Beginnings 2 My first trading system

I came back from the Saturday morning Equis presentation on Metastock with software in hand. I had just bought my first on-line trading software. I had scheduled myself to be in a weekend class to learn how to use the software. That was a long time back; but I can remember it vividly. What I planned to do was learn how to use the software and then apply it to the mutual funds in my 401K portfolio to determine when I should enter and when I should exit a mutual fund based on how it was doing.

So what was the first decent trading system that I learned and what do I think of it today?

The first system that I used came with the Metastock end-of-day software. It is called the CS Scientific Inc.- Hybrid Trade Screen. I pulled up a chart on one of my 401K mutual funds, clicked on expert advisor in Metastock and applied the trading system on my chart. Immediately it transformed itself from a black and white graph to a chart with a blue – red price line. When the price line was Blue it implied things were good and one should be long. Red implied not good, and time to exit. Quite simple really. Unfortunately all the mutual funds I had money in were red and told me I should get out. I was on the left free fall red line on the chart, and sliding. I was frozen. Yes, that was back in 2002.  Back then I had vowed to learn how to manage my money better as you can never count on who you can trust and who knows what they are doing with money, and who has a similar mind set as you for risk. See chart below of what one of mutual funds looked like back then in 2001-2002.

Eventually I was able to overcome my inaction and get out of the markets and put my money into a 401K money market type fund; but not till a lot of damage had been done. And as I continued to learn the nuances and tricks of using Metastock, as well as my own emotions, I lost less money and slowly got hardened and tempered in the markets. It was a hard time to learn trading 2001 – early 2003. I can say that I learned through one of the roughest times in the market. That learning also prepared me for 2008 when I was able to exit the market and protect my holdings through the crash of 2008 and get back in 2009. I think it is fair to say that learning takes time, and usually 4 – 5 years before you really understand the technicals and yourself. And by the way – the First trading system I liked is still pretty good, albeit a little choppy in sideways markets.