“The timing earlier was an opportunity, but I missed it ……”
When you trade Forex, do you always look at your notes or rules table with your trading methods? Maybe that is one of the reasons why your trades don’t work.
In this article, we will discuss the disadvantages of having a complicated trading method and the advantages of simplifying your trading method in FX day trading (especially discretionary trading).
- Let me explain the forex trading method by comparing it to something else
- Invitation to “The Game of Crossing the Highway”
- What happened to the challenger who was given the first clue?
- Challengers on the right and left on the road
- And you’ve been given the second tip
- Anyway, you tried to act simply as the hints say
- You should gradually refine your senses
- Repeat this to get the feeling that you can really cross
- And I’ve learned to make unwavering decisions
- Forex lessons from this story
- What is a simple forex trading technique?
- Why keep FX trading methods simple – Summary
Let me explain the forex trading method by comparing it to something else
Simply put, a “trading method” in Forex is a tool for successfully entering and closing trades as the exchange rate continues to move up and down.
Many people compare Forex to “surfing,” and I think this is a good analogy that captures the characteristics of Forex well.
However, not many people have actually surfed, so I would like to compare day trading of FX with something else.
Invitation to “The Game of Crossing the Highway”
Suppose there is a road here where cars are whizzing by at great speeds, like the Tomei Expressway or the German Autobahn.
You get a large sum of money for crossing the road and making it across.
Simple, isn’t it?
But of course, if you get hit by a car on the way across, you will be seriously injured (a situation that sounds like something out of “Kaiji”).
At this point, you can only be told one of the two clues.
Now, which clue would you choose?
Which clue would you choose?
- A “massive manual” with a high probability of getting across if you follow these instructions (or so I was told)
- The “short list” with a simple list of points to pay attention to
What happened to the challenger who was given the first clue?
One challenger was told that if he followed these instructions, he would have a high probability of making it across the highway, and he chose the number one clue.
The challenger immediately began reading the thick manual.
His mind is occupied with the large prize money he is about to receive.
The manual contains a lot of information…
The white lines on the road are called “induration lines. The meaning of the word is …….”
When you see a red (not orange or pink) car entering the “Kemperon Zone” only 3 dongs, shift your weight to your right foot, but if the speed of the car is higher than 110 km/h, check the distance further and go to …….
It seems that this manual analyzes the situation in great detail and rules out actions based on that analysis.
There is a lot of jargon, so it must be difficult for challengers to understand it.
Challengers on the right and left on the road
He seems to be trying to cross the road at once.
In his right hand, he is holding the thick manual I mentioned earlier. Is he trying to cross the road while reading the manual?
Yes, that’s exactly what he is doing!
He says, “This is the Kemperon Zone, so when that car comes three dodongs before ……, is that car red? No, orange? …… oops, that’s close!”
“If that line of three cars slows down, is it a ‘head push cross’? How’s that! If so, I’d have to take a step and, uh, twist my body to the left. …… Whoa!”
─ ─ It’s so dangerous, I can’t even look at it …….
And it looks like he finally retired, but I’m just glad his life was saved.
And you’ve been given the second tip
You watched the situation and decided to get tip #2. It was a “short list” with simple points to keep in mind.
It reads as follows…
- Stand at the very edge of the white line and let your eyes adjust to the speed of the passing cars. Look at least 300 cars.
- When you think you can cross, take “only three steps” and immediately turn back to the white line. Repeat this process to get the feeling that you can cross.
- Don’t think too hard. Keep it simple.
That’s all there is to it.
Anyway, you tried to act simply as the hints say
You are standing at the very edge of the white line on a road where cars are whizzing by.
A car passes in front of you at a high speed.
But as long as you stand in front of the white line, you know that you will not be hit by a car.
You stood there and decided to keep it simple as per the hint and tried to get used to the speed of the passing cars by following them with your eyes anyway.
You watched with trepidation at first, but as long as you stayed inside the white line, you would not be hit, and eventually you could clearly see the person sitting in the driver’s seat.
After watching hundreds of cars, you decided to take the next step.
You should gradually refine your senses
The clue said.
Assuming that you will immediately go back inside the white line, when you think you can cross at this point, actually take only three steps forward.
Now that you have a sense of the speed of the incoming car, you begin to get some idea of whether or not you can make it across the highway.
However, when you actually enter the roadway and face the approaching car, you get a completely different sensation – an intense feeling of fear.
