Declutter. You may think this is a strange advice coming from a trader. But believe me you’ll see great results once you do this.
Does your desk look like the one in the picture? You need to de-clutter my friend.
We are a busy society today. Every day more and more gets piled onto our plates. The end result is a big pile of incomplete stuff that we need to get to… at some point. Clutter is everywhere, on our desks, in our closets, our email inboxes, our Facebook, contact lists on our phone. Everywhere you look more and more seems to get piled on, without the time to go back and clean it up.
We may think clutter does not impact our trading or take away from our life, but we are mistaken. Clutter is an energy thief. It causes stress, costs us valuable resources in mind space and drains our energy every time we think about it. As traders we need to be sharp and focused so we can understand the markets, synthesize the information that comes at us and act on it to generate profits. Plus manage our day jobs, be a good father, mother, brother, sister etc. How can we do all that? As an elite performer, we need to simplify our life. Part of that is de-cluttering.
Besides a messy desk, the way clutter shows up in a trader’s life is on their charts.
Does your chart look like this? You got it, you need to de-clutter.
De-cluttering the charts can be quite powerful. It frees up resources in your brain that can be put to a better use. It gives your mind more room to think about the price and what’s happening in the market instead of having to keep track of a few nuggets that may be buried in the mass of indicators. I know indicators can be quite tempting, with their shiny dots, arrows and lines going every which way. They give us the illusion of confidence when really they are just a distraction. A crutch that keeps us from growing as a trader.
Trade the price not the indicators.
To become a competent trader, you need to learn to trade the price. As you start de-cluttering your charts, you’ll see the price behavior more clearly. You’ll notice how price reacts at each support and resistance level before breaking through or failing. You’ll become more familiar with the ebbs and flows in the price movement. You’ll be able to see the affect news has on the price.
This’ll help you understand when to place a trade and when to stay out. You’ll have a better understanding of the trade scenarios that could play out. You’ll be able to plan your trades better and be more confident in your trading. You’ll understand where to place your stop losses and profits targets and why. You’ll be able to objectively look at the trade and see if it makes sense to enter it based on whether there is enough room to take profit s or if there is too much risk in the trade based on where you’ll have to place the stop. All these things will help you hone your skills and become a better trader.
Too preachy you say. Let’s just say I’ve been there and lived to tell the tale. I, like everyone, started off with tons of indicators as well. I thought each additional indicator would provide confirmation and give me more confidence in my trades. That, of-course, didn’t happen. My trading didn’t improve because of the indicators. They just took up space on my charts and made me lose sight of the price behavior. Now, my charts look quite different. Nowadays, I look for the story that the market is telling me and base my trading on that instead of waiting for an indicator to turn. That’s not to say, I don’t use any indicators. I do, however, I use them sparingly.
Some of the indicators that I use are EMAs (50, 200 and 800). I don’t use these to tell me when the trend is changing, I can see that based on the price behavior. I use these to find areas of confluence and psychological points where the market could potentially turn. I also use fibs and trendlines. However, they don’t always stay on my charts. Again, I use them to find areas of confluence for higher probability trades. Let me tell you, my trading changed when I de-cluttered my charts and tossed out the multitude of indicators I was using and started watching price instead.
The point is…I am not against the use of indicators. They can be a valuable tool in your arsenal. Just use them as support material, not a crutch. Again, trade the price and not the indicators.
Talk to me, leave a comment below and tell me your story. How did de-cluttering help you?