“Make everything as simple as possible, but not simpler.”-Albert Einstein
“Simplicity is the ultimate sophistication.” -Leonardo da Vinci
My trading success has been a journey NOT of adding things to my trading, but subtracting. My success has always been with simplicity my failures in doing the overly complex. The more I added to my trading in the early years the worse my trading became, my big money was made following price action and focusing on a few stocks movement. I lost the most money selling options short or trying to trade off economic news.
In the markets the money is made by following the flow of money into and out of assets. That is it, everything else is an attempt to measure and understand this flow. Price is reality and the ultimate indicator all other technical indicators are simply derivatives of price. Money is made through trading over the long term by losing small and winning big not with a crystal ball.
In trading, he who has the best filter wins. Knowing what to ignore is a skill. Here is what I ignore:
CNBC- During 2012 I only watched CNBC twice during market hours,once during the facebook IPO (That fortunately I did not buy) and one Obama Speech. The result? Best trading year of my life, so far.
Talking Heads- Just because some one is on television does not mean they are a great trader or investor. The vast majority are just journalists, ignore their picks and trade your own robust method.
Opinions- Free opinions are generally worth exactly what you pay for them-nothing.
Unsolicited Advice- Anyone volunteering advice to someone that didn’t ask is generally a sign of arrogance. How can someone give advice to you if they do not know your trading time frame, method, or exit plan?
95% of technical indicators- I trade off price, chart patterns, sometimes volume, and moving averages. All natural no additives.
“The height of cultivation is really nothing special. It is merely simplicity; the ability to express the utmost with the minimum.” -Bruce Lee.