When people think of trading, usually they immediately think of something complicated, very sophisticated and available only to a few of the smartest individuals. We do not want to lie to you, the behavior of the markets is tightly interconnected and there are multiple ties in play here, but you can be successful even without extensive knowledge of the market. Even the best traders do not know everything. Come and see for yourself that it’s not that complicated.
In trading sometimes, less is more
When I first started trading, in my case it was on a forex market, I was no different. I wanted something that would filter out all my loss-making deals. I used one indicator, then another indicator, there I heard something good from the price action, so I have combined it with fundamental analysis (macro news) and finally about the important lines from Fibonacci on daily spreads.
I won’t lie to you, it was a Frankenstein monster, that was doomed from the beginning. I thought I’d outsmart the market if I combined all of these things. But that was a mistake. I was sitting at the computer, and usually, the entry was confirmed by “just” 4 of 7 indicators. This was not a way to go, it was too complicated, over-combined, and ultimately unsuccessful.
How was this possible? I only used good things, but it didn’t work anyway.
The explanation was quite simple, actually. Within the given timeframe, the market shows you this data – minimum, maximum, opening price, closing price and current price for the current candle. Nothing more, nothing less.
Thus, the indicators have no other information, and all they can do is work with these data. And if you combine these, you are still looking at the same picture, but from all possible angles. So, it still won’t work. Some indicators are of a trendy nature, others are intended to move sideways. Moreover, if you set a different delay everywhere, the problem is taken care of.
Yes, we have hundreds of articles and recommendations on our website. It is definitely worth your time to read some of these articles. You may even think of something on your own but do not over-combine these ideas. So how do you start?
There is strength in simplicity
You need to realize, right at the beginning, that trading is really no theoretical physics or some kind of a rocket science… Just choose a trading strategy and start trading. Most of the well-known trading strategies – even the simplest ones (usually with just one input indicator and one filter, or even just one) are profitable!
This is really important. The problem is that these strategies are really just above the long-term profit. If we consider a 1: 1 profit and stop loss, then these strategies will have a 50-60% success rate.
They will do quite well, and they will earn you money, but most traders are greedy right from the start; They over-combine their strategies, lose money and quit trading.
How to start trading
- Read a few tips about trading strategies, choose one, backtest it and use it to start trading
- Choose your trading time (maybe just one hour after work) and at the given time use trading signals on the selected tool.
- Immediately after entering trade enter stop loss and take profit
- After this, have the deal closed, with or without profit
Trading really isn’t extra complicated. You will certainly not become an expert in one day or even in one week, but you will gradually get into it. Start slowly, do something simple, educate yourself, read some of our other articles, think about what you have learned, and after weeks and months of trading with a proven trading strategy you can start working towards some improvements.
Finally, I would like to mention one personal experience. I have gone through several mentoring classes. In one of these classes, I have received a whole trading strategy. With it also came clear instructions – do exactly what this strategy says. When I met with the mentor in 14 days, he told me that only about 10% of his clients traded the forex strategy as it was, without additional changes to it.
Clients understand the strategy, but they want to improve it – add something to it. Then the strategy stops working, or maybe it works better, but only for a short period of time. This clearly proves the entire problem. Sometimes it is just better to believe in simplicity and give enough time to everything.
Don’t make it more complicated than it has to be.
Author
More about the author J. Pro
Unlike Stephen (the other author) I have been thinking mainly about online business lately. I wasn't very successfull with dropshipping on Amazon and other ways of making money online, and I'd only earn a few hundreds of dollars in years. But then binary options caught my attention with it's simplicity. Now I'm glad it did because it really is worth it. More posts by this author