K.i.s.s. ‘ keep it simple stupid forex trading method ‘
K.I.S.S. Forex Trading Method
The acronym K.I.S.S. stands for Keep It Simple Stupid. This acronym is as applicable to the field of forex trading as it is to any. Keeping it simple in regards to your forex trading means keeping all aspects of your forex trading activity simple, from the way you think about price movement to the way you execute your trades. Simplicity is the most often and easily over-looked factor to profiting long-term in any financial market. The reasons that trading lends itself so easily to leading people to believe that they must use complicated and (or) expensive trading methods are many and varied. This article will help you to understand why traders tend to over-complicate forex trading and the best way that you can work to use the power of simplicity to your advantage.
So you’re excited about the latest and greatest programmed indicator that has been getting hot press in the forums. You just know that this one will work, the returns that its creators have posted look absolutely brilliant and you can’t wait to try it out. That last indicator based method didn’t work as you expected it to, but this new one seems like it makes a lot more sense and all the testimonials you’ve read just can’t be wrong….
Many traders harbor similar beliefs to the above paragraph, they think that by trying enough trading systems, eventually they will hit upon that one that is their automatic ticket to consistently profiting in the markets. This belief is exactly what causes many traders to blow out their accounts time and time again only to find themselves full of frustration and confusion. Simply put, there is no free lunch trading the markets, many traders think by finding that one great trading system or indicator they can sit back and watch the money roll on. The truth is that nothing systematic exists in the forex market; the market is not a static entity that can be tamed through black box mechanical systems. It is a volatile beast that is driven off of human emotion; human beings vary in their emotional reactivity to specific events, especially when their money is on the line.
The fact is that while almost all traders want to make trading a simple process, they are going about it in the totally wrong manner. Trading can only become simple once you forget about the idea of finding a perfect indicator based trading system that will work in all market conditions. Markets are just too volatile and complex to ever be dominated by a piece of software code.
This being the case, how does one keep their forex trading simple?….. Stop looking for the next great trading system and start looking at the price bars on your charts. By learning to read price action on a raw “naked” price chart, you are learning an art and a skill at the same time. The “art” part of the equation is what allows some traders to make a full time living in the markets while the masses who are struggling to find the next best indicator system continue to lose money by trying to fit a square peg into a round hole, so to speak.
Learning the art and skill of price pattern recognition will provide you with a perspective and not a system. This market perspective is what would be considered a trading “method”, many people use the term method and system synonymously when referring to trading techniques, however; they are really two entirely different beasts.