K.I.S.S. – Keep It Simple Stupid trading: why simple strategies work and who to trust.
• The search for the holy trading grail.
Ask any professional trader about their trading method and you might be very surprised to learn how simple it is to understand and implement. This is because traders who consistently make money in the forex market have figured out that overly complicated trading methods only work against them and make securing consistent forex profits all the more difficult. When you cloud your trading screen up with numerous different lagging indicators that all tell you something different, or rely solely on the signals from a piece of trading software, you are doing more work than is necessary to make money in the markets. When you enter into this zone of believing that “more is better” in regards to your forex trading strategy, you essentially enter the zone of cyclical trading failure. The reason for this is because traders who believe more is better in forex are always in a search for that next best trading system, because they gave up on the last one after becoming frustrated and confused. This notion of believing that if you JUST had that ONE great trading system you would make consistent money in the markets is what causes traders to drop thousands of dollars on different trading strategies that promise the world but deliver only frustration and losses.
• What to look for in a simple trading strategy and who to trust.
A simple trading strategy will not be heavy on lagging indicators. Certain lagging indicators can be very useful, these include moving averages and a couple others, but by and large most of them are simply a waste of time due to the fact that they lag price and make it more confusing to interpret. What you are looking at when you try to interpret price direction from a lagging indicator is simply what price did in the past in a format that is more difficult to decipher than simply looking at a raw price chart.
Simple trading strategies involve basic technical analysis chart reading skills like price pattern recognition. A good person to learn from on this topic is Martin Pring, his book “Pring on Price Patterns” is the virtual bible of price pattern education. Mr. Pring teaches all aspects of price pattern recognition in this book, everything from how to identify trends to correctly implementing a head and shoulders pattern. The concepts in this book make use of simple chart reading skills that have been used effectively in the markets for centuries.
If you wish to learn how to trade off of Japanese candlestick patterns than Steve Nison is your man. Mr. Nison introduced the concept of Japanese candlesticks to the Western world and has written many great books on how to interpret candlesticks and what the various candlestick patterns are. Forex candlestick trading strategies can be a great tool to augment your other trading strategies or it can stand alone as its own simple yet effective trading strategy.
For a more hybrid approach to simple forex trading strategies you may want to check out Nial Fuller. Mr. Fuller’s take on trading the markets is known as price action setup trading. He combines elements of simple price patterns that Martin Pring teaches along with candlestick strategies. Nial Fuller’s trading strategies are taught in a very effective system of videos, articles, and a comprehensive trading instructional course. His simple price action trading strategies are a unique take on a time-tested method that even includes some proprietary price action setups and ideas. By:http://www.forextradingstrategies.org
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