Time to FOCUS
Everyone but everyone keeps saying that phrase above when regards to trading. I've been hearing it since the day I started but how many traders actually follow the advice of that beautiful saying? It's a phrase that everyone knows - but few follow unfortunately.
In the bad old days when I spent a fair amount of time on forums while I endeavoured to learn this game of games I saw trader after trader banging as much rubbish onto his charts as was humanly possible. Then spend the next two years analysing them. What a waste of time.
The process was then repeated until it was time to pack in trading altogether!!
In trading it is essential that you practice 'Sweet and Simple' without fail. The problem however is that everyone wants the next latest and greatest indicator to grace their charts because of that 'Holy Grail' syndrome. A mentality that will surely cause that trader to fail when following the search for that stupid Grail. You know - the one that does not exist..!! Read about it here.
That search will go on and on for ever, wasting much valuable time better spent elsewhere.
Simple v Complicated
Generally speaking, whilst trading it appears to be those who tend to lose who have the very complicated methods. Although 'complicated' does have its place and it should be reserved for those who know EXACTLY what they are doing - but it is definitely not for me.
A new trader will usually start out with a simple system or method and often he will do ok. But as the time comes when he wants to 'improve' a method that already delivers the goods, that is when things start sliding downhill. It is that slippery slope as he feels he needs to expand his knowledge. Why play about with a winning system? If it ain't broke... etc.
I'm not the most stupid of people (though I do have my moments) but I have tried the complicated systems and even the very complicated too but I could not make a living from them. A trip back to the drawing board saw me improve my results by employing simple simple simple.
Be assured that the professional trader will not even look at anything complicated, he has neither the time nor the inclination for the endless analysis of indicators whether technical or fundamental, nor the need to play around with the endless lines on the chart that many of us seem to adopt.
Where to focus?
I must say that my personal trading improved no end with the clear and uncluttered charts I now use so that I have no need to fix something that ain't broke. The key is to never let go of the basics. What are the things you should focus on if you want to keep it simple?
You are trading real currencies in real countries where any news from those countries will affect the price of that currency. By having a reliable news calendar at your disposal will help enormously and prepare you in advance for any shocks. DO NOT trade blind.
A reliable strategy
This is where the Black Dog Program comes into its own. Everything that is required to enable and establish a proven simple strategy is covered. I have used the Dogs in several of its variations over the previous 15 years or so and it has stood the test of time. I will use nothing else. At Black Dog, we use KIBS rather than KISS - Keep It Bloody Simple..!!
Patience and Discipline
These are two very difficult words to master in a trading sense but it can be done. Briefly, and we'll come onto the subject in a later post, your Trading Plan should encompass each and every area of your trading and cover all eventualities. You must have the Patience to wait for the correct signals that your strategy generates and the Discipline to carry them out as per your trading rules which are set down completely in your Trading Plan.
If we manage our trades correctly then the money will manage itself. This is covered extensively within our program. We at Black Dog prefer not to do money management as we would rather leave that to the bank manager. Managing those trades is all-important and so it should be for you too. Trade Management.
It doesn't get much simpler than that
- watch out for news
- use a simple reliable strategy
- build your Trading Plan
- employ Trade Management
Profitable trading is difficult - let's get that straight from the start. But wait a minute. Is it?
I believe that it is the trader himself who makes it more difficult by complicating the issue with all manner of analysis, indicators, chopping and changing of strategies, system-hopping, and so on. To be successful at trading (forex or any other trading) you need an 'edge' and then execute that edge ad infinitum using the focus points above, but at the same time employing a sense of simplicity. We seem to have this propensity for making the simple into the difficult.
So, why do so many people make trading harder than rocket science? The more that there is to confuse you on the charts then the more confused you will be. That definitely is not rocket science.
I make every effort to get rid of the flashing lights, dancing girls, bells and whistles off the charts. You will find that most of the garbage that you have on your charts is not needed anyway - why have it?
The more that you have on your screen then the more that there is to distract, confuse, and disorientate you. Get yourself into that distraction-free zone and concentrate on what really matters which is to make those trading decisions in a timely and well-thought-out manner with the aim of growing your account. Nothing more, nothing less.
For example, reduce the number of pairs, or indices, that you trade to cut down on the numerous and confusing signals from your charts. The professionals usually trade only one chart, which is why they are professionals.
With a clear uncluttered chart comes clear thinking when it really matters.
The simple traders are NOT the most successful; neither are the complicated traders.
The best traders are those who FOCUS on a few key points and trade their system without the never-ending chopping and changing which can be seen on most trading forums.
These are the points that have stood me in good stead for many years, and continue to do so.
A nice clear uncluttered chart, an excellent strategy, a plan for everything, and then once in a trade I have every eventuality covered. Excellent..!!
The Black Dog Program has modules covering all these topics and much much more.
Remember - KIBS..!!
Do you agree with this post? Let me know in the comments below.