The K.I.S.S. (Keep it simple, stupid!) Method

Filed under: Learn Forex Trading |

Many beginners to forex trading make the predictable mistake of overcomplicating their trading method. They put multitudes of technical indicators all over their charts and make them look like a Jackson Pollock painting. In the end, this becomes counter-productive as the indicators give them conflicting signals and they begin to over-think the market. Beginner traders often think that if they think deeply enough, and put enough effort in, then they must be successful and profitable. These are often people who have been highly successful in other fields and have very high IQs, and they cannot understand it when they fail in the forex markets.

 

So what should you be doing? Simplify your charts and choose a method that you can explain to a child (and one with an average IQ at that!). It really should be that simple. My method revolves around trading price action signals (namely pin bars, engulfing patterns, & inside bars) in the direction of a trend at significant areas of support/resistance. That is it. There is not much more to it than that – apart from applying some money management and risk-reward scenarios.

 

If you are tired of jumping from one technical indicator to the next, and constantly change the parameters of each one in the hope of finding the holy grail of trading, then I will do you a favor and tell you something. There is no holy grail of trading. Try stripping your charts down to the basic information and perhaps just use one or two moving averages to show you the basic trend. Then mark in your levels of support and resistance and wait for some price action signals to occur around those important levels. It works for me, and there is no reason why it shouldn’t work for you too!

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