Strip it Down!
Everyone stripped down method will be different but the idea is to only have, a few inputs and discard anything which doesn't add value to the method or even worse, make it harder to apply or due to its compelxity (meaning you have to think to much about trading set ups) or has to many rules to generate a trading signal ( which will make it less profitbale) and this i have covered in other areas of this site.
Reduce Clutter and Act
One of the best books I ever read was "How to Clear your Desk" whcih was all about getting rid of paperwork and tasks and focusing on the important ones. In terms of currency trading, you need to get everything out of your strategy which is not really needed and most traders tend to have strategies which are morfe complex than they need to be. To have lots of rules is natural to many people and also, to have lots of help from technoloy and the Internet but this is a mistake in trading.
The Battle is Won By Simplicity
Your trading against other humans and its a battle of minds not technology. You need to be simple and act fast without hesitation. in life people are taught to get help and to not act quickly - "you need to think things over" as the old saying goes but in Forex trading this is a huge mistake. If you have to think about a set up and don't have clear, definable, objective rules - you shouldn't put the trade on.
Many traders think that the more the y look at a chart the clearer the set up will become but this is nonsence. Also, not only do they want to look at the chart, they will want to get other people's views on the set up as well. When they do this, they are not following rules and letting their emotions come into trading.
You should look at a chart and in an instant, you should know what to do, there should be no thinking involved and you certainly should not be asking someone elses opinion. If you strategy is simple and based on price action then you will see set ups instantly and act desisively.
Price Action is Simple and so should a Trading Strategy
If you think about it prices can go only two ways up or down and the trend should be clear on the chart to you so trade with the trend at all times. The porblem for most traders is they want to detect when a trend might change and for some reason always want to pick a turning point rather than simply trading with the prevailing trend in the market.
These traders never win becuase they can never hold on to a move for long enough to make a decent profit to overcome, their losing trades. They have lots of losing trades but tend to cut their profitable trades to soon. There is no need to try and figure out when a trend might change because - the chart will tell you when it does and you simply have to follow the trend.
A Simple Forex Trading Strategy for Bigger Profits.
Look at your trading strategy and strip out the clutter. For example I was looking at one traders strategy and he was using 5 momentum indicators to time his trading signals and needed them all to be confirming at the same time so what happened with this strategy?
It was to cumbersome - he missed a huge amount of trading signals and the ones he did get tended not to do so well. I told him to use just 1 or 2 indicators, to make the strategy simpler and he doubled up his overall profits. I use indicators but there just a back up tool to the most important trade indicator of all which is - raw price action.
The less subjective a trading strategy is the better it will perform and this is due to not having to think about it. If you think to much, you will let your emotions question trades and start to miss trading signals whcih price action is probably telling you to take. So make the rules of the trading system your using very objective.
When you come to trade your method, it will be simple enough to catcha ll the big trends and you will not be thinking about it to much either becuase the rules you, are simple and what you should do on a chart becomes obvious.
Simple V Complex
We have mentioned numerous times on this site - simple systems are far better than complx ones. Many traders like to hide behind their trading systems and make them complex so they feel they MUST work but the reality is there just not confident in their ability, trading edge or have got the wrong trading education.
In Conclusion.
We tend to clutter our lives with things we don't really need and many of the things that clutter our lives make us feel safe and secure but they also, stop us from thinking for ourselvles and concentrating on what really matters or seeing what's really important.
What would make be happier - A gaming console or an educational book? The answer is a good book but it will cost, a fraction of the games console. and be no where near as clever as the gaming machine.
Simple to me is the way to run my life - I clear my desk and throw away clutter in my life and live a minamilist existence and I focus on simple pleasures which develop my personality rather than oppress it - for me a simple life is perfect nwo my lifestyle may not be to everyones taste but a simple currency trading system should becuase its the best way to catch all the best trends for profit in the currency markets.
