Confessions and Questions

[nickola.pazderic]

On June 9, I went short with a position in TZA. I thought I did so according to the robot, but I may have misinterpreted the signal to short TZA as a buy TZA. In any case, I'm a rookie, so please forgive this mistake.

During this day Pascal expressed confidence that the market would move higher. Despite seeing red in TZA, I remained confident the market would move lower in the near term. I had stayed in TZA after Dr. K's signal went to cash in early June and added 20% to an already substantial gain achieved by following Morales and Dr. Kacher. Mostly in cash, I took another position in TZA on June 9 because the macro-economic situation seemed a sure drag on the market. I can't list these reasons here, but I felt that I had caught the rhythms of TZA in relation to the market and was ready to ride it for more profit.

I was also, however, excited and fascinated by the development of the robots. And I made a very good return shorting GDX literally overnight on June 7-8. I decided that I would shoulder hard into a position should the robot go to a signal of strength. I expected the next signal to be SELL. Thus, on Friday morning I was in a condition of contradictory feelings and confusion. The robot said strongly BUY but I was certain the Russell 2000 would go lower.

Friday became horrific for me because I sold the TZA for 1/10th of the profit it would have realized had I held it that day. Moreover, I sought to establish long positions without conviction. At the end of the day I felt like my weight on planet earth had disappeared, and I had become a bouncing specter. I felt this way because my rhythm in the market was lost.

I have spent this week trying to establish and hold with confidence a long position in TNA and IWM. Market makers have made some pocket change from me.

So, here comes my question (if it is that): when I examine the back test data, I see that May 2010 provides a number of examples of when the robot had picked wrongly-- moments in time when the market went lower. Since I was not a participant at that time, I can only imagine how a market can break through the last remaining supports and sink into new depths. How does one's macro understanding/interpretation of a moment affect one's ability to follow a machine?

Throughout this difficult process for me, I have read with great relish the comments of experienced hands, such as Pascal, Billy, Paul Duncan, Mike Scott, Gil Morales, Dr. Kacher, and Ian and Ron. For all this help I am tremendously grateful. But ultimately the choices are mine; the trades affect only my family; I am, at the moment I push the button, utterly alone. I also recognize that my trading decisions are affected very much by my so-called feelings—that is, by my sense of rhythm at work in the market. How do I integrate the feelings and the macro-economic insights with the commands of a robot remains perplexing to me? I can confess I'm trying to remove the feelings, but I worry to do so would leave me disconnected and aloof from the information and trends that define our time. I also worry that at the time I become comfortable with a robot determining my fortune, the market will learn to foil this sophisticated instrument and break it, as it has broken other trend systems.

So this is my confession, and these are my questions. I don’t know whether not any one can or should respond to it. But, regardless of the embarrassment, I’d like to share it. I hope to learn what others experience...