Method complexity syndrome is one trap that amateur Forex traders fall into regularly. They investigate a trading method, pay for it, and as soon as they get their hands on it, they skip ahead to the place where they think “the guts” of the method is located. Doing it that way, they manage to altogether neglect the other phases of trading, such as risk management, discipline, and psychology.
They jump right into the “guts” of the method only interested in the great, mythical, brow-raising, I-am-not-worthy bowing “secret” which will all at once disclose the code to the Forex strongbox and let them be the Ultimate Winner of every Forex pair. Over and over, they find themselves feeling deeply frustrated or criticizing the “guts” as something that everybody already knows (but had never tried themselves). Beginning traders will disregard it because they know this is too simple.
Or, the amateur trader will search for some complicated formula, or some arcane combination of signals but what they usually will find is a set of basic indicators that come together in a novel way, and they say, “Well there’s nothing so special about that!” Then they get frustrated or become disillusioned, because they truly believe that any successful method MUST BE complicated. They ask how it could possibly be that SIMPLE! Thus, they put away the method or give it back and bewail that it is “not complicated” at all.
Which is a severe blunder as the amateur trader will then make the same mistake, method after method, and they will fail to spend time delving into the intricacies of the entire trading process.
Avoid committing this mistake. You should know that the majority of trading methods are actually pretty simple. They build a more compact group of rules into a simple arrangement (adequately simple so that everybody can use them) but put them into play with an unconventional approach. If you cannot understand something, you cannot possible apply it; complex systems are for computer wizards and big banks.
Don’t miss a step in the learning process of the extreme new technique for trading Forex. Once you have your method in place, get the fundamental rules of getting setup, getting in and getting out (all of which should exist) down as well. Be sure you know how to employ stops to shield your trade. Learn how to best use your methodology in a timely fashion (no matter whether its by the hour, day or week) to be sure you can get the most from your method. Finally figure out how all aspects of what you learn will mesh together to make you more successful as a trader.
Take to Heart, Simple but Powerful – The key to get a leg up on the markets is to apply a non-textbook approach on just a limited set of indicators or rules.