No, I can’t do this. ……
You sigh heavily as you return to the inside of the white line.
Repeat this to get the feeling that you can really cross
You think back to the clues.
You already know that you have developed a “sense of car speed” and that “taking only three steps into the roadway” is not a problem for you now.
So all you have to do is follow the hints and repeat them, and you will have your own confidence that you can really cross the highway.
You summon up the courage to act simply and without thinking too hard, and again take only three steps from the white line into the roadway.
And I’ve learned to make unwavering decisions
How many times did you repeatedly enter the roadway and then turn around?
Finally, you have come to your own set of criteria.
Now all you have to do is trust your luck, believe in yourself, and go for it.
And finally, you crossed the road and won a large sum of money.
Forex lessons from this story
The world of the market, like the oncoming line of cars in this “road crossing game,” is constantly changing.
Especially in discretionary FX trading, instantaneous decisions are required in response to market conditions.
What should I do in this case?” There is no time to be thinking carefree things like.
Even if you have a trading method in your head, if you cannot make an instantaneous decision based on the situation, you will either get lost and be unable to move, or panic and take a bad action.
Simple trading methods are desirable to make instantaneous decisions
The trading method used for FX day trading should be as simple as possible. This makes it easier to make split-second decisions.
It is important to note that simple does not mean “easy,” but rather “clear criteria for judgment.
In the road-crossing game, “take three steps forward and return immediately” is a clear criterion for judgment. However, that does not mean it is easy.
Using a simple method as a “measure” to hone one’s sense of the market
The simpler you keep your trading technique, the easier it will be to repeat it in the same way.
The easier it is to repeat, the more times you can do it correctly, the more you will become accustomed to using that trading method, and the more experience you will gain in the market.
As a result, you will develop your own “way of looking at the charts” based on that trading method.
As a result, you will be able to make quicker decisions, and you will have less hesitation and hesitation in your decisions. Furthermore, you will be able to judge, based on your own senses, which price moves you should stop and which entries have a high probability of success.
This is not trading by feel.
It is “judgment backed by experience,” or intuition, that you have acquired while continuing to follow a simple trading method.
In other words, he has acquired this ability to judge the market as a result of first learning a simple trading method as a “standard for judging the market” and then using it as a “yardstick” to measure market price movements in his own way.
Forex traders who have been winning consistently have this kind of judgment, to a greater or lesser extent.
What is a simple forex trading technique?
We can only say that what kind of trading technique is simple is different for every trader.
However, there are some important points that will help you determine if it is a simple trading method.
Key points of a simple trading method
- The contents of the trading method are all in a volume that can be memorized.
- Once you get used to it, you can make entry and exit decisions instantaneously (within 5 seconds).
A trading rule that requires you to open a manual and look up this and that for each chart analysis and entry is not very simple and is too complicated for day trading in FX.
Being able to remember the entire set of trading rules is a prerequisite for a simple forex trading method.
Even if a trading method can be remembered, if it takes minutes to make an actual trading decision, it is also too complicated to be considered simple.
You will “get hit by a car on the highway” if you use these trading techniques.
Don’t worry if you can’t simplify your trading rules from the start
In reality, though, most trading methods are gradually learned through repeated practice of the trading method in ForexTester and MT4, and eventually you will be able to make instantaneous decisions.
Conversely, if you practice a trading method thoroughly, that trading method can become “your simple trading method.
In other words, whether you create your own trading method or learn from educational materials, it is important to become familiar with the method and be able to make instantaneous decisions.
For this reason, it is still recommended to keep your trading methods small, compact, and simple at first.
The common advice for beginners, “Trade only in trending markets at first,” is a correct approach in this sense.
Why keep FX trading methods simple – Summary
In order to achieve results in forex day trading, you need to be able to make instantaneous decisions.
To do so, it is required to be proficient in trading methods and to develop one’s own sense of market judgment through such experience.
Therefore, by repeatedly using simple trading methods, it is easier to acquire the ability to make instantaneous judgments.
The key points of a simple trading method are that “all the contents should be memorizable” and “entry and settlement decisions should be made instantaneously (within 5 seconds).
And above all, it is important to trade repeatedly, so we recommend that you practice trading not only with real charts and demo trades, but also with ForexTester and other trading software in large volumes.
Forex practice software for trade practice is explained in the following article.
Explanation FX Practice & Verification Software Recommendations (Standard & Free)
These are some of the reasons why FX trading methods should be simple (and why you don’t want the rules to be complicated).
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