Using a trading system

Now don't get me wrong, a good trading system is worth its weight in gold. The question is how much gold does it take to subscribe to a good trading system? Going to this type of investing method was just a natural progression for me with all the "success" I had with the other methods. At the end of the day if you haven't figured this out yet you will find it easier and more financially rewarding to buy and sell the indexes rather than individual stocks.

With this in mind I starting subscribing to trading systems. The amount you pay per month to subscribe is not proportional to the returns that you receive. Most of these proprietary systems will generally have you on the right side of the market, but because they use so many indicators they basically end up second guessing themselves and either you are whipsawed in and out of the market or your returns just get watered down because the systems "just can't seem to make a decision".

I did make an interesting observation with a few of these financial trading systems and that is the ones that produced graphs of the stock market showing where they entered and exited over a period of years. The interesting thing here is that they all seem to enter and exit within a very short period of each other. This got me to thinking that there is some common denominator to all these so called proprietary formulas and thats when I decided if these guys could do it; I could do it. This was the point that I started experimenting around with various technical indicators.

This was how my system* was born.

As I have stated elsewhere in this site, I started experimenting around with some of the more common technical indicators, primarily those recommended by some of the "free" gurus on the internet. The problem was I could not get consistent results (nor could they); an indicator would seem to be fine for a while and then it would be off the charts in terms of inaccuracy.

So, I started playing around with the values and found my results somewhat better but still inconsistent. I do not recall how I originally found my present indicator, either through research or by chance, but I kept changing the variables and finally reached a point where I had some degree of consistency in my returns. I knew I was on to something!