A Minimal Approach to Forex Trading

We live in a consumer society where we tend to judge our success by our possessions. We always want that new car, the fancy home, and all the latest gadgets. However, all too often these  possessions become a burden, creating clutter that stops us from focusing on what is important.  There is a lot to be said for a minimalist lifestyle, where we spend time doing what is important –  whether that is spending time with family and friends, enjoying travel or pursuing activities that  bring us real satisfaction. However, to experience true success in this way, we need to strip away  the distractions of consumerism, freeing up time for what is really valuable.

This minimal approach applies as much in forex trading as it does in our broader lives. Too  many forex traders become addicted to the trappings of forex trading, rather than investing their  time in what really matters. Perhaps the best example of this is the dozens of indicators that  traders overlay onto their charts, in the hope that these will somehow bring trading success. Each  indicator is like a prized possession – something that the trader thinks is highly valuable, usually  without any good justification.

In fact, overloading market data with vast amounts of technical analysis is   counterproductive. It creates an enormous amount of clutter, distracting from the important things that are actually  happening in the market. This clutter just creates confusion and frustration, leading to emotional  decisions that create trading losses. Rather than providing targeted insights, clutter creates a paralyzing overload – in other words, it has the opposite effect to what the trader intended. Instead of taking this complex approach, both beginners and experienced traders need to have a  simple and manageable trading strategy that they can stick to. Whether this is trading horizontal  levels, price action or some other basic, proven strategy, the important thing is that they execute  the strategy consistently and accurately. The majority of big trading losses come because a trader  made a mistake, not because the strategy was wrong. By keeping the trading strategy simple, the  trader reduces the chance that they will make mistakes or become emotional.

This same drive for simplification applies to all of the paraphernalia associated with forex trading. While we like to think of successful forex traders sitting in well-equipped offices surrounded by multiple screens tracking the movements of dozens of markets, the truth is that much of this is just a distraction from disciplined forex trading. All a trader needs to be  successful is a laptop and a reliable Internet connection – anything else is superfluous. By taking  this minimal approach and focusing on a few currency pairs, traders can de-clutter their trading life, eliminating the unimportant – and focusing on the key things that will really help them to succeed.