Becoming a Better Trader: Reduce the Noise, Keep It Simple
Paul conducts webinars every Wednesday, Thursday, and Friday. For details and a full line-up of upcoming live events, please see the DailyFX Webinar Calendar.
In today’s webinar, we discussed the importance of having a narrowed approach to trading to avoid noise which causes indecision. All too often, traders will pile on numerous types of analysis thinking that ‘more is better’, but really ‘less is more’. With that said, we didn’t get into a full-on discussion about what you should or shouldn’t be looking at or using, necessarily, (there are lots of approaches) but rather that you are aware of how the different types of analysis you are using interact with one another and that there isn’t a lot of redundancy and ‘clutter’.
For example, a simple approach which incorporates a limited number of tools for identifying trend, support and resistance, and sentiment would be a suffice methodology. We also discussed the importance, or lack thereof, of fundamentals and all the data points which come with it when looking out over short-term time horizons. Often times fundamental views are macro in nature, which shouldn’t be overly focused on when trading short-term price fluctuations.
All-in-all – a simple, ‘dumbed’ down approach can be a highly effective way to clear through the noise towards making better decisions.
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.