Hard to believe it has already been (or only has been?) about 3 months since I signed up for Renato Santos' Diamond Setups (DS) program. I've believed in this system from nearly the beginning when I first saw it after 2 weeks, and so far, it has continued to deliver just as Renato had advertised.
For those who like to cut to the chase and avoid the babble, just skip this interview section and go towards the end. But for those who like to hear the voices in my head regarding DS, read on...
Interviewer: So Grove, how has the DS system performed?
Grove Under: As advertised on Renato's site. Over the past 3 months, his alerts have generated profits well into the triple digit ES points. There have been stretches of up to 20-30 trades where he hasn't had a full stop loss. Unbelievable.
I see it happening, all timestamped, in real time, and it's amazing to see.
I've tried to find something significantly wrong with the Diamond Setups system or with Renato, thinking that maybe this is some sort of scam or dream, but I've failed, so I've long since given up.
Interviewer: How have you personally done, Grove?
GU: Oh. Uhmmm... I've...[unintelligible mumbling]
Interviewer: Why do you always avoid the "tough" questions?
GU: OK, I'm still here. I've had my ups and downs. Did well on SIM in October for my first month. Accidentally started trading live early November and then decided to continue live.
I was overconfident and when I hit a little rough patch, I went on tilt and lost about 25% of my portfolio in a matter of only a few days. I obviously didn't follow the DS system during that time and went bezerk.
Interviewer: OUCH! Talk about choking, bro!!
GU: Hey...c'mon man. I'm answering the question honestly, not avoiding it!
So back to SIM I went for about a month to regroup and to continue finding the style of trading DS that works best for me (and still continuing to work on that now).
I started trading live again in early December with these results (all gross points):
Week Ending 12/09: +16.75
Week Ending 12/16: +3.50
Week Ending 12/23: -6.25
Week Ending 12/30: No trading
Week Ending 01/05: -6.25
Interviewer: Oh, I see a little rough patch going on the past few weeks? Wouldn't just simply following the DS alerts have worked much better? Then why don't you just simply take Renato's DS alerts?
GU: The holiday trading volume got to me a bit. Volume and volatility wasn't quite there as before. Also ended up making many mental errors.
And yes, I significantly underperformed vs. blindly taking the DS alert trades. But I'm trying to trade the DS system based on what works best for my style. I'm working on getting to the point where I can trade without the alerts -- the whole "learning to fish" goal.
Interviewer: If someone is giving away fresh fish, why don't you grab everything while you can before it goes bad, bro!! Based on your holiday trading excuse for your recent performance, you must be starving. Don't go bezerk again, man!
Well, like anything else, there's time and "tuition expenses" involved with finding your way. You have to find what works best for you and there's only one way to find out.
Just because you use Tiger Woods' golf clubs or Nadal's tennis racket and try and play their style, doesn't mean that you will be as successful as they are.
Nor would a basketball player best suited for playing center be a great point guard, or vice versa. We all have to find our strengths and play to them.
Interviewer: Uh, maybe you shouldn't have used Tiger as an example.
GU: OK, let's just imagine we're talking about this 10 year ago, happy now?
Interviewer: Yes, maybe just a little. So what's next?
GU: I'm going to tighten down my trading plan which continues to revolve around DS, and work primarily on my ability to execute according to my plan. I must focus on establishing a great process, not on my P&L.
And on a related note, I'll continue to strengthen my mental game, since that's critical for achieving those goals, and therefore, for my long term trading success.
Interviewer: OK, Grove, sounds like a good plan. In all honesty, I really believe you're starting to get there. Let's catch up again in a few months and good luck!
GU: Agreed. Thank you, and I'll have much better news to report next time.
ADDITIONAL THOUGHTS ABOUT DS:
Here are my thoughts after 3 months with Diamond Setups:
- First and foremost, I continue to believe the Diamond Setups methodology is solid.
- And it's Renato's support in his chatroom that really makes this all work. If you were to try and learn only by simply reading the system's rules, you're only getting a small piece of the puzzle.
- Communicating with other members in the room with a similar trading style has also been extremely valuable. Similar to what this blog has achieved, I've made some great new friends with like-minded traders.
- Renato is a machine, very consistent and reliable, like clockwork. If it weren't for a minor mistake on a rare occasion, I would have thought he was not human.
- And if Renato does make a mistake, he's quick to apologize and admits the error. How many Wall Street types do this regularly?
is my first subscription to a chatroom service, so I can't comment --
but others have told me that Renato is very unique in this business
because he is so patient, respectful, and very open about teaching you
- Humans have common sense and spatial recognition of market structures that can not be easily programmed into a mechanical system. The DS rules seem to capitalize on this.
- You can tailor the DS rules to work in whatever timeframe and level of activity that matches your personality. Finding what DS style works best for my personality is what has taken time for me to figure out.
- The larger the timeframe (i.e. swing trading), the larger the stop. The stop could be upwards of 5 to 8 points or more. But you could also catch 20-100 ES points on a good winner.
- The lower the timeframe (i.e. scalping for +2 points), the smaller the stop. The stop for scalping is usually around -2 points.
- Renato would be the first to tell you that you need to find the style of trading Diamond Setups that works best for you.
- So far, the consistency of DS is impressive, regardless of market volatility, and trend vs. non-trend days. And based on what I've seen, it seems like a non-trend day with decent volatility is the sweet spot for DS. Fine with me, since trend days only seem to take place 10-15% of the time.
- Watching Renato trade is like watching and learning from a master magician. You know how the magic trick is done, but you're just in awe at how well it's consistently executed.
- He says he's like a bricklayer, simply putting up one brick (trade) at a time, eventually building up a big wall. But I think magician sounds better.
- Renato has a very interesting background. Sometimes, I think he's the Brazilian version of "The Most Interesting Man in the World."
THE BOTTOM LINE
Looking back over the past several months, I've found that signing up with DS has provided incredible benefits. Watching a successful trader in action, consistently displaying great discipline, as well as having him openly explain why he's making his trades, has been extremely valuable.
Watching Renato make profits nearly every day has been an eye opener as well as great motivation for me. If I had not seen this for myself, every day, in real time, all very transparent and timestamped, for the past 3 months, I would not have believed it.
Let's just say that even if I never trade again (not likely!), I would look back on this time with DS as one of my greatest experiences with trading.